Unbudgeting India

Now that the emotions on the Indian budget, other general Acts by the Indian Parliament and other policy measures have subsided here are a few thoughts. Let's start by assimilating the chart below.

Source: Peter Thiel; Zero to One (2014))

 First let me explain the variables. The savings and investment are quantitative and are easy to understand. The other two dimensions, Definite/Indefinite and Optimistic/Pessimistic are qualitative. How do we understand these? 

   

     We can perhaps label Optimism/Pessimism as a proxy for opportunities available and “risk appetite” in business terms. Similarly, we can think of Definiteness and Indefiniteness as  another time scale variable. 

                 

    These qualitative variable are highly correlated to and/or caused by cultural factors like societal framework, external environment, public behaviour, etc. Basically, these are characteristics that define attitudes and societal outlook. With these definitions, we can verbalise the chart as:

•   US is currently “indefinitely optimistic” given the quantum of its resources, talent, workforce, power, world dominance, etc. However, it's low on both savings and investments 
•      Contrary to this is the EU which is “indefinitely pessimistic” given its aged or ageing population, domestic unrest, lack of workforce, disrespecting world, etc. In the words of the legendary Sir Humphrey Appleby, "The bureaucracy is what has got Great Britain to where she's today". No, nobody can challenge this visionary statement in the year of their lords and ladies, 2020 of the C.E.
•     China is expected to move into one of the other quadrants over time, notwithstanding the current epidemic. 

This world view is broadly in sync with our perceptions. With this understanding, let’s proceed to assess India.

First, where does India stand on each of these metrics? Also, does India fit into any of these quadrants?
We are:  
High on savings

Low-Middle in Investment terms. This is reflective of our Forex reserves and our investments outside India. Very few Indian companies have good quality (high returns' yielding) investments abroad.
Highly Pessimistic about ourselves, but meandering towards "not so Pessimistic" in recent years. Note that the no. of times we hear "Nothing can ever work in this country" has reduced in the recent years.

"Indefinite" at least for the next ~40 years. Current median population age is ~28 and is expected to touch ~45 by 2060. So, a healthy but unskilled workforce.

     So currently, we do not fit into any of these quadrants.

Second, as Indians do we want to fit into any of these quadrants?

In spite of all the chaos and confusion occupying our minds, one thing we'll all simply agree on is: No, we don't

Now, I do hear a few "Why not the upper right quadrant, just like the US in current times?" 

Well, our core family and society structure thankfully remains feminine in character. This, in spite of the the 1,000+ (~800 + ~200 + ~70) years' of violent socio-economic, cultural, political and legal terror unleashed upon the Indian society by vested interests. So, I'll leave it to the torchbearers of our family system to explain what happens to a society that's low on savings and investments but indefinitely optimistic. Also, let them decide if they want such a family/society.

Finally, if we don't want to be in any of these, what state do we want to be in?

Perhaps, High on investments and savings. And Indefinitely optimistic? This is just not within this paradigm.

The path to such a goal goes way beyond simple budgets, economic policies and Parliamentary Acts. In fact it goes way beyond governments and their actions. So, we may want to assess all societal leanings, external influences and environment, government actions, policy measures (fin and otherwise), etc. with this broad theme. 

Also, this may not even be the only paradigm but just a good starting point. So, until the next chaos is unleashed, Happy Outraging.