No one can complain it has been a dull year for the economy. If it has emerged looking slightly punch drunk from a number of internal and external blows, the economy is nevertheless still in robust form. But that is not saying much because opportunities like those missed in 2000 may not occur again for a while. Certainly in the immediate future, during what looks like being a global economic slowdown, accelerating growth in India is going to get tougher, not easier. The high promise of January 2000 is hard to recall amidst the gnawing doubt of December. If there is one emblematic image from the early months it is the rise and rise of technology stocks which lifted all of Dalal Street, made ordinarily sober people into punters and nourished the illusion that the economy was on the fast track. The anticlimax came on the back of US Federal Bank chairman Alan Greenspan's successive interest rate hikes in a bid to slow the US economy. Whatever happens to infotech, the market has not lost its love of technology andeven now is looking for the next new thing. As the new economy seemed to run out of steam and the old one continued to sputter the Finance Minister's rosy estimates for GDP growth were finally and reluctantly revised downwards. Greenspan was not to blame here. Paradoxically, in a year when pundits and Bill Clinton were declaring India an information superpower, when the contribution of the services sector to GDP had reached proportions such as only advanced economies boast, two ghosts from the past, as it were, mocked our hopes of rapid growth. One was agriculture, the other OPEC. Truant rains have led to a lower, possibly even a negative growth rate in agriculture which still provides the livelihood of 70 per cent of the population. Bad news on the farm front has hit growth prospects in manufacturing and is reflected in lower growth expectations. By the second half of the year indications of a slowdown in industry plus the politics and price manipulations of oil-producing countries had altered a whole lot of calculations for the worse. Together theseblows left the strategy of low inflation with a stable rupee and high economic growth in some disarray. At year end, the rupee appears to be hardening after depreciating against the dollar but the rate of inflation is up and GDP growth may, at best, touch 6 per cent. It could have been worse; it ought to have been a lot better. The good news for the next year is policy clarity on some sectors like telecom and power. All the talk of building new roads and ports needs to be translated into action. The little said about improving the railways is ominous. Even worse is that there is nothing worth calling a strategy for agriculture, a fact highlighted by starvation in the midst of plenty. The new impetus for reforms must come from state governments but while some are going forward, others are paralysed by debt and still others are retreating into the past. A number of other uncertainties hang over the economy, chief among them are the ability of governments to make sizeable cuts in expenditure and move ahead on PSU privatisation. The rhetorical backtracking on reforms heard in the National Democratic Alliance and the Congress party alongside increasing protectionist sentiment in industry do not augur well for the future.
