+ Yes, because perception becomes reality
By RAJEEV SRINIVASAN

A couple of decades ago, Ronald Reagan ran a campaign based on the slogan “Morning in America.” In a previous campaign, he (or his handlers) asked the killer question, “Are you better off today than you were four years ago?” Coming at the nadir of the Jimmy Carter presidency, with hostages in Iran, the answer was a resounding “No.” That set the national mood, and Reagan went on to win big.

In India the National Democratic Alliance (NDA) led by the Bharatiya Janata Party is in the happy position today that the average person on the street is indeed feeling better than he or she did five years ago. This is my conjecture: I have not done large-scale surveys. But based on the opinion polls I have seen here and there, there is a mood of optimism in the air. Consumer confidence and business confidence are at near all-time highs, as people expect a better tomorrow.

This gives the NDA that intangible “Big Mo,” momentum, especially coming after their victories in a few heartland states, where they concentrated on the issue of governance, and electricity, roads, and water. It appears that Indian voters are, after all, rational economic beings: when their lives improve, they vote for the incumbent.

It is true that things are not hunky dory everywhere: pockets of extreme misery still exist, although they must have grown fewer in number. The percentage of the population classified as living below the poverty line has fallen in the recent past to roughly 25 percent. On the other hand, the ranks of the middle class have swollen as many have ridden the new waves of IT-enabled services, highway construction, and manufacturing, to get better jobs.

Agriculture has made a comeback this year, although it is true that this is primarily because of a benign monsoon; but there is no denying that this has a tremendous ripple effect on the rest of the economy.

The success stories in services (leading to a backlash and protectionist sentiment) and surprisingly in manufacturing (as Indian majors like Tata Motors and Bharat Forge branch out and become multinationals in their own right) are trickling down to the level of the common man.

You can see this in the very infrastructure: the office complexes and factories, the flyovers and highways and ring roads being built everywhere, the cellular towers popping up. All of these mean jobs even for unskilled people as janitors and security guards and construction help.

And the confidence that there is a better future for their children impels people to invest in their education. This virtuous cycle is the stuff that propels a nation forward. The perception, before you know it, becomes the reality.

Rajeev Srinivasan wrote this commentary from Bangalore, India.
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+ No, the reality is pretty grim
By S. GOPIKRISHNA

What is “cosmetic prosperity”?

After ramming in “reforms” supposedly bettering the lot of Russian people in the 18th century, Empress Catherine of Russia decided to verify their impact by visiting a village. Not wanting to be beheaded for telling the truth, her ministers created a facade by festooning a village and displacing its residents with actors. Ignoring the pangs of hunger, the actors danced and sang to express their gratitude to Catherine for the miracles wrought in their lives.

The “economic miracles” being wrought in India are as surreal as the cosmetic prosperity ushered in by Catherine. While some of India’s urbane urban pockets have benefited through economic reforms, any evidence of a trickle-down effect is invisible to the naked eye. The noise created by the beneficiaries masks any dissent from the non-beneficiaries who continue to remain at the periphery.

Take economic liberaliza-tion’s best-marketed miracle—Andhra Pradesh. Paeans of eloquent prose describe how the once-murky Musi river flows with honey because Hydera-bad has become Cyberabad. Chandrababu Naidu is known everywhere from the World Bank to Microsoft. Talking heads, national and international, have hailed Andhra Pradesh’s transformation into an El Dorado.

The only thing that contradicts the tales of splendor is reality. A few kilometers out of Hyderabad, throughout adjoining Telangana, one hears of little but droughts and depressed economic conditions. Amidst the serenading of high-tech, the spates of suicides by debt-stricken farmers seem to have been forgotten. The numbers of the disenchanted drawn to the Naxalites indicates that two square meals a day is still a dream for many.

Indeed, this stark truth is best illustrated through the net state Domestic Product per person for 2001-02. Always a country cousin in the South, Andhra Pradesh continues to rank the lowest with $370 per person. Unglamorous Kerala, “union thugs” notwithstanding, has a significantly higher $447 per person while inconspicuous Pondicherry is a clear winner at $727 per person.

Neither is this disparity restricted to Andhra Pradesh. While the economy of the Mumbai-Pune region heartily supports opulence enough to compete with New York’s elite (to paraphrase Noam Chomsky), eastern Maharashtra’s Chandrapur and Gadchiroli districts eerily resemble a forlorn and famine-stricken African country. Karnataka’s “Silicon Valley” presents a jarring contrast to far-flung Bidar and Bagalkot, irrevocably married to poverty since anyone can remember.

The “Economic Miracle” is more illusion than reality, of more consequence to worshippers of free markets and globalization than the average Indian. After all, how good can one feel when the “feel-good” factor can’t switch on a light at the end of the tunnel of poverty by providing two square meals a day to millions of Indians?

S.Gopikrishna writes on issues of pertinence to India and Indians from Toronto.

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