Great expectations

Those addicted to Pankaj Udhas’ ghazals of yore may be familiar with the following verse, “Kitne dino ke pyaase honge, yaaron socho to…shabnam ka qatra bhi jinko dariya lagta hain”. That, in essence, sums up the collective expectation of Indian businessmen from the National Democratic Alliance (NDA) after the United Progressive Alliance’s (UPA) dream team proved to be a nightmare.

In both its terms, the UPA had the benefit of easy global liquidity, which it could have strategically utilised to the nation’s advantage. It did not. Now, there is much hope that the next government will show a greater level of decisiveness, but for that to happen the NDA should, indeed, sweep to power. What, then, is the chance of a regime change? In this issue’s cover piece, Vinod Mehta, Editorial Chairman, Outlook Group, articulates on how he sees the political situation playing out. 

When optimism is in abundance, as it is now, “And then what?” is a good question to ask. Say, the Bharatiya Janata Party (BJP)-led NDA regains power with either front-runner Narendra Modi or much-accepted LK Advani as prime minister. Then what?

History, unfortunately, is witness that global factors have played spoilsport whenever the BJP has been in power. After being let down by its allies in 1996, it had the aftermath of the Southeast Asian crisis and collateral damage of Russia’s debt default to deal with in 1998. And in its most recent term, from 1999 to 2004, the bursting of the tech bubble and the ensuing US recession dimmed foreign investor appetite. Now more than ever, we need a favourable global environment but that is a variable not in our control.

As for banking on a lower domestic interest rate to support the economy in a rapidly deteriorating global climate, that, too, is not a done deal. It can only come at the cost of a declining currency, which will only add to our woes. Whoever next holds the reins at 7, Race Course Road, is better off remembering, “Those who don’t learn from history are condemned to repeat it.”