2014: The year of a rise, and a fall

For a reviewer looking for interesting happenings, 2014 was a reasonably good year.

After the last big one in 2008 when several of us were busy predicting the imminent demise of capitalism, the subsequent years were so humdrum. I would rather sit through the pompous and horribly boring panel discussions at our literary and film melas than read a review of those years.

But this year was different. Not quite the throb of imminent danger as in 2008, but kinder to the mind and spirit than reading another Chetan Bhagat set piece.  Or the industrious efforts of several others who aim to become the next Chetan Bhagat.

This year a remarkable but largely unknown Indian won the Nobel Peace Prize, for dedicating his life to a most humane cause that many of us don't notice, because it is so ubiquitous. India sent a spacecraft all the way to Mars, at a budget that won't buy a new commercial airplane. Online kiranawallahs barely old enough to grow moustaches became paper billionaires.

Then a billionaire who promised good times to all finally bit the dust and lenders lined up at his door. Three Hindi movies brought in over Rs200 crore in revenues each, and the latest hit is threatening to break last year's record of Rs500 crore. Even the Indian test team has started showing some fight, though the results are not very different from recent years.

But this year won't be remembered for any of these. Not many would readily recollect these people, events and achievements even a few years from now.

As we sight new landmarks in future, the older ones will be forgotten quicker than Manmohan Singh.

Yes, he was our prime minister at the start of this year. It didn't take our television crusaders and newspaper editors more than a few days after the election to erase him from the collective public memory. On the rare occasions we care to remember him, it is to poke fun of his eloquent silence. Which is of course very insensitive, considering his immense service to the nation. 

This year will be remembered for two things. First, The rise of Narendra Modi that is transforming politics in this country, in ways few of us had thought possible. Second, the precipitous fall in oil prices that could not have happened at a better time for our economy.

At the beginning of this year, veteran journalists who have lived several election cycles readily scoffed at suggestions that the BJP and Modi could get close to a majority. The party is still weak in the Cow Belt and not many in the South like Modi. There was no way the BJP could go past 250 seats, the pundits confidently prophesied.

Then, suddenly, a phenomenon well known to stock market punters took over. Momentum – the gravity defying force that could kill the pessimists and take stock prices soaring, sometimes for no apparent reason. In political reporting, momentum is more imaginatively described as a wave. A Modi Wave swept through most of the country this year and the rest, as they always say, is history.

The ardent Modi fans who still expect him to reshape the country into another Gujarat, which we all know produces a lot of milk, though data about the state's honey output is less known, will be disappointed. So will those of us who believe Mod's chappan inch broad chest will shield us from our many enemies.

Instead, despite all his communal baggage and other limitations, the ascent of Modi restores the idea of a leader who is above the mundane. Modi is not quite inspirational, despite his nearly incredible life story.  Still he has an aura, even if parts of it are cultivated and brushed up. He has risen above the scores of regional chieftains who claim to be national leaders, and who seem only interested in imposing their progressively undeserving offspring on the people.  He is the first leader in nearly three decades who can claim national acceptance, is widely respected, and is evidently feared by political foes.

In a country that still reverentially addresses third and fourth generation descendants of former royals as Maharajas and Maharanis, ignoring a law that prohibits such titles, the idea of an emperor of our own is still an endearing one.

Modi is that citizen emperor now. What he does with the power in his hands will fill the rest of his life story, and inevitably, the course of India's political and economic development for the next several years.

Making Modi's task easier is the year's second noteworthy event, the precipitous fall in international oil prices. Even more unexpected than Modi's rise, the oil crash of 2014 will be calamitous for the oil exporters but a blessing to importers like India. By most reckoning, economic growth rate in India bottomed out during the first half of this year. If global economic trends had remained unchanged, with below par US growth and weak trends in Europe as well as Japan, India's recovery would have been slow paced and possibly uneven. Cheap oil changes that for better, possibly in a big way.

The benefits of cheap oil are manifold, especially in a country like India that imports nearly two-thirds of its energy requirements. Petrol and diesel retail prices are already at the lowest in several years, and will gradually percolate down through the farming and industrial supply chains. This will potentially boost consumer spending and expand industrial margins. Despite his public caution, RBI's Raghuram Rajan is getting ready to cut interest rates, sooner than later.

We used to call P Chidambaram one of the luckiest finance ministers. Whenever he faced a crisis as finance minister, external factors generally moved in his favour and made his life easier. If oil prices remain low for the next few years, that mantle should go to Arun Jaitley.  He is part of a government with a strong political mandate, which Chidambaram lacked as finance minister, and now some of the other chips are falling in Jaitely's favour.

Low oil prices could cut the central government's subsidy bill for 2015-16 by more than Rs60,000 crores. Without any pressure to increase welfare spending in the form of loan waivers and rural jobs program, Jaitely will find it a lot easier to meet fiscal deficit targets.

Two significant events, one political and the other economic, should mark 2014 as an interesting year. If the gains from these two events are used with diligence and vision, this year could well be remembered as remarkable.