Sixty years is normally associated with retirement. However, at 60, independent India remains young and vibrant. Perhaps, it has something to do with being just 17, post-liberalisation.
The Indian economy, which was long seen as a potent sleeping giant has now woken up and is looming large. The GDP growth rate is within striking range of a double-digit figure resulting in higher disposable incomes with its populace.
More than half of India’s 1.1 billion population is below the age of 25. Historically, this has been the most potent group for a long-term economic boom. Against the backdrop of a burgeoning economy, the income levels of people are also on an uptrend. These factors have greatly contributed to the growth of the Indian economy.
While all this has led to a literal dream come-true for the generation of privileged and well-educated Indians who were around 25 when the liberalisation juggernaut began to roll, the fact remains that the expected trickle down effect to the less-privileged has been far too slow.
Resultantly, the already existing class divide has widened. As one whose professional assignments has taken me across the length and breath of this wonderful country, I cannot help notice that slums with glaring and abject poverty co-exist at a stone’s throw away from opulent five-star hotels and shopping malls where conspicuous consumption is the order of the day.
I cannot thus, but help feel that unless this wide disparity is narrowed, even if only slowly and steadily, the ongoing India growth story could self-destruct. Now, that would be really tragic as it is primarily through wealth-creation that the trickle-down effect can materialise.
However, for this, better sensibility and sensitivity need to be displayed by the captains of industry. My hunch is that, deep down, they too know which way the winds have begun to blow.
While I am all for a free economy, the solutions on offer from some of its stoutest proponents are laughable. Take for example, Pension Funds. They play a key role in the developed markets, but in a burgeoning, but yet emerging market like India, it could be akin to playing with fire.
I say this based on skepticism about the ability (or should it be lack of it?) of most fund houses at the Indian bourses to handle such an onerous responsibility. It cannot but be over-stressed at this point, that the funds in question here are net of tax funds of tax-payers who have been milked dry through their earning life and then been literally thrown to the wolves without the cover of social security.
A performance appraisal of many fund houses over a ten-year period, which includes, both bull and bear market phases, exposes the tall claims about even taller abilities of some of our “star” fund managers. After all, if one were to benchmark performance over the last four years, chances are, given a dartboard; even a chimp might have found it difficult to yield negative returns.
Clearly then, while a booming Sensex is welcome, it clearly does not have the wherewithal to bridge the growing economic disparity. Give it a thought, fellow Indians, even as we celebrate 60 years of our hard-fought independence.
The writer is CEO, Lotus Knowlwealth, a knowledge based consulting firm.