The Mute Observer : Gamma

Warning: This is a 1000 word post, but every word has a significant meaning.Read at your own risk.

Everyone talked about the end of equality, the end of the govt’s thinking of the ‘aam aadmi’ and the notion of ‘India for the poor and weak’. They said that a group of foreign multinationals will make us all their slaves. They will ingurgitate all the local businesses and no one will be there to care for the meek and the destitute.

The writing was pretty clear on the wall after the balance of payments crisis of 1991. Being a bania shopkeeper, Economic Times has been my only passion apart from money. I looked for every opportunity to earn money but all I came across in the early 90s was the economic crisis. The socialist policies that India had followed brought it to such a state it had to pledge 20 tons of gold to Union Bank of Switzerland and 47 tons to Bank of England as part of a bailout deal with the International Monetary Fund (IMF). In addition, IMF required India to undertake a series of structural economic reforms.

For those who credit the reforms to the erstwhile prime minister and finance minister, let me tell you, it was the mounting international pressure and the Catch 22 situation India was in, that it had to succumb to the international pressure, although it didn’t implement many of the reforms IMF insisted.

The international pressure was a blessing in disguise for the Indian economy. The way one thing led to the other and one change made way for the other is a rather interesting story. It would be hard to believe for many that during the period from 1950 to 1980 India grew at snail’s pace of 1.3% while countries like Indonesia and Taiwan registered a growth rate of 9% and even Pakistan managed a 5%growth.

As I stated in the earlier posts, India of 80s was a story of the sorry state of affairs of the License Raj and Inspector Raj. The assassination of Prime Minister Indira Gandhi in 1984, and later of her son Rajiv Gandhi in 1991 crushed international investor confidence on the economy that was eventually pushed to the brink by the early 1990s.

After the IMF’s sanctions, steps had to be taken and there was no time even to fret over options. Dr Manmohan Singh, a respected economist had his chance to get his name embossed in Indian history forever. Though he supported liberalisation, he was too ‘faithful’ to the Gandhi family to go against their socialist patterns. P. V Narasimha Rao was an ideal companion. He was a laid back man with a steely resolve. He is often not given the credit he deserves to make way for economic reforms in India. The ‘Singh-Rao’ Jodi with help from the then Commerce Minister P. Chidambaram worked on two main grounds:
i) Singh and Chidambaram saw through the nuances of each and every reform they surmised.
ii) Rao convinced the parliament to steer tough economic and political legislation through it at a time when he headed a minority government.
Finally, on 24th of July 1991, India broke the shackles of socialism to step into a world full of opportunities. Like others I too was afraid of the future of my kirana shop.

The change was visible from Day 1. The foreign direct investment (FDI) rose from a paltry $ 132 million to $ 5.3 billion in 1995-96. Share markets, inspired by Dhirubhai Ambani’s historic rise and an open market economy, became a trader’s daily work-out. I also purchased some Reliance shares for a miniscule amount which has grown more than the whole of my ancestral property. The SENSEX which stood at 2000 points in 1992 has since moved to 21000 and above, 17000 being today’s value. The no. of times it has increased and in the process increased people’s incomes is anyone’s guess.

Election of AB Vajpayee as Prime Minister of India in 1998 and his agenda was a welcome change. His prescription to speed up economic progress included solution of all outstanding problems with the West (Cold War related) and then opening gates for FDI investment. In three years, the West was developing a bit of a fascination to India’s brainpower, powered by IT and BPO. By 2004, the West would consider investment in India, should the conditions permit. By the end of Vajpayee’s term as Prime Minister, a framework for the foreign investment had been established. The new incoming government of Dr. Manmohan Singh in 2004 is further strengthening the required infrastructure to welcome the FDI.

Contrary to common belief and even mine I have outgrown even my imagination. With the money I made from share market and previously saved money I opened a McDonald’s franchise. Slowly I developed my kirana shop into a supermarket which competes and even does better than the nearby Big Bazaar. I have learnt that competition is the biggest teacher and change is the only constant. There is no reason in being afraid of the change; rather one must take it in his stride. The open market meant more jobs and better opportunities. Now my son is a manager at an IT firm and is stepping into entrepreneurship. Finally our children have options to choose from; this gives me a huge sigh of relief.

With great power comes great responsibility, as it is said but with power and money, lust and greed follow. The exponential growth has also seen increase in the no. of scams exponentially. Starting with the Harshad Mehta scam of 1992 (which at INR 5000 crore seemed insurmountable then), followed by the Fodderscam, Hawala scandal, Telgi stamp paper scam, Commonwealth Games scam and the 2G spectrum case, the list is virtually endless. As Anna Hazare sends shivers to the corridor of power, I am reminded of my extraordinary potential as a common man. Although I don’t agree to his methods, but I realise that the second reform has to be a reform for transparency in an economy that feeds a sixth of the world’s population, and this reform has to rise from empowered citizens like me and you.

Signing Off. (Can’t write more at 65)

Keep Changing, Keep Evolving.

The world is yours to conquer.