Editorial

Millstone on economy

By Nagaland Post | Publish Date: 8/8/2020 12:27:06 PM IST

 Hyper nationalism in India driven by muscular religion-centric politics has spawned concepts that seek to justify decisions based on the misplaced sentiments that India is a world power- economically and militarily- thus, it can choose what it wants. True, every nation seeks to pursue decisions that are favourable. But the decisions have to be based on the practical reality and not fantasy. The narrative of hyper nationalism has dominated various media and as a consequence, the recent India-China border skirmishes have pushed the anti-China sentiment to the fore. This has become the mainstay for the mistaken belief among many Indians, who think that boycotting Chinese goods will not only put pressure on China to desist from expansionism on the border but also teach the communist giant a lesson that India of 2020 is not India of 1962. However, many economists see such a situation as an illusion. Maruti Suzuki Chairman RC Bhargava and Bajaj Auto Managing Director Rajiv Bajaj have said in no uncertain terms that a boycott of China will not benefit the Indian consumer or the industry. If anything, it could turn out to be counterproductive. The ban on Chinese goods is certainly not going to affect China more than it affects India. This will only harm India as it is dependent on Chinese imports. According to official statistics, India’s trade deficit with China rose to $46.56 billion in 2019. China’s exports to India totalled $58.33 billion, registering a meagre increase of 0.2% compared to $58.25 billion in 2015. India’s exports to China dropped 12% from 2015 to $11.76 billion. India exports less to China (mainly raw materials) and imports more (mainly electronics and other manufactured goods which are in high demand). India’s pharma sector has critical dependence on Chinese imports used in drugs manufacturing. China’s exports to India account for only 2 per cent of its total exports. So even if Indians boycott all the goods imported form China, it will not make as big an impact on China as to bring it to its knees before India. These indicate that almost every vital component of items manufactured or assembled in India(Make In India) are dependent on cheap Chinese goods. The other option of levying higher tariff on imported Chinese items or goods also does not appear to be rational. The added cost on imported Chinese items or components for Indian manufacturers will make these finished products more expensive, not only for the Indian customers but for Indian exporters. Either way, a ban or imposing stiff import tariff does not benefit India. The path to economic liberalisation in India was initiated in 1991 by Prime Minister P. V. Narasimha Rao and his then-Finance Minister Dr. Manmohan Singh. The economic policy made the Indian economy more market- and service-oriented, and expanding the role of private and foreign investment. However, what was attempted in the first four decades of India’s existence missed the path. Instead mantras like “self-reliance”, “import-substitution” and “protecting infant domestic industries” work- became keywords. India can do with more research on technological innovations, advanced agricultural practises, improving infrastructures, reshaping concepts for direct foreign investments, totally freeing the economy from government policies that seem to change with every whim and fancy of those in power and to ensure that wrong actions do not pursue right visions.

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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