The visit of a cocky foreigner made me think about what I was doing and how well I was doing it. This column was published in Business Standard of 22 April 2003.
EMBARRASSED BY INDIA'S SUCCESS?
Christopher Woods, chief strategist of CLSA, has for long
been a regular visitor to this country. At least once a year he comes and notes
down what I have to say about the Indian economy. Soon after his last visit in
March, he gave an interview to Business Standard. That itself is
unusual; most foreign financial firms jealously guard their intellectual acquisitions.
They absorb all information and views, which they then sell to clients at huge
prices. So I was surprised to find Woods scattering wisdom free to our readers.
What he said, however, surprised me more. He felt that the Indian reform
process had gathered critical momentum; “[T]his is despite the skepticism of
many of the capital’s ultra-negative intelligentsia, who have inherited from
the British a talent for cultivated cynicism.”
That recalled our recent meeting.
I had conveyed to him my view of the BJP government’s economic policies – at
his request on a busy day, free of cost. Since he has come so often to see me,
I assumed that this sort of interrogation was useful to him in his work. I did
not undergo it to dampen his optimism about the Indian economy; if I had known
he had made up his mind, I would have spared myself the time – and him his irritation.
But his interview made me wonder
if I was too negative on India. Certainly, when I was in the finance ministry,
I felt that the Indian journalists who came to interview me were misanthropes.
Some were habitually distrustful, some malevolent. Most were neither, but by
and large, Indian journalists looked for dirt rather than facts, and for views
rather than analysis. Foreign correspondents varied in their level of
knowledge. But most would come after doing some homework and ask very specific
questions. One or two were so good that they made me feel I was walking on
eggs; I looked forward to their visits. There were some great Indian
journalists too – Swaminathan Aiyar was the best. Admittedly, it was my job to
put a positive spin, and healthy skepticism towards what I said would not have
been out of place. But we in the ministry had a consistent picture of the
economy, and even a critic would have found it valuable to understand our
reasoning. The best milked me of facts and analysis and then wrote what they
liked; the worst sought a headline, right or wrong.
I wondered if, after nine years
of journalism, I too had become negative and cynical. I have a less clear
picture of the government’s economic strategies today than when I was in the
government, because I do not have the resources to construct one. The basic way
a journalist would get the picture is by reading statements, speeches and
reports. I read the Economic Survey and get no sense of strategy. I read the
Commerce Ministry’s export strategy, and found it focused on commodities and
embedded in the past. In his many speeches, Yashwant Sinha almost always said
the right things, but I found no connexion between what he said and did.
Jaswant Singh talks too little. I know only one major speech by him, to the
Indian Banks’ Association in Bombay; he said basically, I want you to lend to
such and such of my constituents.
I have from time to time had
friends in the government, but have not necessarily been better informed
because of them. They were eager to defend, and reluctant to explain. Some were
very good friends before they got strategic posts and after they left them, but
became poor communicators just while they were in those posts. Manmohan Singh
and his principal officers spoke with one voice because they were united in
thought. There was so much articulation of policy on file, in the minister’s
speeches, in documents which he invariably read through, that one could speak
with confidence for the ministry. Today’s officers, however good they might be,
cannot, because the ministers are not capable of understanding and developing
policies – and do not have the confidence in the officers to leave policies to
them.
How then can one function as an
economic journalist? I try to make up for lack of official inputs by reading
newspapers. The great thing about India is that so much leaks out of the
government; if one reads newspapers carefully, one generally gets the picture.
The difficulty is that the picture does not emerge out of day-to-day reading of
newspapers, for they do not give the background and do not connect up stories.
There are no economic magazines with a broad sweep. Economic and Political
Weekly comes closest, but has too few facts and too much opinion (except on
monetary policy). So what I do is to sit down once in three months and read
through the quarter’s newspapers – those that I respect.
That reading gives me an idea of
where the action is and where it is tending. But it still does not give me the
impression that Woods has – that the reforms process has gathered momentum. One
can make a list of the “reforms” being done – sale of a PSU, introduction of
state VAT, freer foreign exchange for exporters, reduction in import duty on
hair oil, etc etc – and derive an impression of a process. But reforms must
have a macro objective; the objective would define what is a reform and what is
not, and whether it is significant or not. I see no overall end-result that
this government wants to reach; instead, I see the enormous damage it has done by,
for instance, borrowing ever more, raising agricultural import duties, and
making government expenditure ever less productive. I just do not see the
momentum of reforms. I see the unrelenting momentum of instinct for survival
and greed.
Some of Woods’s cheer comes from
the performance of the Indian economy; it must not be mixed up with the quality
of economic policy. The Indian economy is surprisingly resilient; it reacts
positively to small stimuli. But as Dharmakirti Joshi showed in his article in Business
Standard last week, every industrial boom after 1996 has been short, modest
and narrowly based. We do not know about the current one yet; but there are
enough historical grounds for skepticism.
My remit is to write for the
Indian reader. I cannot make her happy by telling her that India is doing better
than Burundi or Colombia. In any case, it is not my job to cheer her up, or to
make her buy pharmaceutical or software shares. I am employed because someone
thinks my judgment of economic affairs is good; my job is to give the reader an
honest, serious personal view. So I am afraid that for the moment I do not see
an alternative to cultivated cynicism. But I hope to make my cynicism amusing.
