On December 20, 2003, a landmark in the history of modern India was achieved. The nation's forex reserves for the very first time crossed the $ 100 billion mark, to be precise clocked 100.048 billion. The high, coming just after a decade of reforms, remember 1990-91, could well be termed as the coming of age of India's liberalisation program.
Celebrate as we may, the milestone necessitates a stocktaking. For starters, the BSE Sensex has virtually doubled over the last 10 months triggering a dollar inflow into India. Nearly half, or $ 50 billion of these $ 100 billion reserves have flowed in over the last two years with as much as $ 25 billion coming in during 2003.The inflows, coupled with the steady fall of the US dollar, thanks to the Bush administration, have further helped pushed up the value the reserves.
The burgeoning reserves, in turn, pose a Hobson's choice -allow the rupee to appreciate and incur the wrath of Indian exporters or do the traditional building up of reserves which by themselves are expensive to maintain and yield little in government bonds.
The BRIC (Brazil, Russia, India, and China) Report and the Census of India 2001 on the other hand present the human magnitude of the situation. With 54 % of the country's population now below 25 years of age, i.e. over 550 million Indians; and the ratio projected to swell during the next decade; the challenge lies in absorbing this workforce into the economy. Education still remains a stumbling block to unravel this potential; forget the English speaking Indians or the growing services sector for we produce just about 2 million graduates per year; and yet the GDP investments into the same are not worth a mention.
Entrepreneurship, the catalyst to growth and employment, has not really taken off to significantly absorb the next gen; remember services only absorb the educated; and the fallout is to a great extent reflected in the deteriorating law & order situation( specially in the BIMARU region ) or to be politically correct the extortion and ransom industry. The reach of social spending ;no talk of corruption ,I promise; is well gauged with Reuters reporting 189 winter death in northern India alone and that too since Christmas , i.e. approx 20+ deaths per day, and these are only official figures.
Construction, by far, has been the time tested method of leapfrogging the painful period of development, the US and more recently China being sitting examples of the same. With 60% of Indian households still lacking access to Pucca housing and only about 58,000 Kms of National Highway (which carry over 45 %of all road traffic) much scope exists for constructive channelization of this huge workforce even as educational investments, over time, would help meet the challenges and opportunities offered by global backroom operations. The euphoria over the current boom in housing and the impetus generated by the four laning of the national highways needs to stepped up to the next level .The rejuvenation of the brick and mortor economy is as critical for the financial health of the country, if not more, as ICE and should form the bulwark of development transition.
So, the feel good notwithstanding, do good is the requisite of the day. An election year may well provide vent to the unrest, frustration and, believe it or not, employment needs of at least a substantial few of the millions but is at best a self defeating exercise. Shining India needs to see visible agents of change and growth in conjunction with the feel good. Another budget around, the government of the day can only be reminded this -Hunger knows no friend but its Feeder. If not the bureaucrat, the Politician should see through.
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