If only words could save the patient.

A few days ago our Great Leader asserted fearlessly that the economy is going to grow at over 8%, secure in the knowledge that he will not be around to pick up the pieces when it tanks and will be able to pass on the blame to his successor, to global weakness or to the tooth fairy. Now his trusted lieutenant Mr Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission has charged in with his own prediction. " It will be reasonable to assume that the growth rate would be 7-8%, which I would call passing grade. I am reasonably confident that over this four-five year period, that is going to be the growth rate of the Indian economy," said he. ET, 11 March. Oh, wow! We are assuming a passing grade when all the figures are showing miserable failure. The calculations must have been done by government school teachers whose salaries have been increased to Rs 35,000 per month when private school teachers are getting half that amount. " If you take the 10-year period, the average ( economic ) growth comes out to be 7.5% and if you use the statistical method, it still comes out to be 7.4%. So, the conservative estimates based on the past ten years, indicated that Indian economy has demonstrated a capacity to grow at 7.4%," he opined. People think that economists are somewhat cuckoo at the best of times but even by their standards this is completely illogical. What happened in the past is no indication of what is going to happen in the future. The world is not static and events have a habit of suddenly catching everyone unawares. No one foresaw the east Asian crisis of 1998, the dot com crisis of 2001 and the sub-prime crisis of 2008. The growth of the past 10 years were due to very low interest rates in the west which led to a flood of cheap money leading to a strong rupee and an astronomical growth in property prices and in share prices. In 2007 the rupee was 39 to the dollar, oil was at $54 per barrel and inflation was at around 4%. The same Finance Minister, who is shamelessly boasting of somehow containing the fiscal deficit, wasted vast sums of money on social programs to win elections. Today interest rates are at zero percent in the west which is again leading to hot money increasing asset prices but the Consumer Price Index is at over 10%, oil is at around $95 per barrel and the rupee is flirting with 55 to the dollar. On 8 March the RBI Governor, D Subbarao told bankers that the government does not have the fiscal capacity to continue with entitlements and welfare programmes at the current level. TOI, 11 March. " Key to our collective national aspiration for sustained high economic growth is low steady inflation," he said. Will the Congress cut social spending before elections in 2014? And commit electoral suicide? Our politicians are not known for patriotism.  As long as they do not bore us with words.