Reboot or rewind to 1963

There is no magic wand

It is distressing to note that India, which gave mathematics the noble concept of zero, should have missed the chance to offer history a perfect numerical symmetry. If a dollar was worth one rupee in 1947, then 66 years later poetic justice suggests it should be worth 66 rupees instead of a tawdry variable between 61 or 62. A rupee a year is a lyrical measure of decline. A few rupees more and the Indian economy could have become such a sing-along nursery rhyme.

Satire is the thin wedge that separates fear from panic. Indian businessmen are not yet panic-stricken, but they are edging towards the zone of fear. As haemorrhaging international confidence in India weakens fund inflows, they know we cannot easily defend a rupee under siege. The statistics are chilling. Debt in the current fiscal is running at $172 billion. The Reserve Bank has foreign exchange for just seven months’ imports, which would have been manageable if the bleed was not moving from drip to gush. There is deep worry that vacuous governance and an unstable political environment will lead us to the door of the IMF in Washington, a large begging bowl in hand. Instead of answers, the UPA government is offering alibis, some of them so lame they seem struck with polio at birth. India has become the worst story in the BRIC club.

A robust economy, which is what India had become, does not wither because it has been suddenly hit by lightning; it enters a coma, limb by limb. This UPA administration believed that it could buy time with illusion, or by passing the blame to external factors or home-grown socialists. Last year, it even tried to scapegoat former finance minister Pranab Mukherjee after he moved upstairs to the President’s palace, and P Chidambaram was given the finance portfolio.

A sudden flurry of stories appeared— foreign correspondents seemed particularly gullible — suggesting that Chidambaram would, with a wizard’s touch, strengthen the rupee, slash the energy bill, reduce the deficit, pump up industrial production and tame inflation. Tell that to the onions in 2013.

Those at the rough end of inflation, the poor, are tired of excuses. They look at a nourishing monsoon and wonder why, as they head to the vegetable market, prices go up when there is drought, and rise further when there is rain. This is their translation of a government’s economic record. In 2005 a still buoyant Dr Manmohan Singh promised the nation from the ramparts of the Red Fort that poverty and ignorance (the term he used was jehalat) would end in 10 years. His plaintive admission, in this year’s Independence speech, that there was still a long way to go, is bitter testament to a failed decade.

The only culprit that the government can find is gold. Gold is the minor luxury that a confident economy purchases for its middle class. The cost of gold imports has become a problem only because the economy has imploded.

Analogy comes easily in conversation. Those with a reasonable memory have begun to worry about a return to 1991, when we sent our national gold reserves to London as collateral for foreign exchange. If we are not careful we might be staring at 1963, when finance minister Morarji Desai imposed gold control to save foreign exchange. Desai, and a much-weakened prime minister, Jawaharlal Nehru, could issue orders and change laws but they could not thwart the Indian’s appetite for gold, even when he was in a much more abstemious mood half a century ago. All that happened in the 1960s was that the consumer turned to smugglers. From this emerged underworld icons like Haji Mastan, Kareem Lala and their heir, Dawood Ibrahim. India has paid a heavy price, including the whiplash of terrorism.

When a nation’s confidence is undermined, adversaries abroad pounce to take advantage, and uncertainty within encourages social tensions. In the 1960s we were tested by both China and Pakistan; today Pakistan ambushes an Indian army patrol, kills five jawans and passes a resolution in its parliament condemning Indian aggression. We will not, thank heaven, return to the sixties. India is much stronger now, and there is only so much harm that an indecisive government can inflict upon a nation’s ability. All governments in a democracy are temporary.

Equally, the optimism that we had begun to take for granted, perhaps out of complacency, has been derailed. The challenge of 2014 is not going to be winning an election, but restoring the economy to health and vigour. A nation is only as strong as its economy. There is no magic wand as we enter our 67th year. There was no wand in 1991 either. We recovered because we needed the shock to come to our senses. It is time for a radical reboot once again.

The writer is a senior Indian journalist.