Watching Indian media makes one believe that India would be one of the best places in this world in another 10-15 years, if it is not already today. Not long ago, similar optimism existed where we often compared ourselves with China and claimed to be ‘superpower’. When Ms. Hillary Clinton stated, in leaked WikiLeaks cables, that India has been the ‘self-appointed frontrunner for the UNSC seat’, Indian media seemed to be shocked. Probably, the rest of the world had some healthy laugh over that development. 

Whatever minority I am in India, surely I was not shocked, and there are many more who think as I do. Whether this group of minority, having me as a member, needs to be bashed by the ‘optimist (and thereby) positive-minded’ majority Indians is another point to ponder. To these minorities and to me, Ms. Clinton did some plain-speaking in those leaked cables; away from the ‘diplomatic sugarcoating’ as usually is expected from such figures. 

She essentially spoke the truth. But a nation with a rising middle-class, running on ‘opium’ of few years of relatively high growth, and worse still, a media addicted to higher levels of same ‘opium‘, myths last longer than the truths. As a nation, we love hallucinating than accepting truth. Truths essentially are facts, as any media person and researcher know that ‘facts are sacrosanct, opinions are free’. Accepting facts as indisputable truth has nothing to do with having positive or negative opinions about India.  

The comparison with China has stopped now, abruptly, under another pretext. China and India are different, that’s what the majority now wants us to believe. Yes they are, as they had always been; but didn’t they know that few years back when such comparisons were everywhere in news headlines? 

The 1st myth is on growth rate, and the 1st question to ask, therefore is how fast have we been growing, over the last few decades, compared to the rest of the world. In a recent editorial in The Times of India, Ruchir Sharma, Head of Emerging Markets at Morgan Stanley Investment Management pointed out that over last few decades, our growth rates have been somewhere between 25-30, in global rank. It even includes the last decade. So the 1st myth to be busted is, we have never been the 2nd fastest growing economy consistently, even for a decade. Yes, for one or two years, we might have been the 2nd fastest growing major economy, and that unfortunately acted as ‘opium’. 

Even when the ‘fastest’ word is loosely used in Indian media on growth rate, and not on absolute basis, it needs a clarification. India growing at 7% adds roughly 6% increase in per-capita income, adjusting for growth in population. It means, an average Indian’s income, on nominal basis, merely increases by roughly $90 in the next year. If the US grows by 1%, it means roughly $500 growth in per-capita income, and if China grows by 8%, it means per-capita income of a Chinese grows by $400 over the last year. That’s for ‘fastest’ Indian growth. 

2nd myth, with Olympics just being over, to be asked, is by what % time, the 100m men’s race can be improved, for the existing world record of Usain Bolt. Even a fraction of a % point there from present 9.58 seconds is a big achievement for any individual, and also for the mankind. Now if you and I start running for a week on a regular basis, we may see 10-20% improvement within weeks (say, from 20 seconds to 16-18 seconds). So the base effect needs to be kept in mind. If Indian media starts comparing our running improvement rate with that of the world record, it would be grossly wrong. It does not put you and I to be considered in the same league of the Olympic racers! 

The 3rd myth, reform in India has done miracle and led to higher growths. The whole world grew by a faster rate during 1990s and 1st decade of the 21st century, due to various reasons: easy liquidity, low inflation (due to China), ICTs and other technologies, globalization, etc. Ruchir Sharma article shows that India has been outgrowing other emerging markets barely by 1.5-2% over last couple of decades, in spite of the tremendous low base we have compared to other EMs, and it has been true during post-reform years also. Competition in any economy is good, so, in case reforms increased competition, it has been good (but has competition increased in allocation of natural resources?). But that does not mean all emerging nations did reform like India did in 1991, during the last two decades. And if all emerging markets did minor or major reforms, India also did that – because it was inevitable. Point essentially is, reform in India didn’t yield any additional significant competitive advantage to Indian economy, it probably has helped us in overcoming the competitive disadvantages we had during pre-reform areas that mostly witnessed ‘Hindu-rate‘ of growth.. 

Another myth is on present economic turmoil in the US and in the the Euro-zone (Indians don’t follow Japan, which also is in same league as the other two!). The opium-addicted media man, in TV or in newspaper, with some economists and unfortunately academicians too, routinely say that when Europe is struggling, hope for the world is India (and China). But what is it that Europe is struggling from? Cumulative deficit of Euro-zone is less than 3%, India’s is more than 5% for the center alone and more than 8% for center + states. Inflation in Euro-zone is less than 2%. Yes, the worry is rate at which some large European governments can borrow money, as that has gone up. But it still remains less than that of India. India has a problem for decades, and when a small part of Europe faces that problem for weeks, to a lesser extent than India both in magnitude and tenure, our chests swell with pride. Surely, India can do better. Even among emerging nations, we are one of the worst, as we are among BRICS – in all socio-economic parameters to Olympic medals. 

Another area of concern in developed economies have been rising unemployment, which has been 8-9% in the US, and even more than 20% in some parts of the euro-area. But before getting into any debate on how India is any better on this area, let us understand what employment means in developed economies. It means what in India we mean by organized employment, which covers around 2.5% of our population, as per 2003-data. Working-age population covers nearly 80% of the US population, and if 8-9% of that remain unemployed, that no way is a comparatively worse picture than our 2.5% figure of organized sector employment. Employment-to-population ratio of OECD countries show it with better clarity, and if India is placed in it, India’s figure would read 2.5% against OECD average of 64.9%. Therefore, before we start discussing problems in the US and Europe and start inflating our achievements, it is better we understand the context little better.

To be one of the best in the world, we need to have one of the best education systems in the world; one of the best healthcares in the world; one of the best physical infrastructures in the world. The youngsters in India, who believe India would be one of the best places in the world in another 10-15 years, should keep in mind that their universities, whatever best that may be in India, isn’t recognized to be one of the best among top 200 in the world. 

The world may be entering a new-normal period, with slow growth and tighter liquidity. Getting intoxicated and intoxicating the future generations about this euphoria with stupid optimism, founded with misinformation, is surely dangerous, more so due to the recent developments in India. The debate isn’t between growths vs. poverty. No one denies we need growth. But growth with less reduction in poverty is less desired than growth with more reduction in poverty, and there essentially should not be a trade-off between the two. Sacrificing natural resources to private sectors for higher GDP growth, expecting higher growth will yield higher tax-revenue which may at best be a fraction of the actual value of the natural resources given free in first place, and that higher tax revenue would help us support the poor, is stupidity as well as criminal. 

Being positive is always needed. Yes, our potential is many times more. But living in myths is dangerous, when the metaphor like situation of ‘shit is hitting the fan’ happens. I think all Indians should re-read these couple of lines of JFK again and again: ‘The great enemy of truth is very often not the lie – deliberate, contrived and dishonest – but the myth – persistent, persuasive, and unrealistic.’ 

The media and the ministers in India may not be deliberately telling the nation lies, but what they are doing, by propagating ‘myths’ continuously are no less fatal for the 1.2 billion citizens of India. The mindset for such misconceived ideas probably come as we routinely compare India of 1940s-1980s with India of 1980s-present time. Yes, when our generation grew up - we didn’t have a phone (I used my 1st phone in IIT Kharagpur in 1988, without knowing which end to be put in the ear and which end to be held near the mouth!), we didn’t have TVs, computer was not heard off, 2-wheelers and four-wheelers were luxuries, and planes were something to be seen when they flew over our small towns.  

But that benchmark essentially is wrong. The reason for the progress has been all global parameters. The right benchmark is the rest of the world for the same period, of their progress during 1980s-now vis-a-vis India’s progress of 1980s-now. Moreover, most parts of the world which had been worse than us in 1940s today are much ahead than us. 

Somehow, Indian media and so-called ‘majoroty voices in Indian media’ do not get this simple point. Or else, I do not understand some basic things.

Prof. Ranjit Goswami works as the Director of School of Management of RK University. Opinion expressed in this article is personal. He invites you to visit his blog, Wondering Man (or take a look at his book, Wondering Man, Money & Go(l)d). You are also invited to join him on Twitter

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