When India’s GDP first touched the $1-trillion mark in November 2007, it left most analysts surprised. The India story then was just about beginning to gather momentum. Lost in the deluge of the credit crisis, perhaps, the event passed us by.
Two trillion-dollar events, really — GDP and market capitalisation, both crossed the Rs 45,00,000 crore mark. These zeroes are rather difficult to grasp, though we’ve just about managed to come to grips with them.
This number brought with it the realisation of a reality --- India was not only changing, it had changed. A number can’t make any statement, leave alone comment upon the future of a nation. They are subservient to the will of people in democracies (and dictators in autocracies).
But this number yanked India out into an economically elite club of 12 countries with GDPs of $1 trillion, from the US and Japan down to India and Russia.
When the innards of the credit crisis were finally laid bare on September 15, 2008 with the fall of Lehman Brothers and the subsequent international financial turmoil, this number and its underlying growth potential pushed India on the high table of global finance. In November 2008, when a lame duck George Bush invited the leaders of Group of 20 (G20) to Washington DC for a summit, India was an active participant.
In the ensuing discussions, I found that even though India was nowhere as wealthy as many other nations, it brought with it an intellectual capital and an alternative development model, even as Capitalism in its pure form, was beginning to wane. Reporting from there, I found some of the ideas that Indian policymakers were flirting with in Prime Minister Manmohan Singh’s Air India One present in the final communiqué.
With a GDP of $2 trillion just 13 months away, India will enter the league of seven nations including Italy and the UK. This was supposed to happen a few years later. But the 9% growth trajectory combined with slower growth in EU will end up accelerating this process.
A $2-trillion economy brings with it benefits as well as responsibilities. Economic growth is all very well but its moral virtues are falling by the wayside. So, while we need to ensure that we don’t lose track of high growth, we need to take steps to make it as inclusive as possible — a $2-trillion economy means nothing to the 850 million of our citizens who live on less than $2 a day.
That inclusiveness needs to impact India’s foreign economic policy such that we have mutual economic stakes in our immediate borders. China has done this very well with Taiwan with its Economic Cooperation Framework Agreement.
A $2 trillion economy means India becomes a regional economic power — and has to engage in economic diplomacy in its immediate neighbourhood.
Finally, the growing hubris that is infecting us needs to end. Even with $2 trillion, the US still will be eight times our size and China about six times. A little humility will help.