India’s economy — structurally sound, and much admired by the international rating and lending agencies for its probity — has been beaten down to a GDP growth rate of 5% in the June 2019 quarter. Growth has also been slipping for five quarters. This has excited much comment but it needs to be seen in perspective. Domestic consumption is sharply down; jobs are being lost in the formal sector, and even core sector parameters are in the doldrums. But, given all this and more, there is no existential threat whatsoever.

We are still ticking over, making treaties, purchasing armaments, strengthening our defences, furthering our diplomacy and international reach. We hold strong foreign exchange reserves, even as chunks of foreign investment exit the stock market, and the rupee takes the battering of its life.

Most developed countries, suffering from minuscule growth, or mild to severe recessions over a prolonged period, think 5% is still enviable. But of course, it is a sharp come-down from our own peak performances of the recent past.

As an emerging economy, though even now in the top ten, if 5% were to become the annual figure instead of just the latest quarter, we have to see it through the prism of the embedded growth propulsion in our DNA. And this, for decades to come. There is much to be built, improved and modernised. There is always a demand push towards addressing huge deficits in infrastructure and systems to tap our full potential in all sectors. This downturn is cyclic.

The Indian government has never defaulted on a payment obligation so far. This debt scenario is the main difference with the mature developed economies, many of whom owe many multiples of their GDP.

However, given resource constraints and a massive 1.3 billion population, our relatively responsible management of the economy, despite inheriting almost 11% of banking assets in NPA, we are not doing too badly. And we are indeed collecting on the non-performing assets by a more determined pursuit of economic offenders than ever before in our 72-year history. But the very cure may be the culprit, too. Austerity in government money management has reduced demand and consumption.

On the plus side, again in an unprecedented way, the Modi government has itself steered clear of all scandal and corruption since 2014. This has been combined with the delivery of welfare to the poor without leakages. Our sovereign and domestic debt levels are modest yet, with even domestic debt at around 80% of the $ 2.8 trillion economy and external debt at some 5%. We will, it appears, never become a banana republic at this rate. The Indian government has never defaulted on a payment obligation so far.

This debt scenario is the main difference with the mature developed economies, many of whom owe many multiples of their GDP. Some, are to all intents and purposes bankrupt, only kept afloat by their lenders. Others are having difficulties just servicing the debt, let alone bringing it down or spurring growth.

The current 5% in India is comparable to the 4.7% in the quarter at the end of UPA II (2013). It had tumbled from a high of over 9% at its peak. And this, with inflation surging in the double digits as well. The UPA could not even blame demonetisation or GST, as it does now with its ravaged and much-diminished presence. However, high oil prices did plague it at the time. This was the state of play under the stewardship of eminent economist and former Prime Minister Manmohan Singh. It is, therefore, quite droll that Singh is making bold to vehemently criticise the present position.

Through all of Modi 1.0, the economy turned in a performance of over 7% in GDP despite inheriting a scorched earth economy. The other chief parameters such as the fiscal and current account deficits and inflation have also been admirably controlled throughout, and continue to be in check into the first months of Modi 2.0.

However, because of the sharp slowdown, the government is now easing money supply to different sectors and reducing interest rates. It is also removing roadblocks to FDI. In addition, the PMO itself — rather than the apparently leftist and 1980s-style Garibi-Hatao Finance Ministry — is working on every distressed sector. This includes those that can provide an early boost, such as Real Estate and the Stock Market.

Indications are that business, industry, the farmers, rural India, the stock market and international investors have confidence in, and are appreciative of, the recent government efforts to revive growth. Particularly after a most peculiar Budget presentation in July. The unfeeling Budget in July caused a lot of economic damage in the aftermath, but the recent response of the government to sharp all-round criticism has helped matters immensely.

Now the doomsday scenario projected by some of the critics of the government is far from justified. The corrupt, mostly from the decade long UPA regime circa 2004 to 2014, and its adherents, are being brought to book alongside. And this is indeed very uncomfortable for those who may be next in line.

There are some international headwinds from the battle of tariffs between America and China but this is affecting the whole world. The tensions with Pakistan and China post the turning of J&K and Ladakh into separate union territories could, however, have a silver lining. The focus has shifted to PoK as a bargaining chip for India.

America wants India’s military help in Afghanistan, where India has sunk over $ 20 billion in Afghan infrastructure already; and China wants India’s participation in the CPEC. PoK could well be the price for India’s cooperation. Other countries such as Russia, France and Britain, all permanent UNSC members, may play along too, goes the informal buzz.

A total solving of the Kashmir imbroglio with a gain of long lost territory, along with a defanging of Pakistan, will have strong economic benefits in the medium term. The ideal way to approach the current economic situation, therefore, is to regard it as an opportunity that may not present itself again.

Through all of Modi 1.0, the economy turned in a performance of over 7% in GDP despite inheriting a scorched earth economy. The other chief parameters such as the fiscal and current account deficits and inflation have also been admirably controlled throughout, and continue to be in check into the first months of Modi 2.0.

We have mature skills and diplomacy on our side today, and there is nothing wrong with the economy that can’t be fixed. Prime Minister Narendra Modi is acutely conscious of the importance of boosting the economy to aid India’s progress and enjoys a very high level of public trust. He is ably backed by a very can-do Home Minister in Amit Shah. This has resulted in moving forward the safety and security of this country, diminishing threats from multiple directions. This too has long been a drain on the exchequer.

Large sections of those MPs and MLAs who sit on the non-treasury benches are also supportive of this government. All this makes for a very worthwhile economic springboard for the near future.

The early life of legendary American entrepreneur J Paul Getty presents some pointers on what is possible. With an education in California and Oxford, Getty became, not a diplomat, as he first thought, but a freelance oil prospector and dealer in oil leases in Oklahoma.

This was early in the 20th century, when the so-called “seven sisters”, the Standard Oil Company, Shell, Union Oil Company, General Petroleum Company, Richfield Oil, Texas Oil Company, Tide Water Associated Oil Company, were huge and integrated. They went on to dominate the international oil business too.

Getty and his father were pioneering, seat-of-the-pants, independent drillers, known as “wildcatters”. The Gettys leased likely plots, rigs and crews, like many others, but repeatedly struck viable quantities of oil. In a short time, apprenticing under his father, helped by his legal acumen, feel for a likely lease, and experience, J Paul Getty parlayed his own “gushers” into a first $1 million in profits by the age of 24. And then, to everyone’s astonishment, he retired to two years of utter hedonism. Bored with the exclusive life of pleasure, Getty came back into the oil drilling business at 26. Thereafter, he multiplied his fortune, eventually buying a superior building block.

Getty purchased his way into one of those large integrated oil companies by patiently accumulating its common shares. He started in after the Wall Street Crash of 1929 when bluechip stocks were severely beaten down. In time, almost a decade, he had control of Tidewater, a big oil company that had refining, marketing and distribution reach, but bought some of its crude oil from others. Later in the day, by now a billionaire, Getty competed with the Seven Sisters in Arabia too.

India is at a crossroad and watershed today, but there is no need to expect anything but greatness and growth in its future. It has a clear vision of where it wants to go with its $ 5 trillion and $10 trillion road map, and its destiny is to be in the top three economic powerhouses of the world. With no structural shortcomings, Modi will continue to steadily take the right policy decisions. This will strengthen the economy/infrastructure, security, and technological modernization of this country. There will be holistic and all-round development.

Judging things quarter-to-quarter is an American practice we have adopted, and it has its advantages, but we should not allow ourselves to lose the woods for the trees.