Lately, my WhatsApp has been abuzz with activity. There have been lot of constructive discussions. After Prime Minister Narendra Modi’s Independence Day speech (where he outlined plan to make India $5 Trillion economy), there was a WhatsApp discussion on this subject. One of the point of view – why is Indian Government seeking external world’s approval of her progress.

Economic activity and growth are corner stones of any policy for every country. Essentially there are variety of things that make a country powerful. Military strength, Economic Power, Cultural and Historical weightage, and Geopolitical location are few of the factors. The last 2 (Cultural and Historical weightage, and Geopolitical location) are indications of soft power. They would buy a sit at “big boy” table but doesn’t always guarantee a winning hand.

Military Power has its strength. However after a certain point, it doesn’t help you much. The real power that world recognizes is Economic Power. That’s the harsh reality and truth. Vijay Kelkar as head of 13th Finance Commission offered an interesting suggestion to Government of India. He had recommended that Government should ensure there is rapid GDP growth. Annual GDP growth of 10% is the best foreign policy tool (this concept is also known as Kelakar Doctrine).

You don’t have to look too far to see how Kelkar Doctrine works. Let’s look at top 7 economies in the world based on 2019 GDP data. US is at the top, China is second, then Japan, Germany, India, UK and France make top 7. Had events in Hong Kong over last few weeks happened in some other country (which is not 2nd largest economy in world), there would have been much more global scrutiny and condemnation for sure. Similarly had any country other than US and UK invaded Iraq in 2005, there would at least slap on wrist by UN if not sanctions.

Kelakar doctrine is also very relevant in India’s history over last 30 odd years. Due to years of successive socialist Governments, India was on verge of economic collapse in 1990s. This forced then Prime Minister PV Narasimha Rao to launch unprecedented Economic Reforms and open up economy. Due to years of socialism, till about 1994 – 1995, Pakistan’s per capita income was higher than India. In backdrop of this lacklustre economic performance, no powerful country was on India’s side for vital issues. When India conducted Nuclear Tests there were American sanctions (at this point ISI and CIA were BFF).

Today’s situation is completely opposite. After Article 370 was abolished, Pakistan (which is on verge of economic collapse) finds itself with no allies. All the powerful counties have declared (rightly) that Jammu and Kashmir is India’s internal matter and they would not interfere with it. Pakistan even went to its trusted friend Saudi Arabia and OIC (Organization of Islamic Cooperation). Days after Government of India’s announcement, Saudi owned Armaco invested to buy a 20% stake in one of corporate India’s biggest deal. Other members have OIC have agreed to maintain strong relations with India and continue to build cooperation as it’s in their own interest.

PS – In last few days in our WhatsApp group there has been lot of discussion about “economic slowdown”, hope to write another post about it soon…


2 Comments

Umakant Barhale · August 31, 2019 at 4:38 pm

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