Sunday, November 11, 2012

Growing figures

So it is being said that India’s economic growth is “likely to drop to 5.7%”. The report pointed out that the current growth is lower than the 6.5% figure from last year, and 6.7% in the “crisis-hit 2008-09”.

For the lay citizen, these percentage points and ominous hints of a ‘slowdown’ or a crisis are meaningless. We experience a crisis economy in three terms: Is it hard to find jobs? Is food scarce? Are essential services (like public transport and healthcare) accessible?

Politicians and economists like to bandy about figures, but don’t answer these basic questions. It is like being assured that a child is growing just because her weight is increasing. It could also mean the child has a hormonal problem. If 5 or 6 or 9 per cent growth is not leading to employment and improved public services, it means that our national child is sick.

I recently read a magazine profile of the current chief minister of Gujarat, where there is a fair bit of growth. There are MoUs being signed; industries are being set up. Then why are more young people registering themselves at unemployment exchanges? Why are so few jobs created in the private sector? Why are children malnourished? Narendra Modi might prefer not to answer these questions, but I don’t understand why economists are not explaining.

We’re only a developing economy. Our average could fall to 4 or 3 per cent and we’d still be ‘growing’ faster than the developed ones. The Eurozone economy had zero growth in the first three months of 2012. This was true of France as well. But are children starving in France? I don’t think so. And France has universal healthcare for all her citizens.

What is a ‘healthy’ growth number anyway? It is said that Germany alone is staving off a bad recession. But the German central bank forecast a growth of just 1%. Studies also suggest that 8 out of 10 Germans want a new economic order. ‘Growth’ as a numerical concept is no longer acceptable. More Germans believe that more income is not necessarily leading to a better quality of life.

Nations like Greece are in trouble. But Greeks are looking for ways to deal with their crisis. What do we do when there is no money? Well, we look at alternatives. Say, I need a taxi ride and I can’t pay for it. The taxi owner gives me the ride ‘free’. But his children need Math tuitions. I can offer that service, so I do. An informal barter economy has sprung up in pockets of ‘austerity-wracked’ Greece. People manage with some community trust. We must work for our sanity, even if the basic food, clothing, shelter requirement is met.

But it was interesting to see how the Greece situation was reported. One headline said: ‘It has come to this’. Another said: ‘Cashless currency takes off’. Yet another article said: ‘Misery forces workers from cities’, which sounded so strange to me.

In India, we rarely hear of hardship forcing workers to quit cities. If things are bad in big cities, they are usually a lot worse in villages. Still, most Indians live in villages. They move because they can’t find work, or can’t access basic services. Distress migration has been a trend for decades now. And our economists didn’t seem to think there might be an economic crisis underway.

Another article I read quoted the writer Edward Abbey who said that growth for the sake of growth is the ideology of the cancer cell. We would do well to examine the growing child of our economy for symptoms.

First published here.


Anupam Karn said...

You somewhere missed the Quality of life, diversification, fear, deforestation counter effect, and Infra aspects having close correlation with the story...

Anshul Kumar Pandey said...

Economics these days has been reduced to psuedo science these days by the so called economists. These fellas can't even tell us the exact percentage of people who are poor in India. The estimates range from 27% to 77%. A 'Science' where the range of disagreement is as large as 50% is at best psuedo-science.

The mentality of growth as the harbinger of development has been the bane of this Manmohan Singh government. What these economists do not realize is that this is superficial growth which is being pushed by a few multinationals who take up a disproportionate amount of space in our total breadth of competitive market. Growth in Manufacturing and Agriculture is stagnant, whereas the growth in Services is hyped. This lopsided ideology of viewing growth as the springbroad to superpower status is what is pushing our economy down to the bins.

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