What does one talk about, when one talks of the economy, of economic slowdown, falling growth?

The rhetoric of the policymakers and their “amplifiers” in the financial print media and business channels about “economic” stagnation, loss of confidence, falling investor sentiment assumes or takes for granted an understanding of the national economy as an organic entity.

That entity, it is conceded, may be riven with inequalities, differences in degrees of growth but it is still an economy united by the driving force of markets and enterprise.

But is it? Policymakers may assume the fortunes of the entire economy spatially located in the Indian Republic to be tied up with those of its “drivers.” So if the Services sector’s growth rate falls, it would be natural to think of that slide as a national upset.

But the Indian economy more than ever before consists of two worlds — and the gap between them is growing.

Forget the whimsical, the futile debates about where to draw the line between poverty and non-poverty, as if the capacity to enjoy a decent life were dependent on a statistic instead of on a whole series of essentials that you and I take so much for granted: jobs, health, education and the perpetuation of the family line.

Reforms as convenience

Much of the notion that economic progress for the last two decades has led to a reduction in poverty is an attempt to paper over the deep divisions that exist between the two worlds, one of appropriation and the other of dispossession.

Think of the way the “economy” has progressed since reforms began. Since 1991, the changes contemplated under the rubric of liberalisation have had the urban-based formal sector in mind. In part, this was convenient and contingent. Agriculture lost primacy in the new discourse. Abandoned, quite by default, was the earlier emphasis on land reforms – or land to the tiller.

An Anglo-American type of industrial revolution would have meant land consolidation, the conversion of agriculture into mechanised farming as a perquisite of an industrial revolution. The break in approach, of policy and philosophy, was achieved effortlessly and fortuitously. The “crisis” of 1991, of a balance of payments problem, therefore, became easier to handle than its structural causes. It was easier to locate the agents of reform among a constituency that understood the language of change, of a break from the past; after initial murmurs of protest, the formal sector saw opportunities in global “competition” and over the years turned into ardent supporters of even wider open doors and the stripping away of the painstakingly created fiscal and monetary regulatory regime.

Preaching to the converted

A new symbiotic relationship was born between the largely urban-based industrialists and a policymaking regime now set on re-making “India” according to the blinding lights of western “progress” — never mind that we had got off on the wrong foot; leaving agriculture and the vast population to fend for themselves and unmindful of the gap between growth and mechanisms to prevent the usurpation of natural resources.

Preaching to the converted had its merits, and within ten years the cosy relations between urbane policymakers and urban capitalists had borne fruit in the highest-ever GDP growth.

The numbers validated the success of reforms; the GDP’s drivers had been replaced: no longer agriculture but Services and then industry.

That was taken as proof of India’s claim to emerging market-status; did not development theory measure progress by the advancement of a country’s Services sector as the leading agent of its economic expansion?

Over the years since 1991, agriculture, indeed the rural or agrarian world and its distresses moved increasingly into the darkness beyond the splash of neon-lit urban “progress” and its relentless amplification.

The English-language media set the tone for the transmission of the new discourse. The emergence of business channels helped policymakers enormously, setting the tones of ‘Shining India’ by the endless celebration of the formal economy’s avenues for wealth creation.

The relation between policymaking and its amplification does not end with a simple celebration of “progress.” It also involves the erasure of poverty as it is experienced. Over the years, the media, with a few notable exceptions, and mainstream economics research by and large, have accepted and transmitted the idea of the poverty line as a solution in search of a problem.

Similarly, agrarian unrest is viewed by policymaking as a law and order problem and the destruction of the environment not just as an inevitable consequence of “progress” but as a right of hitherto developing countries to indulge in.

Policymakers need not despair about falling GDP growth rates or declining investor sentiment. Whether FDI in retail comes now or after the general elections, come it will.

One stumbling block might have been history, the memory of an age when India considered itself a peasant society where the values of a communitarian life provided a foil to the wickedness of city life, as Ashis Nandy once remarked in a public lecture.

Two decades of reforms have achieved a significant rupture with the past and if nothing else policymakers must take pride in authoring that historical break. The idea of progress, of culture and well-being have been redefined; so has time itself with the present all that matters.

That’s why the current slowdown hurts, as do high interest rates — to some of us.