• EconAfterHours

Rupiyah-e-Kamzarf: The Name of the Rose, and the INR’s growth

Updated: Mar 10, 2020

by Navya Rana

“that nil admirari, the self-remembering assumption of manliness, that endeavour of twopence halfpenny to look as high as threepence.” -Anthony Trollope

Hailed once upon a time as the golden bird, India’s contribution to the world GDP is estimated to have been almost one-fourth (24.4% in 1700, greater than Europe’s 21.9%) of the whole before the comeuppance of the cage of the British, under whose able denouement it was relegated to a measly 7.5% (1913).


In the jagged continuity of events, notable upheavals led to freedom, while the Rupiya stood a slave to bygone laments. To hark back to an ashen glory is not the intention of your beloved authoress, for money to her is akālaja. Time1 and grief2, however, are cyclical. In the continuum, then, soon after 1947, a dichotomy came up concerning the ideals surrounding development: the socialists, revitalized by what was Chacha Nehru’s explicit support to the Left, (an ode to his Cambridge affliction) wanted a neo-Soviet conception (Mohan, pp. 183-92), whilst another faction sought the adoption of the liberal-capitalist model prevalent in Europe. There was consensus, however, upon the fact that socio-economic equity and development shall be the quintessential tenets of a free India. Up came discursive policy measures, such as the Bombay plan conceptualized by the bourgeoisie, and the Planning Commission. The five-years-plan model was to be the matryoshka for a nation in the making. By the 1950’s, capital and trade deficits were aplenty. The first five-year-plan (which held the agrarian sector in terrific regard) was successful, outshining the expected increase of 11-12% in the national income by a staggering 8% (Sarma, pp. 180) but to Rogers’ trickle-down theory it did not bear the pre-supposed semblance. The Mahalanobian successor (’56-61), however, could not resign itself to the buoyancy expected. B.R. Shenoy, later dubbed “the only liberal economist between Athens and Tokyo”, stipulated “even on the assumption of a doubling of the rate of growth of the national income, the demand for the additional cash balances cannot be of an order to justify deficit financing on a scale equivalent to 50-60% of the money supply” (Shenoy, pp.10). Scholars also argued that it displayed an “urban bias”, statements thence on corroborated by the 1957 crisis of external payments. Self-sustenance assumed importance, and the third Plan wanted to stress upon agriculture. Before it could be implemented effectively, China (angered by what it felt were India’s expansionist designs on Tibet) launched offensives in Ladakh and the north-east (’62). Faced with a megalomaniacal army, India had to divert its attention and funds from the economic exercise to Defence. Chaos prevailed, and the dragon emerged victorious. Cheerful, in 1965, Pakistan thought it could pull off a 1962-2.0. It could not. But its allies (read USA, et al), for reasons etched in Beckettian silences, “necessitated more devaluation”, in the backdrop of which India faced extensive droughts in the period from 1965 to ’67; “cereal production fell to only 62.4 million tons in 1966 and 65.9 million tons in 1967, compared to an average of about 73 million tons in the previous two years. (Ninno, et al, pp.15). This devaluation was to be the apotheosis of the stage. After Komrade Nehru’s attempts and Shastri’s stint, came Indira Gandhi’s epokha. She nationalized 14 banks, abolished the privy purse, made the Green Revolution a priority and launched the now-infamous Garibi Hatao (literally: remove poverty) campaign. The economic growth rate during this period was considerably lower than the expected (3.3 of the optimistic 5.6% in early 1970s). In contrast, the 1980’s and 90’s saw dramatic transformations, and for the greater good. Under Rajiv Gandhi, an exciter of passions, socialist boutonnière was supplanted by liberal (-ish) glasnost. Price controls were removed and rations were ended, leading to an upsurge in the standard of living. By 1985, there had been a “steady growth in agriculture, controls on the rate of inflation, and favourable balance of payments”; and the GDP stood at 633.6 (bn. US$ P.P.P.), departing from the previous year’s 583.3 (IMF, Report for Selected Countries and Subjects, 2018). The virtuosity was ephemeral: a critical forex situation emerged in 1991. Liberalization, privatization and globalization (LPG) were fully implemented in one of the most important economic policy markers of modern India. Now, the 3rd largest economy by P.P.P. and the 5th largest by nominal GDP, India shall, perhaps, withdraw from its recidivist inclinations. The Kamzarf zeitgeist3 must change, and until then, assassin grief4 ails the wheels of market, and these are wounds no Harish can Salve.

Works Cited:

Mohan, Jag. “Jawaharlal Nehru and His Socialism.” India International Centre Quarterly, vol. 2, no. 3, 1975, pp. 183–192. Sarma, N. A. “Economic Development in India: The First and Second Five Year Plans.” Staff Papers (International Monetary Fund), vol. 6, no. 2, 1958, pp. 180. Shenoy, Bellikoth Ragunath. “A Note of Dissent on the Memorandum of the Panel of Economists.” 1955, pp. 10. Ninno, Carlo Del, Paul Anthony Dorosh, and Kalanidhi Subbarao. “Food Aid and Food Security in the Short and Long Run: Country Experience from Asia and sub-Saharan Africa.” World Bank, Social Protection, 2005.

Notes:

1. Kāla in the Rig Veda 2. Richard Solomon’s Opponent Process Theory of emotions 3. Upon comparison with other countries. Elab. Table 1 (share of World GDP in %) 4. “…the kind of grief that lies in wait and attacks you from ambush, with no warning and no mercy. I know now that assassin grief can hide for years and then strike suddenly on the happiest day, without discernible reason or exegesis…I couldn’t understand it, so I tried to fight it as a man fights pain or despair. But you can’t bite down on assassin grief and will it away. The enemy stalks you, step for step, and knows your every move before you make it. The enemy is your own grieving heart and, when it strikes, it can’t miss.” —Gregory David Roberts in ‘Shantaram’

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