India must face the permanent changes since the world economic crisis of 2008 and find new ways of triggering growth, writes Ashok Sekhar Ganguly
One of the principal concerns of India’s growth story is that it is a “jobless growth”. This is not entirely correct. As a matter of record, the growth in employment was 1.0 per cent/1.5 per cent per annum between the years 2004-05 and 2009-11, and then jumped up to 3-3.5 per cent in the subsequent years, when India’s economic growth was actually slowing down. There is apparently a lag phase between economic growth and job creation. Statistics aside, no country can sustain jobless growth. In spite of the importance of growth in jobs, it is economic growth which is, and remains, the top of the mind issue.
The national mood regarding economic growth vacillates between euphoria and pessimism. What tends to be ignored is the fact that much of our growth is driven by internal production and consumption, alongside factors such as foreign trade and the state of the global economy.
During the early years of the new millennium, India’s ambition was to match and surpass China’s record of consistently high economic growth. Gradually, the expectation of consistent high economic growth took roots as a firm belief. To be fair, a few eminent Indian economists did advise caution, in the light of certain global trends. But the Indian financial media and stock markets created their own mood swings, which are not only vague, but mostly subjective.
Economics is the single most powerful influence on the emotions of the common person, disproportionate to reality and history. The recent referendum in Scotland regarding whether or not to remain in union with England, was defeated by a 55 and 45 per cent split in favour of Scotland staying within the United Kingdom. Some of the most powerful arguments were based on the difficult economic consequences that Scotland would have to deal with as an independent nation. It so happened that a majority believed that it was economically viable, among several other factors, to remain in the union. But a strong minority believed in the ‘independent’ Scotland story, and were convinced about its economic viability as well. Thus, in a manner of speaking, the ‘Scottish Issue’ remains uncertain.