Blunder of Past, Pain in Prsent: Prof Kumar

Currently battered Indian economy is just paying the costs of historical mistakes. To understand the concurrent economy, its development since independence needs to be seen in a long-term perspective. That is how Professor Arun Kumar from Jawahar Lal University saw Indian economy and also worded his thoughts in a book named Indian Economy since Independence: Persisting Colonial Disruption.

Prof. Kumar made his appearance at orientation ceremony held at Indian Institute of Mass Communication, New Delhi where he lectured on current macro-economic challenges and also put forth historical angles to corroborate why India chronically suffers from those challenges. He explained that there is sentiment of slowdown in almost each industry like automobile, realty, manufacturing and infrastructure etc. which causes export-slowdown. As India is an import driven country and there is slump in exports, it consistently runs Current Account Deficit which puts downward pressure on rupee and makes it depreciate against dollar. These developments make rating agencies like CRISIL, Standard & Poor’s etc. to downgrade ratings thus prompt capital-flight i.e. outflow of dollars by foreign investors. As Lack of dollars is the cause of ballooning CAD in the first place, India gets stuck into vicious cycle. Cure for one becomes the pain for another and cycle keeps extracting its fuel out of pains.

Why India could not break this vicious cycle, could not turn it into virtuous one is because the country never focused on indigenous means and ended up being the victim of external sector volatility. The country remained work-horses, provided cheap labor to overseas manufactures but never itself developed technologies, never worked on exploiting internal resources

To surmise his entire lecture, historically we, Indians failed to stay original and innovative and got increasingly dependent on volatile foreign trade but we will have to understand that external weather cannot be controlled so its better to develop internal resistance.