The Hindu Business Line : From defining 2006 to challenging 2007

Fifty years from now, when historians look back on the first half of the new millennium, they will acknowledge 2006 as a defining year in India's development; a year that seemed to encapsulate within it all the ambivalences of rapid economic growth. The numbers say it all and yet hide so much: An 8 per cent growth, all-time highs in exports and Foreign Direct Investment flows, an equity market that kept attracting investors, the emergence of India Inc on the global acquisitions scene, the highest growth in credit offtake in decades. The year seemed like one long party. Yet, 2006 also seemed to warn the nation of the dismal record of stagnation, poverty and other failures that stood out all the more for the brilliant record of growth in some sectors. Never before in the history of independent India has the magic of economic growth appeared so tantalising and yet so frustrating.

As India enters the new year, the ambivalences of the fastest growth in the world, barring China's, will appear more palpable to a historian fifty years from now. Never before has the nation created this level of wealth in a year; never before have its citizens enjoyed this level of prosperity, incomes and the pleasures of life. Yet never before have indebted farmers taken their own lives as they did in 2006 in such numbers. While the policymakers dream of turning Mumbai into a Shanghai, it is in fact turning into a nightmare. In 2007, those ambivalences will not remain so benign as they have been. If the rural sector does not show signs of rejuvenation, the growth will lose speed; if physical infrastructure does not improve in the urban areas, investors will shy away. If growth has to be sustained and deepened, an increasing number of the poor will have to be empowered with the right skills and disposable incomes to join the mainstream. In 2007, mounting despair at being left out of the growth process could lead a greater number of the dispossessed to take to city streets or their own lives on the farms.

The new year then holds an opportunity of redemption for the policymaker — a kind of tryst that is challenging but not frightening. In public forums and approach papers, the rhetoric is right; all that is needed is action to get the majority of Indians into the mainstream of prosperity. No other government in recent times has faced such a task in all its urgency; nor the risk of that growth unwinding through wilful neglect or the failure of its proposed policies for inclusive growth. That is the challenge of 2007.