Sanjeev Ahluwalia | What lies ahead: India to grow, inequality will rise

New beginnings are better in theory than in practice, at least for the average, Risk-averse individual. First, there is the uncertainty associated with change and the potential risk of disaster. Far better to extend a humdrum today rather than reach for the stars and suffer a potential implosion on the way. Second, only time can make change comfortable — like with a new pair of leather shoes.

Of course, technology can make it painless by aligning it perfectly with individual expectations of comfort -- like moulded running shoes 3D printed at your doorstep to fit your errant toe, memory pillows and mattresses, ordered-in food, or gifts, anesthetised, hands-off killings by robots or a variety of other entertainment or curated travel, available for money or cryptocurrency with a few clicks.

But before you surrender to the click and live syndrome, consider that if living becomes easier, it also becomes lonelier since efficient, at-your-command robots, and artificial intelligence applications replace loquacious, meddling, humans of variable quality. Also, how to kill the surplus time from easier living?
Much like Don Quixote, having a quest helps to justify the greenhouse gas they emit. Leaving a legacy is one such — a balance sheet of the good done, which, as Shakespeare remarked, lives after humans, and the bad, which is best interred with their carcass.

The end of a calendar year and the beginning of a new one is particularly difficult, as we review the balance sheet of deeds and the state of our quest. By the law of averages, most will find themselves wanting. But even those who excelled in fulfilling their quest are only marginally better off. They must find a new quest creating a never ending, upward inclined, escalator of deeds, each one bigger, better, higher than the last.

Others, more sanguine in their achievement deficit, view the high adrenaline life of the front-runners with horror. For them, time is valued by the quality of the process and the uniqueness of the outcomes, rather than by tick-the-box achievements — think creative types, philosophers and those replete with inherited wealth and prestige — a very restricted list of people. For the rest of us, New Year is usually spent in silent rebuke for the things not done.

Nevertheless, the show must go on, so a cheery Merry Christmas and Happy New Year — trips off the tongue easily at this time of the year. Somehow the alternative, woke greeting of “Happy Holidays” is too anodyne, much like not saying anything at all beyond including all and excluding none — a painfully correct but dull, and unremarkable outcome like resolutions of the United Nations. In India, every region celebrates the New Year at a different time. Such diversity is to be revered. But one does miss a feeling of national bonding, around a single, major cultural event, like smaller, less heterogenous countries enjoy.

Possibly, it was the need to impart a common national purpose, at no additional cost, that persuaded the newly minted and thrifty, administration of Prime Minister Narendra Modi in 2014, to celebrate Christmas Day — a near universal holiday since the days of the Raj, even though less than three per cent of Indians (2011 census) are Christians, as Good Governance Day.

It helped that this was also the birth date of India’s much loved and admired Prime Minister, the late Atal Behari Vajpayee, who was associated with great strides in governance and reform. There is a deeper association between Christmas Day and Good Governance. Nine of the top ten best governed countries globally, over 1996-2021, are predominantly Christian — a fact which could point to the beneficial links between governance and Christianity, were it not for the fact that, 31 of the bottom 50 countries are also Christian — a statistical scatter, which somewhat detracts from reading too much into the religious underpinnings of good governance. More recently, the global governance metrics designed by the World Bank have been criticised by the government as being subjective and biased in favour of developed economies.

India’s rank is 66, China’s 43 out of 191 countries. Oddly, New Year’s Day (NYD) is not a national holiday in India, even though we, like the rest of the world, suffer through it from the excesses of the NY Eve preceding it. Domestic value addition must surely nosedive globally on NYD. Greater attention to the virtues of yoga, which is adept at regulating and subsuming bodily excesses, if practiced daily, is recommended for a happy start to every day.

What lies beyond the unturned page? One thing is certain. India will continue to enjoy the benefits, and suffer the downsides, of political stability. Success, sadly, breeds hubris over time, so this cannot be a long-term fix. Unlike the uncertain global economic outlook, the “New Hindu” growth rate of 6.5 per cent plus will shine like a lodestar. But it is unlikely that it will diminish inequality.

Two reasons explain why. First, the government is overextended — a fiscal deficit of 5.9 per cent of GDP, well above the norm of four per cent, constrains the fiscal space to reimagine basic income support as inequality busting programmes. Good jobs are growing, but slower than aspirants. Second, freebies — poorly targeted subsidies — are proliferating. The Production-Linked Incentive scheme is extended now to privately managed computational capability centres — basic infrastructure for startups to develop large language models and Artificial Intelligence applications like ChatGPT.

The idea of “compute as a service” is just-in-time. But why fiscal support is necessary for what should be a highly profitable private venture remains unclear, except that freebies” are the new interface between the government and industry. This is antithetical to the fierce independence of start-ups which birthed the commercial model of “We Work” providing for hire, shared, super-smart, workplaces. Tech stocks are booming globally. Given India’s rosy growth trajectory, close alignment with Western economies, and the focus on tech, space and defence manufacturing, foreign private capital should be beating down the doors to get in. Legacy industry segments do need government handholding. But not start-ups, aspiring to be amongst the targeted 10,000 Indian unicorns.

It is a good time to be Indian, especially in cities, and in the formal industry space. Rapid growth in both will keep pay and profits high, feeding into higher GDP. Others, on the downward sloping K growth, will await trickle-down benefits. Meanwhile, jostling for more freebies is a good game plan, as you turn the page.