Of Faith And Forwards

Faith, Forwards, and The Lamp of Reason

Diogenes, searching for an honest man

Last week, I read this message in a WhatsApp group, “I sense we are at a threshold of creating an economic environment for sustained growth”.

The word ‘sense’ in this context is ambiguous, since economic growth has little to do with the five commonly recognised senses, the bodily faculties of sight, hearing, taste, smell and touch. There is, of course, a sixth sense, a personal instinct, which belongs in the realm of the occult - it cannot be analysed or corroborated, and doesn’t belong in a discussion among a group of econ graduates. 

The most obvious place to look for economic growth numbers is in the rear-view mirror, and this shows that the Indian economy was already slowing by 2019, that it got hit by Covid, and that the recovery has not been as strong as anticipated. But looking ahead, beyond  Amrit Kaal and “India is Great” forwards on WhatsApp, how do we get a glimpse into the likely trajectory of the Indian economy?

My favored metric is Investment. Without investment, there is no growth, and as Ajay Shah and Akshay Jaitly showed in a paper* earlier this month, investment in Indian infrastructure peaked in 2013, and has been tapering since then. Private sector investment in infrastructure has slumped, and while the government has tried to bridge the gap, it hasn’t quite succeeded. 

Outside of infrastructure, Indian industrialists are still waiting for demand to recover, and their animal spirits have not recovered from the investment slump that followed the boom of 2003 to 2007 and the bust of 2008. Even if it had, there is an emerging constraint to investment, namely savings. The last decade has seen a secular decline in our gross savings rate**, from 33% to 28%. Domestic savings can be supplemented by foreign investment, and India has a reasonable track record of attracting FDI, but the first half of this financial year has seen muted inflows, and the ongoing tightening of money by the West doesn’t hold out much promise of cheer on this front. 

Between lower savings, dwindling global flows, and a meek investment climate, the decline in Indian investment*** is quite stark, from a peak of just under 40% of our GDP in 2011-12, to something of the order of 30% today. Unless something changes radically, I see no logical basis to expect our economy to suddenly see an upsurge of growth. 

The problem, I guess, is that I have no faith.

Faith came up in a different context this week, when I reviewed an anthology, Mystics and Sceptics, edited by Namita Gokhale. At the launch of the book, in Jaipur, a middle-aged lady in the audience asked how she could learn ‘trance running’. She was referring to accounts from Tibet of “mysterious runners who are said to cross the country running for days on end without pause, in a kind of ecstasy”. A stodgy runner myself, I related to her desire for a magic wand, but the realist in me screamed. “Please start running first, Ma’am.”

I later read the book, and the piece Mystic Marathon, by Rene von Nebesky Wojkowitz, concluded, “the fabulous performance (of the trance runners)… is due primarily to perfect bodily control, acquired by years of strenuous exercise, and the development of certain powers that are actually latent in everyone.”

Let’s hear it for the rationalists.

Another lady asked why sceptics and mystics featured in the same book. Namita’s answer, and I wish I could have recorded it accurately, was that mysticism and scepticism must live together. Not just side by side, I reflected - my own being has often been transported by what appear to be mystic events. I have no reason to deny these, nor will I abandon the scepticism which equips me to reject the fakery of  exploitative godmen such as Gurmeet Ram Rahim.

Namita’s book is subtitled ‘In Search of Himalayan Masters’, and among the mountain journeys it traces is that of Rahul Sanskritayana, “quintessential sceptic and seeker”. He began to study Buddhism when he was imprisoned during the freedom movement, then spent time with monks in the monasteries of Ladakh, and tried to enter Tibet at a time when it was closed to foreigners. While he did eventually reach Tibet, in a series of adventures marked by audacity and dare-devilry, it was in Sri Lanka that he found 

“what I had been searching for in all my wanderings”, 

the Buddha’s exhortation, 

“Do not believe by deference to some book or tradition or to your elders; always decide upon belief by your own examination”

Indian philosophy has a word for this, something to which Nitin Pai - of the Takshashila Institution - drew my attention last week. It is called anvikshiki, a Sanskrit word meaning the science of inquiry. If I understood Nitin right, it was Kautilya, he of the Arthashastra, who first asserted that the science of the soul needed to be supported by reason and reflection.

Economics, too.

*https://www.bqprime.com/opinion/indias-infrastructure-needs-broad-based-growth-of-private-investment

**https://www.business-standard.com/article/economy-policy/bs-number-wise-india-s-savings-don-t-help-govt-build-a-social-safety-net-122060701265_1.html

***https://economictimes.indiatimes.com/opinion/et-commentary/indias-investment-rate-declines-to-31-of-gdp-from-39-peak/articleshow/94231015.cms