India’s prosperous future has hardly ever seemed farther away than it does today. The country’s ongoing economic crisis has darkened the atmosphere -- and done so in a way tragically familiar to most Indians. There is a feeling of déjà vu among the public, a creeping sense that the country is adrift and sliding back to the economic, political, and cultural dysfunctions of its very recent past; Indians are beginning to doubt that their country has such a bright future after all. And as long as that remains the case, India’s vast potential will remain just that.
It wasn’t so long ago that Indians were saddled with an economic system that imposed on them burdensome regulations and an opaque system of pricing, as well as a political system that failed to guarantee their civil rights and restricted their freedom of expression. For most of India’s history, the state and the public harbored mutual suspicions about each other’s intentions -- a dynamic that would periodically worsen during economic crises. Indians often doubted their government’s ability to master whatever crisis the country was presently struggling with, and they acted accordingly.
Consider the Gold Control Act, a 1962 law that banned trading gold and required Indians to notify the government of their gold holdings. Gold has long played an outsized role in the Indian economy -- Indians acquired over 14 percent of all gold produced globally between 1493 and 1930. In the face of massive foreign debt in the early 1960s, the Gold Control Act was designed to prevent capital flight.
But the policy only motivated Indians to trade gold more frantically on the black market, within India and abroad. The New York Times reported at the time that “a handful of smugglers” dominated the trade; the paper estimated that only one in every eight “gold boats” -- illegal shipments that left Dubai for India’s western coast -- was intercepted by Indian authorities. In later years, when the Indian
Loading, please wait...