We must brace ourselves for a difficult 2012, 2103

As solutions are sought, growth in lieu of austerity has become the new slogan. More than anything, we need to push the price of petroleum products to reasonable levels.

Published: 29th July 2012 12:48 AM  |   Last Updated: 29th July 2012 12:48 AM   |  A+A-

We have a new President. We wish him well; he will take a little time to adjust to his new life as things are very different in Rashtrapati Bhavan. We also have a brief respite from elections and politics, and I think the Vice-Presidential election will be a smooth affair. I think it is time for all of us to look at the economy and the weather. Being a part of global society means we must look over our shoulder and see the bigger picture as well.

Trade conditions are not good, and despite all the magic cures from a host of experts, Europe continues to slide. After Greece, it is the turn of Spain, and then we could have Italy or even France and Germany. The UK GDP shows a straight decline for the third month of 0.07 per cent, and words like recession and depression are being used for the grim situation. The US economy is slowing, as it must, for it cannot grow in isolation; both China and India have had a dramatic decline in GDP to 7.6 and 6.5 per cent respectively. As solutions are sought, growth in lieu of austerity has become the new slogan. Despite all the liquidity in the system, growth is missing. In very simplistic terms, we are spending more and earning less. We have to scale down our living standards. More than anything, we need to push the price of petroleum products to reasonable levels; it is absurd to see obscene profits being made by oil companies and a few nations at the expense of the world population. We are heading towards a conflict situation, and this will not come from the poor nations but from the developed nations. As an example look at the plight of Japan in the last six months and see what a declining growth rate and increased fuel costs have done to this highly developed economy.

We have to brace ourselves for a difficult 2012 and 2013. As we go along, the global picture will become clear, and unless global oil prices decline sharply, I see a very serious situation developing in the West where people have got used to living beyond their means. Unlike the past, it is no longer possible to acquire assets by the use of force. We have a competitive situation where technology is no longer a privilege of a few. The global economy is somewhat like the Titanic, and the only difference between now and then is that we have identified the looming danger well in advance, and hopefully will correct course in time to avoid a collision. We will see changes in government, with middle class values prevailing in Europe. I think US President Barack Obama will win by a mile; everyone needs a government identified with the majority of the population. The swing is away from conservative policies, and I think this trend will intensify in the future.

Among the decisive trends we have seen in recent days is the voting pattern in Andhra Pradesh which has 42 Lok Sabha seats. The Congress is in troubled waters in all three regions of the state. I am not surprised that the YSR Congress voted for Pranab Mukherjee despite this. Even the TRS and TDP abstained. Clearly, we have the possibility of a new alliance in the state. This will not be easy but it is a clear opportunity for the Congress.

The Trinamool Congress has drawn back from the brink and despite all the sabre-rattling on both sides, political logic indicates that the alliance will last. Elections are due in Tripura and the Left will be under pressure. The trends of 2004 have not been forgotten when the minority vote swung the pendulum in favour of the UPA; the caution was evident in the voting pattern of the JD(U), JD(S), TMC, SP, BSP, Left and even the Shiv Sena.

Politics does not run on emotions but on ground reality, and while the political fraternity is capable of very complex twists and turns, everyone will watch the trends on religion and caste besides the factors associated with ability and charisma. The BJP holds sway in states where the minority vote is limited, and most of these will go to elections in 2012 and 2013. I would tread with caution on predictions in the future. Only a step-by-step procedure is the sensible way to look at electoral issues in the future.

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Nehru is a former Union minister

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