Nehruvian Hangover

India is changing is what we can hear from everyone in our country, whether its a businessman or a small villager at remotest corner . All these developments in recent years have brought immense change to the living standards of the people here. Post reform period has seen wealth of pouring into our country at a pace never seen before in past 250 years or so . It seems path is set now for a new dynamic and vibrant India where youngsters are starving to perform for their nation's glory. Young generation is doing everything to change the we have been doing in last 60 years. They want success and they are ready to sacrifice their comfort and struggle for living better life and a safe future. Post reform period has changed many things and the most important of all of them is the thought process of youngsters . They are more risk taking now , ready to give away their job to fulfill their entrepreneurial dreams . They are not willing to join government job just because their less work and job security. They are adding immensely towards the productivity of our country and their efforts are paying , India is developing at a sustained growth rate of more than 8% for last decade or so.

Youth have made us proud in all walks of life. A serviceman working in a small government firm in a small town of Faizabad proudly says to a mobile repair shop vendor that "don't think i am a fool . You cant charge so much for just this small repair. I also know these things. My son is an engineer." The last statement obviously comes with lot of pride and confidence. Every generation has to make some sacrifice so that the next generation may reap the benefit of that sacrifice. I salute these parents who sacrificed their dreams to fulfill the dream of their children. I salute this young generation who sacrificed their comfort to make a better nation called INDIA.

In India fastest growing segment of people is middle class because they have learn t to sacrifice .They are small businessmen and servicemen. They want their children to move to big cities and work their .I asked my father for a trip to Malaysia as these days cost to travel have come down considerably .He replied "son, I have made an investment and when the returns come i will surely go .Malaysia is a beautiful place I have heard." I asked "what investment and where??" He said "its you . Its you who can take me to Malaysia and if i go to Malaysia then how will i pay for your college fees . Choice is never between good or bad its always between good or better, better or best."

Their sacrifice has made me an engineer and now a MBA aspirant . My story is story of modern India. Its story of common middle class family in India .

BUT Something is bringing in frustration in youth. Why cant our policy maker see our zeal and passion in us? Still same problem of unemployment, Still civil amenities lack. Problem from that side are innumerable.

Why are we failing to reform more now? When everything is so clearly visible about opening up of sectors and good coming afterward then why still government bodies with so many of highly qualified and learned people fail?

Its because of the age they have lived in . They lived their times In Nehruvian age .Post independence era made us closed economy .Our policy makers did blunder when they decided to follow socialist path than a open economy .Nehru was our hero that time and everybody thought whatever he does was right .We accepted his policy as the best in the world .But closing up of economy had terrible impact on us .Our growth was virtually stagnant.We followed so called golden path , both Capitalism and Socialism , so as to again benefits of both the systems but we ended up caught up into the side effects of the both these systems.We failed miserably in providing equality that the socialism promises and on the other hand we failed to develop with the momentum with which other Asian and western economies were developing. We didn’t even learn from other Asian economies who were opening up in 1960s , 70s and 80s. Japan reforms came in 60s then came Malaysia, China, Taiwan, Indonesia .All made huge progress but we never took them seriously .Ultimately when our economy was in verge of collapsing then came the reforms which took only 8 hours by a team to 3 great economist and Politician to end a deadlock of past 40 yrs and rest is history .India started growing to become one of the fastest growing economies of the world .But even now our Politician feel good about Nehruvian system .This may be because they are not ready to adjust with current system .They are not fast enough to make new policy or amend the new one , thanks to Nehruvian age. Nehruvian age has made whole of our system inefficient. Still police functions old fashion. Big government bodies are still the market place for all corrupt practices. Again thanks to Nehru for making civil services the most valued post and then post civil servants to run government industries .Mr Jawahar Lal Nehru once said that these big industries are not meant to make profits but to provide money to the poor .This could the weirdest way to make poor rich.Government wanted to make poor rich by making rich poorer.What a disgusting stand.Most of the people in most important posts in our country belong to that age and they have seen only the lazy and lethargic India and they tend to continue with that way of working. Now since most of this people are in politics or government sector so undoubtedly these are the center for all the lethargic activities of India. So its time that old generation should take retirement if they feel they cant bear the burden of ultra fast Indian development and pass the baton to new age sprinter. Now its not just about running in the race...its about winning and speed is SUPERSONIC.

Our leaders did not have much sense of governance and economics and their successors are still not able to get out of those days hangover .

History repeats and changes..

Economic turmoil has set economist across the globe debating about best economic system which could immune this world from such crashes in future.Looking into the past suggests us that whichever way of economic administration we follow or whatever theory economist suggest...CYCLE OF DOWNTURN AND UPTURN goes on and on.Free market or Marxist way or Keynesian way to control the uncontrolled..debate will go on.
History is repeating.Great depression, which is the most dreaded event of our economic history about which it was thought that we have learned enough now to keep ourselves aloof from it, is once again in minds of everybody around the globe.
There are many analogies between the GREAT DEPRESSION and 2008 economic disaster as many may quote.

The Great Depression was not triggered by a sudden, total collapse in the stock market. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929 .Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930.

Now compare it with situation today.Stock markets in US has crashed and government is out with bailout packages which may some how resist the current downturn and even help DOW and NASDAQ to take a break from riding bear and move up but next year when consumer would cut their expenditure by 10 percent or 15 percent could lead to another great crash of stock market and with banks and big sectors already faulting at regular basis,commodity prices continuously hitting low and unemployment hitting highs,are we heading towards another Great Depression.Lehman brother could survive great depression but failed to do so in this turmoil.Will situation get worse from hereon???

Certainly Yes,history repeats itself.We may not fall into the lows of that period but things will be difficult in times to come.Cities all around the world will be hit hard. Real estate sector will be virtually halted in many countries. Steel and other commodities have already suffered from price fall by roughly 30 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging too will suffer.This all seems very similar to what has happened around 88 years ago.

But history does not only repeats, it also changes the way this world functions.

The global economic depression of the 1930s had a crushing and widespread impact on Latin America, forcing Latin American nations to change their economic policies away from export-oriented growth and more toward the long-neglected diversification of their economies. In particular, these nations toward an endogenous economic model based on industrialization. The economic crisis and the endogenous reforms that resulted from it led to significant social and political consequences and major transformations of social structures within Latin America.These changes helped US to build better economy and become a economic giant for next 100 years or so.

This turmoil has opened chance for the world again.This is a great chance for developing countries like India and China to shift the economic power towards themselves but that would require more than just the government determination. India and China with large skilled and cheap human capital can make use of this opportunity to strengthen economy.New York can be replaced by Shanghai or Mumbai or Bangalore as economic capital of the world.Developing countries like India have already started getting some benefit from this recession as big companies have started outsourcing more to developing ones in order to be cost effective and save their balance sheets from drought of funds. Asia can come out to become next economic hub when this recession gets over. Unipolar economic world might not remain same in next 20 years.

Let us see will it be US for next 100 years or will there be a replacement this time.