India is blessed with lots of Nobel laureates, economic experts and academic geniuses that mostly reside abroad and that too mostly in the Anglo-Saxon world. They drop by and visit us when the weather is good and give us gyan on how to solve poverty. Of course, these days everything is in the cloud so we get wisdom from the cloud too. Physical visits are not necessary especially since many of them find “this is not the India I grew up in”. That gravy train derailed in 2014.
Don’t expect them to do any serious introspection on why, despite being part of the establishment all these years, they did not turn India into another America with their expertise, so they could sit here and give gyan to Mozambique or Mongolia on poverty alleviation. And not have to lecture us from New York or Boston. Unless their case is that a highly developed, fully employed, healthy and prosperous advanced nation was handed over to Modi in 2014 and he ran it to ground. If you are a cynic, you can almost believe that Nobels, Bookers and Magsaysay’s are handed out not for what they have done but for how much damage they can do.
Raghuram Rajan is one of these experts. Go over his track record, you will find he was very much part of the establishment for years. He was our economic advisor from 2008, taking over as CEA from Kaushik Basu in 2012. Basu is yet another economic superstar who considers a day as wasted if he does not attack PM Modi in at least a dozen tweets. Such was the brilliant job Rajan did as CEA making us all rich that MMS promoted him as RBI Governor in 2013. He stayed on until Modi refused to give him a second term.
Since his return to academia, Rajan has been focused on telling us how wrong we were in electing Modi. That is if he is not too busy applying an intellectual coat of paint to fascist dynast Rahul Gandhi. Unfortunately, that paint needs a new coat every other month. As a wag puts it, he successfully predicted six of the last two recessions. Quite often he will be on TV channels, predicting gloom and doom. And our “fearless” journalists will interview him like some freshman kid interviewing a Nobel laureate professor with a reputation for a short temper, for the student’s magazine.
He can confidently talk to our “speaking truth to power” media because none of them will ask him about the increase in bad loans, loans given to connected cronies, coal blocks and other resources allocated to pals of the ruling elite without auctions and the loot of national resources that was the overarching theme of the UPA era. All under his watch as advisor and RBI governor, a vantage position from which he should have known exactly what was going on. No sir, he did not resign in disgust or do any “Award waapsi”. However, once Modi came to power, he started offering anti-establishment soundbites to durbari propaganda yellow journalists that morphed into “speaking truth to power journalists”
In May 2014, when UPA was already voted out and just days before leaving office RBI changed the gold import scheme, according to CAG resulting in windfall gains of Rs.4,500 cr to select businesses. When you hear lectures on “idea of India” remember incidents like this. Rajan justified this as a “reform”. Pity other “reforms” were not done in such great haste. Ever heard any “journalist” ask him about this?
Now RR has come out with yet another bizarre speech – this time he says “world cannot afford India to become another manufacturing powerhouse like China”. It should be obvious to anyone that he is trying to fire from the shoulders of the woke left climate fanatics that are now dominating the discourse in the US and Europe. It is an excuse even better than “dog ate the homework” and can explain anything as long as you stick to woke narratives.
As they are not accountable for their actions and control the media ecosystem – consequences don’t matter. Be it higher reliance on imported crude and gas as well as rising prices, supply squeezes and blackouts. So they can afford to come up with increasingly bizarre and illogical suggestions and try shove it down our throats.
To pander to this lobby, and hope to use them as force multipliers in his senseless attack on PLI, RR is now telling us that India should not become a manufacturing powerhouse and instead pursue “services”. That he seriously offers this solution to a nation of 1.4 billion people, not Singapore or even Malaysia, should be enough to dismiss it outright as a joke, but let us try to analyse this.
Imagine China is manufacturing $x worth of goods. Obviously, no one thinks if India becomes a “powerhouse” in manufacturing, they will also make $x so total output becomes $2x. That’s because the world’s consumption is not going to go up to $2x. Clearly, India will be taking some manufacturing away from China. So the climate impact will not be 2x.
Furthermore, every dollar of manufacturing that India takes over from China will be subjected to far greater and far more stringent environmental and green scrutiny than China ever faces or faced – and in a way, China effectively controls that outrage factory as it is mostly run by fringe leftists. Therefore, the world stands to gain and not lose by reducing Chinese manufacturing which is known to suffer from serious labour rights, intellectual property rights, human rights and environmental abuse both in China itself and in poor African and SEA countries where it extracts minerals and inputs.
It is foolish indeed to argue that the world will face a disaster if India becomes another manufacturing powerhouse. If indeed the world needs $2x the goods for both India and China to make, then it is the consumption and tech obsolescence we need to go after – not who makes it! After all, if there is demand, someone will do it. Is RR tweeting from a 2010 mobile? Wears Khadi?
But RR doesn’t allow himself to be distracted by facts and logic because he is essentially peddling an agenda. His statements become extremely logical and understandable once you ask yourself the right question – will it harm Modi/BJP and therefore benefit dynasts?
Moreover, everyone that has sense knows there are crores of Indians that need to move out of low-wage farms – to where? Call centres? Infosys? McKinsey? Sell insurance? – the answer is a substantial number of them will have to get into factories as we are way too much behind in that game. Yes, a certain number will go into services but that can’t be all. Countries like Bangladesh that our durbari economists like to praise (while attacking India for failing on the manufacturing front) have done that.
Even his earlier attacks on PLI have followed a set pattern – sweeping conclusions from dubious data. In an earlier article, he compares the price of the iPhone in India with the US and draws weird conclusions from that – that Modi is keeping phones expensive in India to benefit PLI. Now anyone that has shopped not just phones, but electronics over decades – from the times of Indira Gandhi to Modi, knows they are cheaper in Singapore or even the US. This has nothing to do with PLI. In fact, you can check iPhone prices in China – where it is made – they will be higher than in the USA! Obviously there are too many factors to count.
I have myself ordered electronics and IT gadgets from the USA to be shipped to Singapore – cheaper than local stores. The item would have travelled all the way from China or ASEAN to the USA and back, yet cheaper! Because the US has the scale, competitive markets and fantastic logistics and systems that reduce cost. India for these and other reasons has always been costly. No sir, they are not costly in India because Modi wants PLI.
Talking of phones, Indonesia has restricted any imported phone from being used in the country by locals, unless duty is paid and the IMEI is registered with customs. Duty exemptions are given for low-end ones but you still need to prove that and register. This is to promote local manufacturing. Imagine if Modi did that! There will be wall-to-wall vomiting. Lucky President Jokowi doesn’t face an army of pseudo-liberal frauds and charlatans posing as experts spinning fake narratives as Modi does.
And in a strangely ill-researched and hurriedly slapped-together piece of statistic, he quotes total imports and exports and tries to draw adverse conclusions on PLI from that! There are a million things that affect those numbers, that too in this COVID-ravaged world. He obviously does not bother drilling down a bit more to present credible arguments. Why this rush RR-ji, like your dimwit ward Rahul? 2024 is still far away, don’t shoot away all your bullets!
Of course, he quickly hedges his bets declaring we don’t have enough data. But then that doesn’t stop him from reaching predictable and politically convenient conclusions and presenting them innocently as “questions”. It is like me asking a question – Is RR attacking PLI because it harms China’s interests? Or not invented at 10JP? Of course, there are allegations buried in that question, so I am not going to ask them. Just highlighting a typical journalistic trick that sadly RR, from who we expect better, resorts to.
Yet another bizarre conclusion he draws is trying to blame PLI for higher component prices for our exporters. Does he even know or care to find out how much of our exporter’s cost goes to PLI products? 1%? 2%? 20%? Of course, he doesn’t. Or he would have cited them. He just throws allegations hoping something sticks. And knows the corrupt durbari media that never questioned him on his RBI track record in the UPA dacoity era and his numerous doomsday predictions since 2014 that have almost become a joke, will not question this too.
What RR fails to mention is as important as what he does. He mentions Vietnam but conveniently forgets that they too offer incentives to manufacturers, call it by whatever name. As it can be found from a simple Google search, I presume he has left that out intentionally. In fact, there is NO significant competing country that doesn’t offer incentives. If I were the CEO of some Korean or Japanese hi-tech MNC that announces a new plant, ministers from a dozen countries will happily kiss my backside to get me to invest in their country. Incentives of all sorts will be thrown at my feet. State and provincial level leaders will literally come to blows competing for my attention. It’s almost like a supermodel descending on Times Square asking “Who wants to go on a date with me?”
After all, the richest most powerful country on the planet, one that RR knows pretty well, is throwing billions at Samsung, Hyundai, TSMC, Toyota and others. It’s a direct assault on the third world, including India which is trying to ramp up its manufacturing. All cheered by the woke left crowd that enables dynastic loot, Hinduphobia and jihadi killings and attacks Modi day in and out. Will RR dare take on the wokes and mount such continuous and repeated attacks on Biden’s gifts to the industry in an NYT OpED? The US is rich yes, but that doesn’t mean it has no needs or wants. Of course not, he knows which side of his bread is buttered. Not that they will listen to him anyway.
RR also fails to mention that PLI goes far beyond chips and electronics. It does and should. His own home state, Tamilnadu, for which he is an advisor to the state government, will benefit from PLI for textile makers and auto components. In fact, they are already lining up. Hope he will not advise them to stop that.
One can go on citing any number of such arguments that makes his allegations sound, at best like sour grapes and at worse something far more sinister. After all billions are at stake along with millions of jobs. We can fine-tune it and polish our policies along the way but for God’s sake don’t try destroying it.
One sincerely hopes he will shed his blinkers and look at not just PLI but all other initiatives of Modi as an NRI that cares, a true unbiased academic of intellectual integrity and offer meaningful criticism and not present half-baked stats and politically loaded arguments to compete with palazzo serfs. We have other Aiyars to do that job.
