Event ReportsPublished on Dec 20, 2019
The Lost Decade - India's Growth Story

A panel discussion took place at the Observer Research Foundation to discuss on journalist and author Puja Mehra’s book titled India’s Growth Story: How India’s Growth devolved into Growth without a story. The discussion was joined by Mihir Swarup Sharma, Senior fellow and Head, Economic Growth and Programme as the Chair, Mr.Swaminathan S. Ankleseria Aiyar, Reserach Fellow, Cato Institute and Columnist and Dr. Pronab Sen, Country director for the India Programme of the International Growth Centre (IGC). The panel discussion couldn’t have come at a better time when slower economic growth is hanging as the Sword of Damocles over the head of Indian leadership fraternity and every step taken to solve it has been going in vain.

The group discussion was opened by Mihir Swarup Sharma with a short introduction of the participating panelists and the floor was then given to Ms. Puja Mehra to open the discussion. Ms. Mehra opened her speech on the negative impacts that political influence has on the formulation of economic policies except when there is a situation of grave crisis. She mentioned about the economic crisis of 1991, when some good decisions were being taken, but after the crisis was left behind the space that the politicians created for the experts ceased to exist. The same story happened in 2008 crisis when the experts were given the space to work with politicians, only to be taken away later, when the monkey was off the back. Moreover she also talks about the UPA coalition which was in power and the way economic decisions were taken during that period. She talks about how Pranab Mukherjee took charge of the Finance Ministry after Manmohan Singh retired to bed due to health issues and the former remains in charge of it for a long time, it was during this time as per her statement that a lot of things go haywire and also the seeds of the NPA crisis were sown and decisions taken unilaterally without the cabinets approval.

After the floor was handed over to Mr.Swaminathan, his opening of the speech regarding the coyness of our leadership to accept the period of India’s economic growth in the early 2000s as nothing more than a fluke was eye-opening. He brought to the fore on the reasons India had rapid economic growth in the early 2000, by stating the rise of three major industries such as pharmaceuticals, automobile and software. He said that the period was marked by booming economy worldwide and therefore this favoured India, we didn’t have any innovative policy of our own. He also put emphasis on the political mismanagement after the Congress came to power with Sonia Gandhi’s leadership. She is the one who wanted to wipe out the legacy of Narasimha Rao and secure the legacy of Indira Gandhi and Rajiv Gandhi, and to make money for their political armies who had to be paid to keep the party cadres functioning. The Congress party therefore became notoriously corrupt and less productive.

 Dr. Pronab Sen opened his lecture regarding his views on the book. He said that it was a riveting book and he enjoyed every bit of it. However he then came to a critical analysis, on the part that the book misses out. He states that the book is a focus on the Political and the Capitalist venality and misses out the bigger story on rural India, which was a different story altogether. The distress and the problems that the rural India was facing is also important to be focussed. He said that the booming growth we had between 2004 and 2008 is too much urban centric and we don’t discuss how rural area contributed to it. He focussed on the favourable terms of trade that the country had in the period which added to another three percent growth in the farmers income, along with the six percent rise in the production that they were having. The agricultural economy as per his analysis was thriving which added substantially to the rise of economic growth. The crisis however made the situation worse in the agricultural economy and the production was low. The rural economic story should be brought into focus to get a clearer view of the national economy as per him. Moreover apart from all the economic issues he also talks about the lack of vision and cooperation that the current political situation in India faces and the ways the country has been paying a price for it.

The discussion also comes on political issues and the decisions which were taken within the political circles of the UPA government. It brings out the role of Sonia Gandhi in the government where Puja Mehra comments that Sonia was the actual pusher of economic policies many a times. To substantiate her argument she talks about the Vodafone retrospective tax incident brought up by Pranab Mukherjee that Sonia Gandhi, Manmohan Singh and P.Chidambaram opposed but at last Pranab Mukherjee’s word prevailed for he thought it to be good for the country. Moreover discussions also took place regarding Narasimha Rao’s role in 1991 where Mihir Swarup brought into focus on how many a times Rao submitted himself to the legacy of the Gandhis and also gave the dynasty credit for his reforms and initiatives. Ms. Puja Mehra also put some light on the crucial role that Pranab Mukherjee was playing in the government and also about how he imposed on Sonia Gandhi his name for president instead of Hamid Ansari. The role of Pranab Mukherjee in the UPA needs to be scruitinized.

The conference was very much exhilarating, and saw rich arguments and speeches from all panellists. It was enlightening in the fact that it gave every participant knowledge on how politics and economics runs hand in hand within the halls of power in Delhi, and how they impact one another. It has given everyone an exposure on the ways the economic policy formulations have been done over the years, and the changes required for a robust and coherent economic structure.

This report was prepared by Tanveer Amin, Research Intern at the Observer Research Foundation, New Delhi.

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