Fasten your seatbelts

As 2019 dawns, it is somewhat difficult to summon up the cheeriness of spirit that a new year traditionally brings. That’s because the year ahead has all the markings of being a challenging one, both in India and abroad, one which will severely test the mettle of leaders. Unfortunately, from everything that we’ve seen so far, envisioned leadership is markedly in short supply. And given the contours of populism-driven geo-economic forces that have the world in their grip, that ‘leadership deficit’ may prove hard to bridge.

At home, the general elections, due by May, will likely compound the challenges in prioritising wise economic considerations over partisan, populist politics. Elections are, of course, an elemental part of the life-cycle of vibrant democracies. But it is something of an extravagance to expend, as we tend to do, many months in the run-up to such elections in the breathless pursuit of politics, and to put policy decisions in deep freeze. As it is, the ruling BJP-led coalition has a somewhat uninspiring economic record to defend. The malefic effects of demonetisation continue to ripple through the economy; the poorly designed Goods and Services Tax framework, which has prompted a ceaseless round of tweaks and iterations, has accentuated the pain of small businesses. And although the NDA may have ushered in an era of benign inflation, with fortuitous help from low crude oil prices for much of its term, even that success has come at a price. Low food inflation, for instance, has been underwritten by agrarian distress, which in turn has left the field open for the Opposition parties to exploit politically by setting off a populistic race to the bottom in the form of ineffectual farm-loan waivers. Whichever party or political formation returns to power in May will have its task cut out in restoring a degree of soundness to economic management and to rebuilding the institutional frameworks — of the judiciary, the RBI, and indeed of the free-market mechanism — that have weakened. The fractious nature of the polity, which the BJP’s cynical pursuit of divisiveness has worsened, will also need some healing. The prospects of the global economy also offer little comfort. Trump’s tariff wars pose serious risk to the multilateral world order and threaten global growth. His decision to pull out US troops from Syria and Afghanistan, will have profound consequences for the region, including India. Across the Atlantic, a no-deal Brexit could trigger more market turmoil, which even an India that continues to grow at 7-plus per cent will not be immune to. Overall, 2019 promises to be a bumpy ride.

Amidst this gloom though, there are plenty of bright sparks of hope. India is changing. From Section 377 to ‘triple talaq’, it is shedding the baggage of the past. Rising connectivity has unleashed an aspirational revolution. Above all, the energy and optimism of India’s vast pool of aspirational, talented and hard-working youth offer us our best chance yet of making India into a true global superpower.

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