It's a tale of 2 Indias

At a Euromoney conference ''Welcoming the World'', recently concluded in Delhi, comments made by several speakers indicated the story of two Indias: One presented by those with vision, and clarity of thought, the other presented by myopic, muddleheaded people. The former present case for optimism, opportunity and bullishness, latter of frustration and inaction.
N K Singh pointed out that even if India were to achieve a 6.2 per cent GDP growth, as expected this year, for the next decade, there would still be 48 million new unemployed people.To absorb these, it is imperative that India grows at 8 per cent per year.
Otherwise there would be unrest. To achieve this, we need individuals'' saving rate to go up from 24 per cent to 30 per cent. This, though, will be difficult, as long as interest rates on bank deposits (where more than 80 per cent of individual savings go) give a negative real rate of interest.
The reason this happens is because the politicians have, since Independence, been unable to contain their propensity to spend the country''s money (ie, from the Budget) as if it were their own.
A chunk of it has gone up to build a huge public sector, which returns, on average under 2 per cent on capital invested. By simply transferring it to private hand or even by giving public sector management, which is often excellent (the winner, eg, of this years E&Y best manager award is Mr Raha from ONGC), the return on assets could improve significantly, making capital far more productive.
And also freeing it up for providing a social net and education for the people.
That, though, is frowned upon by the Left who consider profit a four letter word but refuse to allow profitable PSUs to be sold.
The other highlight was Bush''s re election. The Sensex climbed 88 points that day and 219 over the week, to end at 5,891. It seems to hope that the India of optimism will prevail over those that still live in the murky clouds of a failed ideology.
Let''s hope that is true. It was the spring of hope, it was the winter of despair...