The Hindu Business Line : The reality beyond Davos

AS THE CURTAINS fell on the World Economic Forum at Davos, the Indian contingent consisting of prominent ministers, bureaucrats and industrialists must have felt a deep glow of satisfaction at the warm accolades that came India's way in the Swiss resort. For many regular visitors to the forum, the just-concluded conclave would have been infused with the justifiable pride at India having arrived centre-stage at what is arguably the world's most glamorous meeting of leaders and industrialists from around the developed world. Fifteen years ago, when India had just launched on its reform path, Davos was the rich man's club (read G-7 club), into which it had gained entry through the back door, as it were. Now it almost set the agenda, playing the host at various events such as `happy hours' and breakfasts; all this, apart from being the centre of attraction, along with China, as the fastest growing economies in Asia, if not the world, over the last two years. The campaign `India Everywhere' seemed most apposite to the sunny confidence that radiated from the Indian speakers at various sessions.

The danger lies, however, in assuming that India has arrived simply because it was the star attraction along with China. To be sure, that attention afforded our leaders the occasion to play economic statesmen at a forum dominated by the developed nations talking down to their poorer cousins. The Finance Minister, Mr P. Chidambaram, blamed the developed nations for global economic imbalances and urged them to correct that issue urgently. The Commerce and Industry Minister, Mr Kamal Nath, reminded the EU and the US that their farm subsidies and peak tariffs were stalling the successful completion of the Doha Round of trade negotiations. The WEF is, of course, a talking shop, and such interventions in contentious issues get drowned in the genial bonhomie that permeates the forum. At best, business leaders get to agree on deals. But, for the ministers, the journey back home should be a grim reminder of how superficially the growth path has cut through India's endemic problems.

Yet the Davos meet cannot be ruled out as an extended soiree. For India, all the attention it received puts on it the onus to outperform itself. A 7-8 per cent growth over the last two years has stretched itself taut and could easily snap if the flawed growth pattern persists. The 9 per cent growth in services will sputter if the market does not expand; and where else can it do so except in the most neglected rural parts of the economy? While Mr Kamal Nath was exhorting western investors to bring in employment-friendly capital he must have known that policymakers down the years have done precious little to encourage capital flows in the sectors that need it the most. National Sample Survey data reflect the steady decline in the rate of employment generation in agriculture over the 1990s. Indian urban centres, hubs of much-vaunted growth, are choking on their own filth for lack of finances and committed administration. More than 25 lakh children die in the country every year for entirely avoidable reasons. Such realities should be enough to dim the Davos afterglow.