The startling discovery based on various metrics of\nmeasuring the actual growth of the Indian economy between 2011-12 and 2016-17\nclearly states the fact that India did not grow at 7% per year as the citizens\nwere officially informed. Instead, the average annual growth crawled at a\nridiculously small 4.5%, on an average, during those 5 years. <\/p>\n\n\n\n
The situation that India\u2019s economy dragged itself into,\nhas taken me 18 years back to the12th of April 2002 when the record-breaking\nfranchise had just set its foot into every single bookstore in the world: Harry\nPotter and the Philosopher\u2019s Stone. Being an ardent believer in witchcraft and\nwizardry, the sequence in which the \u2018magic-bricks\u2019 of the story piled up one\nafter another with a perplexing turn of events, spared me very little time to\nget mesmerized through reality. Needless to say, there have been innumerable\nsleepless nights with me staring at the sky and contemplating Joanne Rowling\u2019s\nworld beyond the clouds.<\/p>\n\n\n\n
However, the crystal of doubt started polishing itself\nwith every birthday of mine that passed, and I got to witness the clearer\npicture within. The surprising fact isn\u2019t in what I witnessed, but what I\ninterpreted it to be and how relatable it seemed to my developing nation. So,\nlet\u2019s sit back and try to keep today\u2019s economy in our heads as we proceed with\nthe story henceforth.<\/p>\n\n\n\n
The world described in the Harry Potter series is one\nwhere the economy is stagnant, the government is an effective police state, and\nthe education system is in urgent need of major reform.<\/p>\n\n\n\n
Despite the magic, fundamental economics still applies in\nthe wizardry world. A flip through one of the seven wonders of the Potter\nseries will clearly project how far it is from the so-called utopian dream.\nMoney and price system still exist, society is not overflowing with riches and\nthe witches and wizards are bestowed with the same financial difficulties as\ntheir muggle counterparts. While magic can transfigure and alter objects in\nnumerous ways, there still prevail certain natural laws that clearly project\nhow you can\u2019t just conjure money or food out of thin air. <\/p>\n\n\n\n
There appears to be virtually zero encouragement for\nfurther innovation. Almost all businesses and firms in the magical world are\nextremely well established: Olivanders, the wand shop first opened in 382 BC.\nBusiness churn only seems to occur in the middle of a panic, such as that\ncaused by the return and a resulting terror campaign of Lord Voldemort in the\nmid-1990s. A world as hierarchical and prejudiced as the one Harry resides in \u2014\nwhere most rich wizards such as the Malfoys look down on those less fortunate\nthan themselves \u2014 clearly does not encourage innovation, growth and social\nmobility.<\/p>\n\n\n\n
But hold on, it\u2019s not only the financial system where\ncompetition lacks. Every industry in the wizarding economy is highly\nconcentrated. One reason for that undoubtedly boils down from the excessive\nregulation and bureaucracy. Such regulations drive up the costs of production\nand increase the barriers to entry for challenger firms.<\/p>\n\n\n\n
Foreign producers and international trade are eager to\nprovide competition, but heavy government regulation appears to stop this:\nIn The Goblet of Fire<\/em> we learn that ministry regulations\nprevent the importing of flying carpets, which could compete with broomsticks\nas a mode of personal transportation. The reason for the ban is that flying\ncarpets are classified as a Muggle object, yet the fact they can fly clearly\nmakes this ban absurd and is obviously an example of the government trying to\nprotect domestic producers at the expense of consumers.<\/p>\n\n\n\n It is well established that increasing human capital and\nexpanding the frontiers of knowledge are among the key ingredients for economic\ngrowth. A good education system is crucial for enabling this. Unfortunately, in\nthe magical world, schooling is generally very poor. There is virtually no\nteaching of theory, and creativity is not encouraged, which is why Hermione is\na model student, even though Fred and George arguably contribute far more to\nwizarding society through their innovations and entrepreneurship. <\/p>\n\n\n\n But by far the biggest issue in the world that Harry\nPotter inhabits is the role and influence of the Ministry of Magic. This has\nimmense and arbitrary powers, which it uses to control and regulate most\nactivities in the magical world. Worryingly the concepts of checks and balances\nor separation of powers doesn\u2019t seem to exist: The Ministry functions as executive,\nlegislator, and judiciary<\/strong>. A free press would have helped expose the\npervasive incompetence and corruption of the Ministry of Magic. Unfortunately,\nthe Daily Prophet<\/em>, which is the primary media source of news for\nthe magical world, effectively acts as the propaganda arm of the Ministry of\nMagic: the paper and the Ministry are closely connected, and stories and news\nare often altered to have a more pro-Ministry slant.<\/p>\n\n\n\n Now, let\u2019s keep this picture in the background while we\nreview the growth numbers of today\u2019s India.<\/p>\n\n\n\n To begin with, there are two important points necessary\nin justifying the fallacy in these numbers. One, former CEA, Dr. Arvind\nSubramanian uses 17 key factors in his latest paper, including two-wheeler,\ntractor and truck sales, electricity consumption, manufacturing numbers, rail\nfreight and so on, as proxies to measure overall growth. His findings state\nthat before 2011, most of these stated factors, to be specific, manufacturing\nproduction and exports, moved in tandem with overall growth. Thereafter, for no\nexplained reason, manufacturing growth raced ahead, dragging the GDP growth\nupward; sounds exactly like magic<\/strong>. There lies zilch doubt\nin the fact that manufacturing was indeed the main culprit, but other sectors\nfollowed the trail too. Second, the data showed that India\u2019s growth was measured\nagainst an average of 7.1% in which all the other nations were approximately\ngrowing. Thereafter, compared to all those nations, India was rising ahead.\nThis sounds very similar to the story of locating a needle on the surface of\nMars- without a telescope; again magic<\/strong>.<\/p>\n\n\n\n His paper undoubtedly serves zero political motive. It is\nnon-adherent, in the sense that, it covers data during both UPA and NDA\nperiods. Hence, the errors that have crept into our macroeconomic numbers are\nsystemic, not driven by any political directive. <\/p>\n\n\n\n Now, what could have been the circumstances or rather,\nchances in which this could have happened? The answer is, low. Let\u2019s assume,\nfor simplicity\u2019s sake, that the years after 2010, when the global economic\ncrisis was hitting our shores, the government might have needed to do this to\nkeep the global credit ratings high, lower borrowing costs, keep inward\ninvestment flowing and so on. Even then, the probability of this occurring in\nour chaotic bureaucracy is considerably low. <\/p>\n\n\n\n Hence imagine, what could have exactly\nbeen done had the government projected the actual data? What could have been\nsaved if the media houses portrayed news exactly as they were and not as they\nshould be? How far would have the low-hanging social indicator of Education\nimproved if history wouldn\u2019t have been meddled with? What would have been the\ndelta of higher development achieved if we spent the very similar amount of\ntime improving Health instead of replacing City-Names?<\/strong><\/p>\n\n\n\n Let me provide you an answer to one of them, if the\npolicymakers had been informed of the actual number of 4.5% instead of 7%, then\nthey would have stopped rejoicing about effective economic management and\ninstead, invested a few more hours in reform. This is insanely obvious. For\ninstance, if a patient with cancer is diagnosed as suffering from common cold,\nthe chances of survival will fall dramatically. In fact, at least part of the\npolicy paralysis of the Narendra Modi regime between 2014 and 2019 can be\nattributed to the self-satisfaction fed in, not by the data of the Indian\nEconomy but what can best be described as the one from the Harry Potter\neconomy. <\/p>\n\n\n\n It is long overdue that the process of the extensively\nwidescale institutional and economic reform begins so that our motherland drags\nherself out of this over-engulfing mammoth named Crisis.<\/p>\n","protected":false},"excerpt":{"rendered":" Despite the magic, fundamental economics still applies in the wizardry world. A flip through one of the seven wonders of the Potter series will clearly project how far it is from the so-called utopian dream.<\/p>\n","protected":false},"author":23,"featured_media":78798,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[3],"tags":[178,252,258],"class_list":["post-78797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indian-economy","tag-economic-growth","tag-economic-slowdown","tag-harry-potter-and-economic-growth-in-india"],"yoast_head":"\n