What is the dark side of India's growing economy?
It’s precariously bad.
Please don't be influenced by foreign hedge fund managers who claim to be bullish on India. They just want to exploit our country, till it's dry.
- The driver of India’s economy is not IT, pharma or services. It also isn't gems, chemicals, automobiles or the various tech start-ups running on billions of dollars of investors' money. The driver of India's economy is infrastructure and real estate. All other sectors tag alongside this sector.
- The problem with this being the economy's driver is that not only is land limited, it comes at very great costs of environmental degradation, like air pollution, soil degradation, water tables drying up, entire species of flora and fauna going extinct etc. I can already feel the effects of climate change, with unusually cold winters, and heat in November. All these impact lives and livelihoods.
- India is a net exporter of capital. What this means is that year after year, more money flows out of India than comes in. This clearly explains why the rupee keeps sliding against the US dollar every year. It essentially means that to pay our debts, we’re ready to sell more of our minerals, fisheries, pharma and Info Tech for the same value of goods that we imported last year. A spiraling currency means that our debt is getting worse.
- Related to point 4, why don’t developed countries rely on real estate and infrastructure to grow their economies ? Because they export intellectual capital. The iPhone is designed in California, and most of it’s profits go to Apple regardless of the fact that many of it’s components are manufactured at slave camps in China, Taiwan, Vietnam etc. Most of Volkswagen’s and Toyota’s profits go to Germany and Japan respectively, even though they’re copy-pasted in India. These countries take their rent from the rest of the world, and that’s mainly why they’re wealthy.
- Coming back to real estate and infrastructure. India is essentially selling it’s family silver — it’s land, mines and rivers — to foreign investors, against a depreciating rupee to tide it’s debt. Sure, it’s GDP is rising at a very fast rate, but at the cost of selling one’s heirloom ? Is this growth even sustainable ? Due to environmental concerns in point 2, it is clearly not sustainable. One of the chief reasons of farmer suicides in India is the erratic rainfall due to climate change, depleting water tables and unpredictable temperatures.
- India is also witnessing jobless growth. Only the wheeler dealers of India’s scarce resources, like miners, telecom players, real estate firms etc. are making money. They’re crowding out the marginalized sections with their money power, and capturing scarce national resources. So, Gautam bhai was granted Chhattisgarh’s protected forests; presumably after ensuring that the local tribals are thrown out. He and his few shareholders makes billions, whereas the tribals, and you and I get nothing (not that I want anything; I’d rather let the forests be).
- Foreign money is crowding out people in the metros too. The billions pumped into real estate by NRIs and foreign investors helps the rupee keep afloat, but at the cost of locals being pushed out of city centres. A tiny pigeonhole of a flat costs at least Rs. 1 crore at central areas in some of the metros. We middle-class are paying the country’s debt you see !
- Forget wealth inequality, even income inequality is widening greatly in India. The above points exacerbate it. A time will come when tribals, villagers and middle-classes will have to resist and throw out this present oligarchy of foreign investors, crony capitalists and crooked politicians out.
That India’s economy has come this far by these means does not mean that it will continue like this forever. The rising roller-coaster will have to fall — and stop too.