Don’t lower debate to level of prime-time TV shows
Reserve Bank Governor Raghuram Rajan is right, both in terms of what he said about India being andhon mein kana raja (in the land of the blind, the one-eyed man is king) as well as about the need for us to lighten up, to not strip words of their context and ‘not look for insults everywhere’. While it is obviously true that India is the world’s fastest-growing economy and that this is a matter of pride, few including those in the government would doubt that this is more due to the Chinese slowdown than due to any sharp propulsion in India’s growth dynamics. Indeed, had it not been for the revision in the way GDP is calculated—a revision that most analysts still don’t accept as kosher —even this distinction would have eluded us. And even the handful who believe the data is kosher would agree that the sharp turnaround in India’s macros which has made it the darling among EMEs —low-inflation and the twin deficits under control—are mostly driven by both oil and other commodity prices collapsing in the manner they have; lower oil prices not only reduced the oil subsidy and the fiscal and trade deficits, they also enabled the finance minister to hike tax rates and mop up more money. Indeed, the structural weaknesses that plagued India a year ago still remain. Apart from exports that continue to contract for 15 months in a row, investment levels have collapsed and with large corporates debt-strapped, banks in no position to lend either, and 30-40% levels of unutilised capacity in most major industries, investment is not going to return in a hurry.
Part of the problem, of politicians reacting to Rajan’s statements negatively, is of course that of the media and its desire to sensationalise in order to gain eyeballs though, in this case, the Governor was kind enough to say ‘they also offered the surrounding context’. In an era of attention spans no larger than 140 characters—few on Twitter even click on URLs to read the entire story/comment—no one wants to go beyond the headline. But the greater problem is that everyone is prickly, looking for an insult and, having found it, waiting to dish it back in double-quick time. If the debate is not going to be reduced to the slanging match on most prime-time TV shows, we have to be prepared to listen to views different from ours. Ensuring the debate is pithy necessarily implies there will be some rough edges—as Rajan said, replacing ‘an eye for an eye will only make the world go blind’ with ‘revenge reduces collective welfare’ lacks zing and therefore the ability to persuade. While the motormouths in the BJP and the Sangh parivar have already ensured the government is stuck with the tag of being intolerant on social/religious issues, the last thing it wants is for this to be extended to the economic arena as well.