We had last month, the all-important “White Paper on the Indian Economy”, tabled in the Parliament. I went through the 60 pages for the decade 2004 to 2014 as compared with the decade 2014 to 2024. The conclusions a lay reader is expected to draw are inevitably that, we used to earlier be in a Royal Mess in terms of inflation, in terms of a puerile banking sector, in terms of uncertainties of Governmental Policies, in terms of management of public finances and in terms of a multitude of scams, but now that the situation stands corrected “through proper economic governance, with right policies, true intentions and appropriate decisions”, we are “now on a resolute path of sustained high growth”.
I think it’s an excellent initiative, only I would be happier if it came ten years back, even at the cost of it looking a “negative narrative..”, an unpleasant fact remains a fact especially if its knowledge to stake-holders should be as important as this, having been pre-announced and tabled on the last day of the last Lok Sabha!
My Take: Rather impressive, is the methodical compilation of selected data and time-periods, of remarks from foreign institution-heads and by erstwhile political executives in support of various postulations.
I admire deeply, the improvements in Highway Constructions, in Railway Electrifications, in Broadband subscribers, in wireless data-tariffs, in number of medical colleges, in capex outlays, in volumes of FDIs and in indirect tax percentages.
My only point here is that, instead of comparing absolute numbers, it’s best to account also for normal growth momentum and the real efficiency improvements for a correct appraisal (as we do in year-end assessments) in HR.
In my view however, the two givens are: first, when you take-over a governance, you take over both assets and liabilities, build more on the assets, and provide for liabilities you were supposed to inquire of and second, voters voting-in a regime are deemed to have known who all were wrong earlier and in their wisdom, mandate replacements.
Seventy-eight years ago, Mr Nehru whilst placing the first draft of the Constitution before the Constituent Assembly had stated, “…For a long time we have been having various plans for a free India in our minds, but now, when we are beginning the actual work, I hope you will be at one with me when I say, that we should present a clear picture of this plan to ourselves, to the people of India and to the world at large.”
A ‘White Paper’ in my view, is meant to be a comprehensive yet simple-to-understand backgrounder, of a given complex situation, to be put up for debate and discussions amongst its readers so as to facilitate convergence on a set of actions. Whereas much of the contents are clear, I’m not that sure on two counts a) who all are intended to be Readers of this Document (the White Paper in this case) and then take their converged call, b) The timescale for the “wider, more informed debate on the paramountcy of national interest and fiscal responsibility in matters of governance over political expediency” (page 2 of the paper).
On the targeted audience, I fear if it’s meant for Overseas Investors, will they be happy to read 29 pages of misgovernance and scams of a past Regime (seemingly gone for good), in their investment-destination? Wouldn’t they be looking for enduring values and safety of their capital rather? (In our Republic, the Government is a Permanent Institution, it’s only the Political Captaincy that changed!).
On the other hand, if it’s meant for International Economists, will they not want the Real GDP numbers (Series Corrected), wouldn’t they look for quantative impacts of major external shocks during the earlier regime like, the Global Economic Crisis of 2008 or the Taper Tantrum of 2013? or Internal Shocks of say, the Retrospective Taxation, Delays in Policy, Delays in Approvals and Delays in Implementations? Or for the current regime, will they also not like to know quantified impacts of External Shocks of say, the Pandemic of 2020 or the two Middle East wars or the Internal Shocks (of the success, if yes) of the Demonetisation exercise, of the GST or of the NBFC Crisis on the vast Unorganised Sector, uniquely applicable to our economy? Would they not like to know our total Debts and movements thereof, compared with those of the earlier regime, (the paper mentions only G-Secs)? The Rupee rates today and those ten years back? Exports for example, and how we improved over the ten years? We had a good story there till 2022 both absolute and as percentage of GDP? Or say the Gross Domestic Private Fixed Capital Formation over the years?
And finally on Distribution of Wealth reducing inequality with say Gini’s Index? Lastly, if it’s meant for the Voter (the Aam Janata) won’t he look at “Mehengai” more than the published data for the suave CPIndices over years. Eg, What was the price of a Kilo of Potatoes ten years back and where does it stand today, Rice, Onions, Toor Dal, Cylinders of Gas, Litres of Petrol for his scooty, with a percentage, compared to his wage increase percentage data? I found the inflation table (Page 4), but couldn’t find a similar table for the second ten years. Also the headline inflation 2013 in page 4 is 9.4%, in page 51 it’s 8.2% and in page 27 it’s 9.9%. Second, the Aam Janata would look for job data on say Public Sector Recruitments, previous regime vs current regime could be interesting to him, missed it! Improvements in time lost in Toll Plazas (page51) is very interesting, more of interest would be the time lost in traffic jams!
And before I part, all said, the document is a good recap paper with selected numbers, I hope it serves the purposes it was tabled for and would be eagerly looking forward for the promised “informed Debate” if it’s oncoming soon!
(Binayak Datta is a finance professional)
