The best thing to do in harsh times is to accept reality rather than contest it. That’s what your wise grandma would have said had you listened carefully. Of course, the next best thing to do is administer grandma’s remedies. Now, as the world hurtles towards an imminent collapse, or so, as the World Bank suggests that the global economy has “entered a dangerous period”, and the US Fed cautions against recovery from the 2008 crisis over the next three years, we have one giant problem at hand.

So, what else can we do other than wait and watch?

My short answer to that rather long question is just wait and watch.

The state polls in Uttar Pra­desh will indicate which way the wind will finally blow to Delhi. For now, there is no clear sign of resuscitating a moribund coalition at the Centre. With that kind of luck, you can rule out substantial policy moves till the next general elections. So, it’s time write off the first two years of the 12th plan commencing this April, when much of the growth template for the next five years should have been cast.

Sadly, what is a good two years frittered away in policy paralysis, by extension, means another five years gone down the drain during which, initiatives taken now, would have otherwise borne economic fruit. Rather than a five-year plan commencing right away, we are actually staring down seven-year-long black hole through which we will be dragged down from our upward economic climb by an establishment fallen into a rut. That’s the latest power talk in the corridors of Delhi, where whispers are often louder than the loudest ministerial bandobast.

Should the February elections disappoint the mandarins in Delhi, as they ought to, corporate and middle class aspirations will get slaughtered at the alter of populism this Ides of March when the next budget is presented? And that’s the sad story.

As things stand now, no other political establishment — whether the BJP or the Left, or the sundry power grabbers from centre-left to centre-right, who cobble up the so-called Third Front at times of stasis — either displays confidence in mature leadership or political sagacity to throw up a government driven to growth when the spoils for Raisina Hills come up for grabs again. A weak government in the next general elections would mean still another five years gone waste. And that means, if India’s 2020 dream looks sordid, its 2025 superpower ambition portends to em­erge as a certain nightmare.

Any bets on that?

I have a formidable backer of the muddle-through argument in the finance ministry’s former chief economic adviser during much of the so-called reforms that were scripted in the 1990s. Only last weekend, Shankar N Acharya warned in an interview on this page that we cannot even think of growing at 7 per cent any longer because we are not doing anything about some of our fundamental problems, including the asphyxiating energy shortage. In fact, on hindsight, Acharya, who served for eight crucial years as CEA, says much of our so-called 20-year-old economic reforms story was a hoax; nothing much really happened because we designed it that way.

Given its timing, it is difficult to say if Acharya’s is a political statement or an economic assessment. Or both? Considering that dispensations of every ideological hue have waded through Delhi’s political muddle in the past 20 years, Acharya’s should be a scathing comment on the intentions of all, which means, we the people, are sadly being taken for a ride by scoundrels of the first order, for a rather long, long time. And we are okay with that.

And yet, as with every impasse, there must be a way out because you can’t remain caught in a cleft stick forever. So, what’s our ch­ance of making a breach?

Here’s a closer look at grandma’s remedies. The smart do one of two things. Highway engineers when faced with insurmountable objects, such as a rock-solid mou­ntain, use overwhelming for­ce to bore a deep tunnel to the other end, whereas, flies trapped in nets often look for apertures to break free. In either case, you never really know what’s on the other side, unless you have personally arrived on the scene.

The wise, however, just watch, enjoying their freedom on either side of the barrier, and wait for time to lapse.

When the East Asian crisis emerged in 1997, India, administered by a weak and insipid government, did just that. And in the process, averted an economic collapse. Fiscal deficit, although still high, had been declining since the early 1990s. Current account deficit had dropped to 1.25 per cent in ’96-97; and external debt as a proportion of GDP stood at 24.7 per cent, comparing fav­ourably against 61.3 per cent for Indonesia and 62 per cent for Thailand. So, while the Asian crisis actually spread across a wider horizon, taking in its fold even Russia and Brazil, India escaped the turmoil relatively unscathed, by doing nothing in particular.

Yet, if you look back closely at those years, this was also the period when a large majority of Indians, for the first time in their history, embarked on a journey of relative prosperity launching us among the world’s high consumption-high growth economies of the 21st century. How did we manage that despite a weak dispensation in Delhi, and the so-called reforms worth nothing to write home about?

It was so because for the first time, the ordinary Indian unshackled his creative urges, while the politician was busy counting currency notes and bickering for the high table in Delhi, leaving the truly entrepreneurial to emerge on his own, unruffled by the machinations that usually accompany stable governments. Small wonder, unannounced to the world, in those bleak days, we spawned global business barons of the calibre of Sunil Mittal, Narayana Mu­rthy, Mukesh Ambani and Ratan Tata, even as global corporate giants such as Nokia, LG, Samsung and Honda carved up huge market shares here, spoiling consumers for choices.

But that was in the past. And India was still relatively insulated from depredations of the global market, relying solely on internal dynamics for growth. It’s a different story today; we are far more integrated with the world. The looming European crisis vastly overshadows the scale of the East Asian debacle, and the furrows in our economic landscape are beginning to show: Trade gap is at 10 per cent of GDP, current account deficit at 3.5 per cent, and external debt, primarily commercial short-term foreign currency loans, is at an all-time high. Fiscal de­ficit, a mark of government’s pro­fligacy, is rising alarmingly beca­use politicians are busy bribing voters with wasteful doles.

Can we afford to wait and watch?

We will come to the short logic for that later. Yet, short of sitting idle, we could also do one of the two things cited earlier to get to the other side of the obstacle. One, we could use overwhelming force to breakthrough the logjam into a brighter tomorrow. And two, we could make good our escape.

Rather than waste money on subsidies that disincentivise production and promote waste, we could actually spend our way through development, by executing mammoth projects to set the nation moving in the next two years and onwards. At last count, as reported in this paper a fortnight ago, the government hoped to save at least Rs 80,000 crore of its budgeted expenditure of Rs 12.58 crore this year, by just doing nothing. Instead, we should think of spending that kind of money every year on public-private initiatives to build more highways, bridges, ports, railways, power plants, steel mills and other brick-and-mortar works. We will not only build assets for our future, but also, invest in sustainable jobs for the masses.

The second way out, of course, is to look for an opportunity and set sail abroad, in a reverse colonialism of sorts. Periphery nations of the European Union, such as Poland, Hungary, the Czech Republic, Denmark and Finland, among others, which for years have built on their intellectual capital, are haunted by the pro­spect of a crumbling Fortress Europe sucking them into an abyss of somebody else’s making. In this time of distress, it makes sense to pick up their rich jewels so that we can bring knowledge and technology and innovation capital home to build our abundant future.

It’s either time for us to get on the move or idle away our time, watching the world go by.

After all, the so-called economic mess is the economists’ making to be found in statistical details and archival records. Warts and all, we have long endured the vicissitudes of time to remain what we are.

And that’s no mean achievement.

shubhrangshuroy@mydigitalfc.com