Growth & politics - a hazy connection
We often read news items about the country's growth rate. Mostly, these are about the RBI's actions (or prospective actions) on interest rates. Dhirendra Kumar reports.business Updated: May 16, 2011 20:41 IST
We often read news items about the country's growth rate. Mostly, these are about the RBI's actions (or prospective actions) on interest rates. In fact, a naïve reader or watcher of business news could well be forgiven for gathering an impression that there's a number called growth rate which changes in response to a number called rates that the RBI sets and that's about it.
It's unfortunate that the connection of growth to politics is not made more often or more explicit. The week after some very interesting state election results is a better time than any to think of these inputs to the growth rate of the country's economy. How many points of growth do you think Nitish Kumar's six years in Bihar or Tarun Kumar Gogoi's 10 in Assam worth? How many will Mamata Banerjee's coming years in West Bengal be worth?
The answers are not easily measurable because you could only speculate what they would have been otherwise. In any case, there's too much politics mixed up in the answers.
Certainly, you won't see any headlines that say that over the next 10 years, somewhere between X and Y per cent of extra growth can be expected because state politicians are realising that the best way of staying in power is to facilitate growth.
However, the on-ground reality is that not only do such connections exist, people can see them working in their lives, and they're eventually worth a lot more than many of the other headline factors. Ask anyone who lives in these places and they'll tell you that the government has to deliver just the basics of law and order, 'bijli, paani, sadak' and not much more. The people will manage the rest, thank you.