25 years of 1991: Is India now just a proud outpost of global finance?

Aseem Shrivastava, a Delhi based economist who earlier wrote a critical review of India growth story, writes on the 25 years of 1991. This is an alternative view (most would call it leftist) which goes against the usually accepted positive spin of the 1991 agenda.

The crux of the argument is despite stellar growth records, jobs have barely grown:

Indian economy and society are facing a tumultuous start to the 21st century. Statistics may show record-breaking growth rates since 1991. Yet, the truth is that formal employment, especially in the corporate sector, has been stagnant, leading to mounting demands for caste-based reservation for government jobs. India is now, effectively, an outpost of global finance. We have preyed on our own culture and ecology, while the economy we chose to import hides our torn social fabric. Beneath the glitter that our politicians wish to plug is the ugly truth: cultural colonisation is at a historic peak, while we march confidently towards ecocide. 

He calls it American rule of India:

Amerindia,” or “A-Meri-India,” is the name I have given to the country we now live in, given that our children and grandchildren are even more subject to American rule (via global corporate-controlled markets and cultural invasion) than our foreparents ever were subject to during British rule. Ironically, during the decades since independence, psychological colonisation has only intensified (especially during 1985–91), instead of getting attenuated, with time.

Some data from the Government of India’s Economic Survey will illustrate the point about frustrated aspirations with stark clarity. The taxpaying formal (organised) sector, home to the most coveted jobs in the economy, accounts for well under 7% of all jobs; a fact of enduring obstinacy remarkable in itself. Over 93% of jobs are in “informal” occupations like construction, domestic work, street-hawking, and farming. Despite record-breaking growth rates since 1991, especially since 2003, formal employment in India’s organised sector has been resiliently stagnant, rising imperceptibly from 26.7 million in 1991 to just under 30 million after almost a quarter century of growth.

If we account for the fact that government and public sector jobs have declined (due to mechanisation and divestment) from 19 million to just under 18 million, it turns out that the private corporate sector has generated a net increase of formal employment for about 4 million workers. This has happened over a period during which the total workforce has increased by over 200 million! Even if we charitably assume that chain-multiplier effects generated by growth in the organised sector have implications for employment in the unorganised sector, and make a liberal assumption that 10 jobs in the unorganised economy result for every job generated in the organised mainstream economy, the sum total of the contribution made by the private corporate sector to the generation of jobs across the country over a period of 25 years is 44 million; well under a quarter of the asking rate (Ministry of Finance 2016).1

He says India has just become a proud post of global finance. One could argue over job creation due to 1991. But this bit about India becoming a post of global finance is undeniable. It is just so much in your face. The rule of finocracy has become supreme in India just like seen on other western countries.

Never was the country ruled more by non-resident Indians (NRIs) and resident non-Indians (RNIs) than it is today. For, make no mistake, Modi’s rapidly digitising India is but an upgraded version of the dream of one of his predecessors; a comparison with whom, given his political rhetoric, would surely embarrass him. Let us remind ourselves that we now live in Rajiv Gandhi’s utopia. Did he not, after his electoral victory by a record margin in 1985, deploy the slogan that he would be “taking India into the 21st century” on the wings of information technology? He would be surely delighted to learn today that information technology now rules the fantasy-filled Indian imagination, as it does the imagination of few other cultures or polities.

This is an era of nested eras. Long periods of history that began decades, sometimes centuries, ago are converging into a climax in these turbulent decades of the 21st century. In this “longue durée” perspective, the following dates are critical: 1492 (Columbian voyage to “India”), 1600 (founding of the East India Company), 1757 (the decisive Battle of Plassey and the beginning of Company rule in Bengal), 1857 (the inauguration of British Crown rule in India), 1947 (formal Indian independence), 1985–91 (the birth of A-Meri-India/Amerindia, following Rajiv Gandhi’s tech-push and the International Monetary Fund-led reforms beginning June 1991).

India is now a proud outpost of global finance, preying faster every day on its own culture and ecology, even as the imported economy (true to former British Prime Minister Margaret Thatcher’s dismissal of the very notion of society) has all but eclipsed human society itself, apart from failing to redeem the jobs promise.

One can only hope and pray that the cultural confidence of our civilisation will revive, as Tagore had hoped, soon enough to not only protect India from the worst socio-ecological damages of breakneck globalisation, but also play the role of the world’s ecological pioneer, instead of the “superpower” it has somehow come to believe it is destined to become one day (swallowing perhaps a canard started by Wall Street). India has now become an embarrassing case of voluntary colonialism. It is for India to bring this to a final end and recover the authentic currents of its ancient civilisation.

There are no solutions though on how to come out of this mess.

No matter how much people behind 1991 call it a home grown process, the perception of it being imposed from outside shall remain. There is more and more evidence of how globalisation has done much more for haves compared to have nots.  Brexit is a strong signal where people in one of the most open and rich economies have voted against the advice of economists.

One bit of confusion is how globalization is seen as this fair process where every country opens its markets for competition and comparative advantage forces to work put. But this is hardly the case. It has been a case of selective globalisation where financial globalisation typically has ruled the roost. The other markets of agriculture and industry remain highly protected ironically in most developed countries. Globalisation is hardly of the liberal variety as is usually presumed and preached. Politics has always played a central role and will continue to do so.

Coming back to India, we waste too much time hearing the post holders of global finance (growth, inflation and deficits) and not much focus on its regional and local issues (air, water, health, unemployment etc). The ground reality is very very different from the all is well reported by the finocracy. The big problem is we have gone too far in chasing global finance ambitions and stepping back is not going to be easy at all.



One Response to “25 years of 1991: Is India now just a proud outpost of global finance?”

  1. Linkfest - Kairos Capital Says:

    […] Is India just an outpost of global finance? (Mostly Economics) […]

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