Pathankot Attack: Pakistan As Distraction

Instead of going on a wild goose chase for peace with a prickly neighbour, India would be better off focusing squarely on economic growth.

- Nitin Pai

Few will disagree that putting India on a path of sustained high economic growth is New Delhi’s most important policy objective. Economic growth is the best known method to extract millions out of poverty and put them on the march to prosperity. This is what we learn from Europe, the United States, East Asia and China over the last 300 years. This is also what we know from our own albeit reluctant, apologetic and meandering—experience of the past two decades.

A compelling explanation for Narendra Modi’s remarkable ride to power in the 2014 General Election is the promise that his government will deliver on Middle India’s aspirations for growth, prosperity and transformation. More than efficiency improvements, limiting high-level corruption and big government programmes to spur investment and employment, the economic growth imperative demands that the direction of the ship of state be set towards greater liberalisation and deregulation: from fixing the banking system, to divesting moribund public sector enterprises, to liberalising education, health, labour and land.

One would presume that the favourable global economy, with low prices of commodities and capital, would lead the Modi Government to use it as an opportunity to launch the biggest reforms the country has ever seen. This has not happened thus far, but there is time yet.

None of this has much to do with Pakistan. Our troubled neighbour is, at worst, a risk that needs to be managed. Indeed, one of the best ways to manage the risk Pakistan poses is to grow the economy quickly. A richer India will have a lot more resources, capabilities and friends, which will make it progressively easier to handle the trouble Pakistan can make.