Friday, July 16, 2010

What a waste of time

If you are an Indian, by now you would have seen the new symbol designed for the Indian rupee. Given the close attentions of my beloved net nanny, I cannot reproduce it , but if you really wish to see it, you can do so here.

This is a small matter, but is so typical and representative of India. Symbolism and pride is wildly disproportionate to reality. Currencies such as the US dollar, the Euro, the Yen, the Pound Sterling, all have their unique symbols. India aspires to be in that league. But the fact is that you don’t join the league by having a symbol; you join that league by having a currency (and by implication, an economy) that is worthy of being there.

With all due respect to the country, and I am an illogically patriotic Indian, the rupee is a basket case. Because, the underlying economy is far from strong. The rupee is still subject to stringent controls, especially on the capital account, and rightly so. The market is this currency is minuscule. Nobody, other than an Indian, really bothers about the Indian rupee.

While “India Shining” is a nice slogan and is in some parts true, the economy has serious problems that are masked by the heady intoxication of decent growth. The fiscal deficit and the national debt are at appalling levels – if India was not growing, it would be closer to Greece. Fiscal irresponsibility, especially in the states, is something that this blogger has frequently moaned about. I am willing to bet that not one state legislator is capable of even spelling fiscal responsibility in any language of his choice – we survive only because we are thankfully blessed with a more enlightened Central Government. Strange must be a country where a “reduction” of inflation to "only 10%” is seen as good news.

This post is a call to India to consider a large dose of humility. We are, but a bit player, in world economics. May be unpalatable and distasteful, but that’s the bare fact. Rhetoric cannot substitute for reality. Global perception of India’s weight is way above what it really is. We love the role of wrecker in chief of the WTO rounds of talks. We bang the drum at Davos. We want to be included in every global forum and want to make as much noise as possible. Much hot air and little substance.

I know this is an overcritical piece. But deliberately so. India has huge strengths. It should put its head down and do the right things economically. It should shun symbolism and achieve real progress. A dose of understated and outstanding performance would do it well. Deng Xiao Ping, a particular favourite, at least economically, of this blogger said “Keep a cool head and maintain a low profile. Never take the lead, but aim to do something big”. Wise words, India would do well to emulate.

The strategy of the country India sees as its main competitor (but to whom India is no more than a flea !) is exactly the opposite. Massive progress, but little symbolism and a head that’s just beginning to rise above the wall. But then India has one huge advantage that will stand it in great stead in the future. I can write such a piece about India. Try doing that in the land of the competitor. No way. Its not just that the powers that be will come down like a ton of bricks. The average Joe doesn’t even think on those lines.

And therein lies the key to the future success of India. But in the meantime can we stop wasting time with useless symbols – like this one of the currency.