2 min read.Updated: 21 Jan 2021, 11:10 PM ISTLivemint
India’s shift from a mixed to a market economy was an idea whose time came 30 years ago, but the falsehoods that fill echo chambers online have got in the way of progress. Let’s fix this
Back in the day, or on 24 July 1991 to be precise, there was no social media to capture, discuss and forward memes of the raptures that BSE’s Jeejeebhoy Towers was sent into by the budget speech of then finance minister Manmohan Singh. India had opened up its economy to foreign capital and domestic competition, and his audibility on TV screens was soon drowned in roars of euphoria under that stock market’s canopy. The most resonant part of the speech had already been voiced: “As Victor Hugo once said, ‘No power on earth can stop an idea whose time has come’ ... the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail." Shorn of rhetoric, the actual idea was to move from a mixed to a market economy, a shift prompted by a dollar crunch but urged by the evident-by-then collapse of Soviet command-and-control. Business exposure to rivalry had a visible impact on various markets, our allocative efficiency rose, we found ourselves better off, and reforms quickly gained wide approval. Policy squabbles over welfare versus market forces may have slowed further market-orientation, but our liberalization thrust has acquitted itself well. Our software story, for example, has clearly been one of global success, and a reason why India is fairly well poised today as we pivot to a cyberworld.
The past half decade under the Narendra Modi government has seen our lowering of entry barriers complemented by an exit policy for businesses, even as revisions of our taxation and monetary policies got a welcome impetus. Debates on the rationale of these stayed mostly within rarefied circles of policy wonks, though, which insulated them from a trend that has defined this period: the emergence of ‘post-truth’ as a force. Picked by Oxford Dictionaries as its ‘word of the year’ for 2016, this adjective “denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief" is apt for an era in which lies and demagoguery can go viral and attain an almost hypnotic sway over our online multitudes. While the ravages of a real-world virus could yet revive demand for scientific truth on social media platforms, post-truth chatter has begun to take a toll on reform efforts farther afield.
Farmer protests have forced the government to suspend a policy of lifting restrictions to let private investment and market mechanisms play a major role in our farm sector. This resistance was stoked by echo-chamber fears on social media of predatory corporations being given a free rein to swindle farmers, take over their farms, and deprive them of their livelihood. With economic theory not easy for all to grasp, post-truth portrayals of the Centre’s agrarian agenda have suffused online forums. It has not squeezed out all space for talks, but it has made complex issues harder to take up. The peculiarities of agriculture, for instance, deserve to be analysed. The sector has not yet rid itself of feudal vestiges, primary sellers vastly outnumber direct buyers, and supply is seasonal while demand is inelastic. This does not mean that the classic market device of price signals acting to get demand and supply in sync will fail to work, only that we need a special safety net crafted for farmers to fall back upon in case of failure. But first, let’s accept that we can’t prevail if the truth doesn’t.