2012: Where's India headed?
Date: Monday , January 02, 2012
2011 has been defined by historic, dynamic and tumultuous events that will shape the world in the years ahead. From the Arab Spring to Athens, from New York to Moscow, people power is stronger than it has ever been. And now it has reached Moscow which saw protests last week.
Back home, for much of the year, Anna Hazare held the Indian media and people captive as he pushed the Government to create an independent anti-corruption agency - The Lokpal. The Lokpal Bill failed to get Parliament's approval. Hazare has criticized the resulting legislation as too weak, while critics of Hazare argue that the last thing India needs is another massive bureaucracy. No matter the specific outcome of the bill, one thing is certain: Indian politicians can no longer afford to ignore the middle class.
What happened at MMRDA Grounds in Mumbai or Ramlila Maidan in New Delhi or what happened at Jantar Mantar in April, is absolutely not the same as what happened in August at Kranti Maidan back in 1942 when Mahatma Gandhi called on the British to 'Quit India'. Country's battle for sovereign independence is a lot different than a popular demand to bring about certain systemic changes within the established framework of parliamentary democracy.
The question to ask is will the 830 million people living on Rs.20 a day really benefit from the strengthening of a set of policies?
If the economy is any indication, than 2012 will be a much more challenging year than 2011. With an array of local and regional pulls on it, how can we expect India to exercise its influence beyond their borders? Faced with internal and external challenges, there has been a policy paralysis. In this context, foreign policy has been almost entirely secondary, confined to regional issues like Pakistan and Afghanistan, and even in those showing little in the way of leadership.
Indian growth rates are declining, its currency is the worst performer in all of Asia, foreign investment is slowing. Corporate India showed a single digit profit growth in the last five quarters. Rising interest costs and higher prices of raw materials rising inflation are major concern for worsening business standards in India. The real worry is India's inability to raise its share of global FDI. India received less than $20 billion in FDI in the first six months of 2011, compared to more than $60 billion in China.
Last month, Goldman Sachs’ Jim O’Neill noted on the 10th anniversary of his coining the term BRIC (The catchy acronym for Brazil, Russia, India and China used to describe the new powerhouse emerging markets), that the greatest disappointment among those emerging stars has been India. So what's likely to happen in 2012? Given the coalition nature of our government headed by Manmohan Singh, there is nothing much to hope in 2012. Our government is like a patient on life support grabbing for the oxygen mask, simply trying to survive. Perhaps there will be more massive and effective street protests.