The Indian Premier League (IPL) of Cricket, the country's biggest and most expensive entertainment tamasha, is given millions of dollars from the Reserve Bank's (RBI) depleting dollar reserves due to rising trade gap and current account deficits so that the show goes on. Thanks to RBI's liberal foreign exchange disbursement rules, global tour operators and international airlines are becoming increasingly dependent on India's cash-rich fun-seekers who are travelling like never before. The on-going economic reform since 1992 has made it possible.

Is India going the way Argentina went through the best part of the 20th century? In the 19th century, Argentina had shown the same promise as the United States of America (USA) to emerge as a global economic powerhouse. The 19th century was the century of Europe, led by the United Kingdom, France, Germany, Spain, Italy and Portugal. The USA and Argentina were branded as 'emerging economies'. Both were very strong in agriculture. Immigrants from Europe drove both the economies. The indomitable Anglo-Saxon spirit of enterprise guided the economic destiny of the USA. Argentina's economic future was in the hands of more short-sighted lazy immigrants of Spanish, Italian and Irish origin. While the US government was more democratic and welfare-oriented towards labour and the common man, the argentine government sang to the tune of a handful of Agricultural and business barons until Peronism came to its temporary rescue. Towards the end of the 20th century, Argentina became the world's biggest indebted country and a failed economy. The USA emerged as a global leader and continued to remain so until the trillion-dollar Iraq war, followed by the bank collapse during the first decade of the 21st century. Is India's present economic bubble real? Is India living on borrowed wealth, borrowed time, borrowed knowledge and self-glory?

The latest reports suggest that India is already among the world's biggest borrowers of public funds. The central and state government debts now account for 82 per cent of the country's GDP (gross domestic product). In the case of Greece, the economy of which has now collapsed and waiting to be rescued by the European Union (EU) administration, the government debt accounts for 120 per cent of its GDP. The prominent among the other highly indebted economies are the UK and the USA. The UK's public debt represents 57.5 per cent of its GDP. Pound Sterling, its currency which the UK government held solemnly against the demand for its merger with Euro, is sinking under the pressure of public debt and large budget deficits. The USA, the world's largest economy, too is under severe pressure from its public debt burden. The US government debt, fuelled by the cost of Iraq war and the rescue package to prevent the collapse of its top investment banks and auto companies, accounts for 55 per cent of its GDP. Both the UK and the USA are trying their best to ensure monetary discipline and improve their financial health without bringing any further adverse impact on their respective GDP. The main concern of the critics of President Obama's universal healthcare legislation, which guarantees health insurance to even those Americans (some 32 million) who can't afford it, is its impact on the government expenditure, future budget deficits and borrowings.

Wisdom, hard work and national pride on the part of both the government and individuals are absolutely necessary to build an economy. The economic history of the world has all the examples of how economies were built and destroyed. The industrial revolution in the UK and the Continent, the emergence of economies in the USA and Argentina through the 18th and 19th centuries under a somewhat colonial shadow, the pre-eminent position of the USA in the second part of the 19th and the whole of 20th century, the rise of Japan, China and South Korea in the 20th century all show the positive result of the combined impact of wisdom, hard work and national pride on these economies. China, which would appear to be the world's best managed economy sitting pretty on a trillion-dollar foreign exchange reserve earned mostly through exports and still growing despite the global economic slowdown, is also the least borrowed among the top ten economies. Unfortunately, today's world is full of 'false economies' as described by Alan Beattie, an economist and author.

It is true that neither the government of India nor its people lack wisdom. Its business community is hard working as well. What the country lacks badly is national pride, a hard-working government and good morality among its politicians and bureaucracy. It is rather disturbing that certain key managers of economy have become almost like an institution. They don't retire or don't get replaced. They control the powerful Prime Minister's Office, Planning Commission and other apex public institutions, including RBI. They enjoy unlimited powers without responsibility and accountability. They belong to a small mutual back-scratching society. All of them are extremely close to the country's top business community, the Indian billionaires. And, if not all, at least several of them have contributed to the institutionalisation of corruption and the ever growing business-government nexus.

Ironically, history is replete with instances where many promising economies have failed and 'false economies' such as Argentina and Greece have emerged owing to such government-business nexus. In such economies, domestic inflation never touches the rich (it didn't even during the worst period in Argentina through the 1980s and Greece in 2009-10). It only hurts the common man. It is about time India, a very promising economy, draws lessons from the world economic history and cleans up its image to emerge as a clean and competent economy, living less on borrowing and with a sense of national pride. (IPA Service)