Anand Krishna’s musings

To stimulate growth or to rein in inflation. In the current global economic scenario, that is the question most Finance Ministers and Central Bankers are grappling with.

Take the example of India. Till a couple of months ago, a 9% GDP growth was very much on the cards. Inflation was fluctuating, no doubt, but was well under 5%. But now…? Inflation has inched up to almost 6%. It is clear that our GDP will not grow any more than 8.5 or 8.6%. To be sure, these are growth rates to die for, by most countries’ yardsticks today. It is close to triple India’s own historic “Hindu rate of growth”. But a less than 9% GDP growth rate upsets many calculations. Stock markets assumed that companies and indeed, entire sectors of the economy would grow fast enough to support an aggregate growth of 9%. But now that will likely not happen- at least for the next year. Sustained 9% growth for the next few years would mean that as a nation, we would start winning the war on poverty. Again, that won’t happen as quickly as many of us would like, because of a slowing growth rate.Is the growth rate in any one individual’s control? Clearly not- and even less so in a globally inter-connected world.

Growth needs capital to fuel it. And not everyone has enough of their own money (equity) to put into their business and grow it. Ergo, they rely on borrowings from friends, banks or even money-lenders (debt). But there’s a problem. Debt must be serviced regularly via interest payments and repayment of the principal. And as inflation rises, interest rates rise. Of course, inflation also increases the returns equity investors expect (so that their real rate of return is not adversely impactred). But unlike debt, equity investors take a bigger risk. They may not get to see dividends every quarter or indeed, each year. And there is no rule that says that the stock must appreciate by a certain percentage each quarter or year.

So there lies the nub of the trade-off. Should monetary policy be aimed at reining in inflation (so that credit does not become more expensive, in turn impeding growth)? Or should fiscal policy be used to provide tax breaks so that more money is put in the hands of consumers and hopefully, this money goes either into consumption (thus stimulating demand for goods and servcies) or goes into savings, and thus exerts downward pressure on rising cost of debt)?

I don’t know the answer…. if I did, I suppose I’d be a central banker or Finance Minister somewhere!

If we are serious about getting our hockey back on track, we need to design and implement a program that will start with 10 year olds, nurture their talent and coach them for the next 15 years or so. District level talent spotting efforts need to be supported with physical and mental conditioning, adequate nutrition and of course, fitness regimes.

The question is not whether a foreign coach can do the job better than an Indian coach. What matters is that whoever is selected to coach the team should know the way the modern game is played- not just in India but also in strong hockey-playing nations like Australia, Germany, Holland and so on. He should be able to meld the individuals (from different parts of the country) into a coherent fighting force.

The recent controversy around Ric Charlesworth’s role in rejuvenating Indian hockey is another example of India’s  hockey establishment being either unable to take the right steps or unwilling to. Either way, it does not bode well for Indian hockey. It should not be about finger-pointing either by former hockey players or current administrators of the game. All sides must put aside their personal differences and work together for Indian hockey- if they are serious about raising the standards. If not, let the Sports Ministry write a requiem for Indian hockey. Let even the limited resources currently being spent on hockey be re-directed to other sports.

Charlesworth was a formidable opponent on the field in his playing days during the seventies and eighties and Indian hockey teams from those periods have often been drubbed by Aussie teams playing under Ric. He probably does have quite a bit to offer Indian hockey, provided we are willing to accept it. However, if Indian talent is uncovered from rural India, and these players are not comfortable with English, we are adding another communication layer/overhead betwen the coach (Ric) and the team. And how well the interpreters do their job will be key. Speaking through interpreters may also inhibit free and frank interactions.

But at this time, we have to start somewhere and I am sure we can do worse than Ric. But the IHF should empower him adequately; else it will only be setting Ric up for failure and after one year, there will be calls for his ouster.

I wonder why corporate India is not more active in supporting hockey. It may be an investment with a 3 year gestation period. But if things go well, the ROI will be manifold. Is any CEO from India Inc. listening? Or should I say, reading this piece?