by Sushant Sareen

The latest GDP growth number of 4.5% has set alarm bells ringing in the corridors of power. Although officials are putting up a brave face and insisting that the economic downturn has bottomed out, there is very little to suggest that this is indeed the case. The economic and political fallout of the sharp fall in economic growth will of course manifest itself in the weeks and months ahead. But an anaemic economy also has a major foreign and security policy dimension that has not as yet received adequate attention. The bottom line is that a weak economy exposes India to external pulls and pressures. Worse, it makes India vulnerable to adventurism from adversaries because paucity of resources impacts on defence preparedness and modernisation.

The warning signals about the economy being on a downward trajectory have been flashing for some years now. But instead of taking corrective action, the negative trends looming over the Indian economy were met by denial. Even though anecdotal evidence suggested that business was down, industrial production was going negative, people were being laid off and growth was falling, people in government would fling fancy numbers in the face of those who were pointing out that the economy was sliding. For some time, even though the growth number had fallen from over 8% to around 7%, India could boast that not only was it the fastest growing large economy in the world, it was also growing faster than China. But it is no longer possible to claim that things are not as bleak as they were being made out to be.

Apart from there being an aversion within the governing party’s camp to paying any heed to bearers of bad news on the economic front, the denial that there was a problem in the economy was prompted by the fact that the party kept winning one election after another, even sweeping the general election early this year with an enhanced mandate. This was seen as an emphatic endorsement by the people of its economic policies. After all, if the economy was doing as badly as was being made out by the critics, then surely the electorate wouldn’t be voting for the party. But the growth number of 4.5% is a scathing statement that lays bare the trajectory of the economy.

Coming as it does at a time when foreign and security policy challenges are multiplying, and the strategic environment around India is in a flux, the national security implications of the economic downturn are even more serious than they would be had things been more stable in the immediate and extended neighbourhood. Many of the path breaking decisions and initiatives in the domain of foreign and security policy taken by the Narendra Modi government were predicated on a robust economy. From the constitutional changes in Jammu and Kashmir to the assertive, even aggressive, policy towards terrorism emanating from Pakistan, from presenting India as a net security provider in the region to making common cause with countries like the United States in the Indo-Pacific, from standing up to China’s intrusions along the borders to engaging with neighbours like Bangladesh, Maldives and Sri Lanka to protect India’s interests, the Modi government has been pushing the envelope because of the confidence that a strong Indian economy lends to his outreach.

But the proactive foreign and security policy will become untenable and unsustainable if the Indian economy is on the downswing. The difference between growing at over 8% and growing at just over 4% is that it not only impinges on India’s ability to win friends and influence people, but that it also emboldens even two-bit countries like Malaysia and Turkey, not to mention some European busybodies, to interfere and comment on matters of core interest to India – Jammu and Kashmir, for example. If India grows at 8% and above, many of these countries would not dare to offer gratuitous advice to India.

More importantly, at just over 4% growth, the government just won’t have the resources required to modernise and equip the armed forces and give them the teeth to implement policies and protect the national interests of India. Nor will India have the wherewithal to not only project power but conduct out-of-area operations along with its allies and partners. Unlike the 1970s, when India had a benefactor in the erstwhile Soviet Union which took care of our defence needs at bargain basement prices, India today has to arm itself by paying top dollar to purchase equipment.

Over the last many years, the criminal neglect of defence modernisation has led to obsolescence of many critical weapon systems. Today, when new threats are manifesting, the fund crunch will force the government to postpone some of the acquisitions that are desperately needed. The choice before the government will be to fund its social welfare schemes (which bring it votes) or build its defence sinews. This dilemma would be much less onerous if the economy was growing at 8% or 10%, because then there would be funds for both. What is more, an economy growing at 8%-10% would in the natural course start to acquire, and eventually develop, skills and technology that would allow for indigenous defence systems, more so if the government is able to successfully implement the Make in India programme in the defence sector. Tragically, this flagship programme of the Modi government has been flagging ever since it was announced.

At a time when India’s security challenges are multiplying, and new threats emerging (including the growing Chinese presence in the Indian Ocean region), India desperately needs to up its level of preparedness, acquire the weapons platforms and make up for the critical shortages in a range of weapon systems that would allow it to take care of the threats it foresees. None of this will be possible if the economy doesn’t start galloping soon because the already yawning power differential between India and China would become even more insurmountable. Forget China, even the power differential against Pakistan has been steadily declining, and India no longer enjoys the sort of superiority it did a decade or two ago.

Apart from adequate and appropriate defence equipment, the government also lacks the resources to fix things like the moribund education system that is just not tuned to meeting the requirements of the fourth Industrial Revolution, which has its own long-term security implications. And, of course, there is the whole issue of things like energy security and security of trade routes that get dovetailed with the larger national security imperatives confronting the Indian state.

The government has got enough warning, and now the alarm bells are ringing. If under the influence of voodoo economists and for reasons of some hoary, antediluvian ideological fixations of the Swadeshi Jagran Manch variety, the government doesn’t undertake sweeping reform and put the economy on a high-growth trajectory, India will miss the boat once again and will be made to pay a very heavy price, by its enemies as well as its “friends”.