Return of bad ideas & missing reformers

There are three perfectly timed triggers for this week's column: Old, povertarian instincts are back; the steel industry lobbying for more import duties; and the absence of reformers like A D Shroff

- SHEKHAR GUPTA

There are three perfectly timed triggers for this week's National Interest. First, the easy virality of a social media post mixing up India's gross domestic product (GDP) with the wealth (as determined by market capitalization) of its billionaires and talking about how it exposes the stark inequalities in our society.

Some really, really smart people fell for it. All good people, after all, have their hearts in the right place. India's inequalities are deep, wide, and in many ways getting worse. So, what is the argument?

It is just that GDP is the sum of all national income in a year, whereas wealth is what you've saved up and built over your past incomes, the market value or capitalization of your equity holdings and your assets. Wealth is not income and vice versa.

The total capitalization of Indian markets, closing in on $6 trillion, is way more than the country's GDP. Ambani, Adani, Birla, Tata, and all of India's billionaires will draw their wealth mostly from it. Most of the rest of us 1.42 billion will contribute a humble share to the GDP.

How could a mythology like this, however romantic, find such currency 33 years after the 1991 reforms? This gives us the first trigger: That old, povertarian instincts are back, assailing the hearts and minds of the smartest.

The second is the steel industry doubling down on lobbying for even more duties on imports, making India's steel among the most expensive anywhere. The price is paid by the domestic user—you and me—who builds homes and buys automobiles; it's passed on to the gig worker's scooty, the farmer's tractor or plough, the kadhai (wok) and humble chamcha (spoon) in your kitchen. This, when micro, small, and medium enterprises are crying about steel prices driving them to bankruptcy, and when the bigger "boys," the automakers, whisper to you—looking left and right to make sure nobody is watching—about shipping containers sitting in our ports forever, awaiting clearance.