Cassandras who confidently predicted the defeat of the Brexit campaign in the June referendum have continued with their dire forecasts of doom and gloom. The most vocal of them are hedge fund managers, currency speculators and the like who, with an eye to the main chance, prefer a fast buck and a faster retreat into the shadows. Their wails are of little consequence in the long-term, hence best ignored. New vistas for Britain are now opening, which add exponentially to her trade and investment opportunities. India is one such prospective partner. Her investments in the UK exceed those in the entire European Union. There are 700 Indian companies operating in the UK, sourcing 100,000 local jobs Reciprocally, Britain is India largest investor among G20 nations. A strong platform is already in place for a higher trajectory in bilateral growth numbers.
Among the unfazed by the overblown Brexit controversy are the big names of India’s software services. It is their considered view that will be short negative effect on the Indian IT industry. In the long-term, the opportunities for Indian IT companies will grow, as will for India’s textile industry and small cars. The previous British Business Secretary was quick of the mark with a visit to Mumbai and Delhi meeting company heads and ministers and clearing the decks for the post-Brexit era ready to unfold. The new UK Parliamentary Under-Secretary of State at the Foreign and Commonwealth Office and Minister for Asia and the Pacific, Aloke Sharma, was in Delhi testing the waters. The Kohinoor, he warned dismissively was not his agenda, a comment directed at India’s cut price patriots His business was serious for both countries. Apart from defence and security issues, including terrorism, cyber terrorism in which India and Britain are strategic partners, were discussed with Indian ministers. Mr Sharma dwelt on the growing economic ties between the countries which are moving from strength to strength, with bilateral trade worth 16 billion pounds. The British Council had a network across India that was more extensive than in any foreign country. There vis life after Brexit and the burgeoning promise of a better tomorrow.
Turn that led to economic surge
‘It the economy, stupid,’ was the remark that former US president, Bill Clinton made during his election campaign. The economy can win or lose power for an incumbent or aspiring president or prime minister in almost any part of the world. For India, in 1991, an economic and political crisis melded into an existential crisis of the gravest significance. The first Iraq war unleashed by America’s H.W Bush administration had led to a an exponential rise in oil prices which India’s depleted exchequer was unable to finance, with a fortnight’s foreign exchange reserves left. No international lending agency was prepared to issue a loan unless the required quantity of gold was deposited in London. This was duly done with then Finance Minister doing so in person. The country had been in political gridlock ever since the fall of the Rajiv Gandhi government and the subsequent accession of two minority regimes led by V .P. Singh and Chandrasekar respectively, neither of whom had the authority to chart a new course. Worse: in May 1991, Rajiv Gandhi was tragically assassinated during an election rally in Chennai making confusion worse confounded. In the general election that followed the Congress party emerged with a narrow majority and P.V. Narasimha Rao took over the reins as the new prime minister of an India in deep shock. Kashmir was being torn apart as a jihadi insurgency took hold, the Khalistani terrorism in Punjab, with Pakistan doing its best to succor the terrorists with money, arms and refuge, the situation couldn’t have been grimmer.
The new prime minister had fateful decisions to make. The most strategic was the revival of the conomy, not with short-term measures, but through the adoption of a radically new economic course – in other words, root and branch reform. He needed a face outside the tried circle of politicians to implement them, some with the requisite knowledge of the Indian economy and its shortcomings with the necessary expertise to carve out the remedies. His chose Dr Manmohan Singh, a former governor of the Reserve Bank of India, whose work in the job he well knew, to perform this arduous task. Singh, as a technocrat, lacking political clout, understood the pitfalls and the opposition he was likely to face from a political class grown fat the perks and perquisites of the licence-and-permit raj that he was entrusted with dismantling. Rao assured him of firm and unstinting support. He told his finance minister to go ahead and do what was necessary and leave the politics to him. The hedgehog and the fox would work in tandem for the next five years and change the face of India, breathing hope of a new dawn into its poverty-stricken citizens and frustrated entrepreneurs. On 25 July 1991, Finance Minister Manmohan Singh presented his game-changing budget to Parliament. The weeds of rules and regulation that had throttled growth were cast aside in one fell swoop and the stunted economy released from its fetters.
The anniversary of the day remarkable was widely celebrated in the media with informed analysis of its seminal significance. Economic pundits and gurus of almost every political agreed that it had turned out to be warts and all – for Rome wasn’t built in a day - India’s great leap forward into the future. It was the secure platform which has been chartered an upward trajectory of continuing reform such we have seen in the 25 years that have passed.
Dr Singh, gracious as ever, paid an especially warm tribute to the memory of Narasimha Rao, but also acknowledged handsomely the cooperation he had received from colleagues in government, such as P.Chidambaram, and numerous friendly and approving experts outside it.
With the economy stabilized and growth assured, the challenges to India integrity were met with renewed confidence and surmounted. The media stocktaking was an eminently worthwhile exercise. It was a moment to ponder and reflect, and go forward, remembering the lessons of the past.
New entrants in India’s middle class
The ranks of India’s middle are being swelled by new and unexpected entrants: drivers, welders, carpenters, launderers, pani puri vendors, dosa sellers, cable TV technicians and others who populate the street. They have one thing in common: energy, a keen eye for opportunity and a steadfast determination to escape poverty for the betterment of themselves and their families. They presently belong to the lower end of the middle class, which has been a major step forward in their lives
This upward mobility is the subject of a recent paper entitled ‘The Rise of the New Indian Middle Class and the Role of Off-shoring of Services,’ and co-authored by Mumbai University’s School of Economics, Professor Neeraj Hatekar and his colleague Sandhya Krishna. It finds that a faster rate of growth and higher intensity of work have been largely responsible for the upward mobility that is witnessed across the country today. They write: ‘Lower middle class households earn better not because they are engaged in different occupations from the poor, but because they been able to get their family members to do the same things that the poor do.’ Lower middle class refers to households whoe per capita incomes per day vary from Rs 134 to Rs 268.
Venkatesh Kumar, political scientist and professor at the Mumbai-based Centre for Governance and Public Policy agrees with the findings above. ‘The social base of the middle classes is expanding and it is cutting across caste, occupation, asge, gender and geography,’ he says. A survey of 800 such households revealed that almost everyone had a cell phone and a watch or a clock. Over 70 per cent had access to electricity and around 60 per cent owned a fan and a colour television set, pressure cooker and steel utensils, plus jewillery.
Between 2005 and 2011-12 the middle class grew from 28 per cent to a little over 50 per cent. ‘The middle cclass is now a diversified group because the country now offers various opportunities for the creation of wealth,’ says S.Parasuraman, Director of the Tata Institute of Social Sciences.
IT services have contributed exponentially to the swelling numbers of the middle and upper reaches of the middle class, Educational opportunities, improved banking facilities have contributed significantly to the overall process.
