Political paralysis led economic crisis

India’s Growth story can be compared to the Bharatyanatyam dance, a popular dance form in South India; for every two step the dancer takes, she retreats two steps backwards and is in the maiden point. India is suggested as one of the growing economies of the world which is expected to hit the top by 2030. 2011-12 was a year of economic upheavals and surprises. The growth rate plummeted. Manufacturing growth touched negative growth during Oct 2011. Import between April-Nov 2011 was $ 309.53 bn(Rs 14,35,304.79 Cr) against $ 231.66 bn(Rs 10,85,780 Cr), an increase of 30.24%(in $ terms) and 32.19%(in Rupee terms) Year-on-Year. Similarly, Exports during the same period touched $ 192.69 bn (Rs 8, 93,094.16 Cr) against $ 144.66 bn(Rs 661,055.88 Cr) in the same period2010, with a growth Year-on-Year at 33.21(dollar terms) & 35.10 %(in Rupee terms). The world growth was perhaps obstreperous. Political paralysis seen in United States and Europe as governments are at an inflection point. Shaky Europe tries to muddle thro’ uncertain of which path to take, and takes the uncertain path. Government in Greece, Italy, and Spain have collapsed or voted out. In Russia and France, problems persist. Tea Party movement in United States, occupy Wall Street (especially Manhatten Zucasthi Park civil disobedience programme), Arab Spring, Tahir Sq protests, fall of dictatorship in Libya, Egypt and other countries, Greece and Ireland trying to get emergency loans, show popular expression of breakdown of Trust. Growing wealth inequality, protest against greed, lukewarm legal recourse against closed banks and bankers for their demure and financial mess, have created a deficit trust and political gridlock. Niall Ferguson, a prominent Economic historian at Harvard felt that ‘for the better part of 500 years, it was the western in both sides of the Atlantic who could say they had the best economic system, best political organizational structure, and so forth. These claims have increasingly become hallow.’ John Maynard Keynes must be laughing in his grave. Everywhere, cutting spending during slump worsens the slump. Spending cuts saw further erosion in consumer business confidence, increased unemployment, and reduced growth. Like Indian political elite, obsessed over short term deficits, considered it as an actual problem, and in trying to ease the process, created the real problem- a depressed economy, mass unemployment and lower economic growth. In India, regulatory crisis, policy paralysis, divided coalition of parties, both in the Ruling and opposition political parties, ambitious regional satraps who want to carve a place for themselves, uncontested competition between states. Prime Minister calls an ally Chief Minister who refuses to come. After voting with the Government, opposing the same Bill in the other house, what Policy reform is possible. It only causes erosion of Prime Minister’s powers. The Prime Minister of India cannot act like Aristotle in Lyceum! India develops on their critical manpower talents- the service sector. That is the economic potential that needs to be managed to create capital. Pressure for Reforms arise when capital moves or labour moves. In India, both Capital and labour move. The credibility of Political system looks compromised, because of Coalition politics. Will parties become disciplined; otherwise, lawmaking Politics and contagion will drive the underperforming economy to the oblivion.