Would we be fourth time lucky? After all, we weathered the 1991 crisis; in fact, we emerged stronger with economic policy undergoing a metamorphosis. The 1997 East Asian crisis and the 2008 global financial meltdown, too, did not hurt us much.
The government would like people to believe that India can pull it off again. With Prime Minister Manmohan Singh taking charge of the finance ministry and frowning at some of the unhealthy measures his predecessor had taken, there was enthusiasm in some circles.
The Sensex showed some sprightliness. A closer scrutiny of the situation, however, reveals a grim scenario. For this time, things are fundamentally different.
The Left turn that India took under the United Progressive Alliance (because of the alliance with communists and camaraderie with National Advisory Council or NAC members) is responsible for the present mess.
Worse, the turn is not restricted to a few policies that can be revised by this or the next government: big state enthusiasts have also made the future bleak by laying down landmines in the domain of economic policy.
The Left turn of 2004 should be understood in proper perspective. It was after long years in wilderness that all forces on the Left were able to make a big comeback, primarily because they found a sympathiser in Congress president Sonia Gandhi.
They peddled the narrative that all ills in the country were the result of the opening up of the economy, the freedom enjoyed by business people and the reducing state role in the economy.
In their scheme of things, unbridled public spending is good, private enterprise is evil, and the 1991 liberalization was the original sin. They always champion the causes of the poor, 'the excluded', the environment. And this is how they lord over public discourse.
The ascendance of Leftist theory and practice has had deplorable consequences for the public exchequer, the economy and economic policy.
Thanks to the communist- and NAC-inspired populism, the fiscal deficit in absolute terms has zoomed from Rs 139,231 crore (Rs 1392.31 billion) in 2004-05 to Rs 513,590 crore (Rs 5135. 90 billion) today (budgetary estimate).
This is despite the high growth rate attained in the early years of UPA rule and better tax compliance.
The non-fiscal consequences are equally, if not more, hurtful. Resource crunch made the government desperate for revenue.
In 2005, it disobeyed the Supreme Court in Rs 800-crore (Rs 8 billion) dispute with ITC; this year, it is again in no mood to respect the apex court verdict on Vodafone. You can't do a Vodafone and expect investors, domestic or global, to be bullish on India.
The rainbow coalition of professional radicals, green activists, bleeding hearts and downright Luddites has not only strained the coffers but also made normal business activity a painful process.
Questions about clearances are raised about the Lavasa project after many years of its commencement. Posco's plant in India, the largest foreign direct investment in India, has also fought countless similar battles.
Against this backdrop, international rating agency Standard & Poor's warning that India risks a sovereign downgrade should not come as a surprise.
S&P's warning would not surprise India Inc, which has already started looking elsewhere for business opportunities. According to an estimate, our companies invested $8 billion in the first four months of this calendar year.
More than business, it is the worker who is bearing the brunt of bad policies that have resulted in slowdown.
According to the Apparel Export Promotion Council, 7-10 per cent employees in the textile sector - the largest employer in India after agriculture - have been laid off in the last two years. This is what the anointed revolutionaries have done for the 'marginalized'.
But the anointed are absolutely insouciant of such developments. For lesser mortals like us, seeing is believing; for them, believing is seeing, and they believe in the Theory.
We see that when there is development, the rich and the poor, the industrialist and the worker prosper together; but the Theory supports a zero-sum class war and, therefore, the reality has to be like that.
They don't allow the trivial matters like capital flight, lay-offs and downgrades by rating agencies to shake their beliefs.
They are not only doctrinaire but also unrelenting. Howsoever sound may be the arguments against the food security legislation, whatever may be the financial compulsions of the government, whatever may be structural constraints - they are persistent in their demands. And they can't be trifled with, for they are Establishment revolutionaries, however odd the term may sound.
What is even more damaging is that they have laid down landmines in the economy, and will continue to do so as long as they are in the reckoning. The rural employment guarantee scheme is one such landmine.
Though expenditure on this scheme has come down lately, it has the potential to grow. Then there is the forest rights legislation, which proved to be a big problem for Posco; it can be an irritant for any industrial project. The food security law would be another landmine.
Meanwhile leaders of the supposedly Rightwing Bharatiya Janata Party have been busy fighting each other, letting economic policy to be decided by the government-NAC dialectics.
Establishment revolutionaries may not have succeeded in reviving the worst features of the 1970s, but they have surely resuscitated the ideas, ideals and phraseology of the bygone era. It is not only the business environment but even the climate of opinion is anti-business.
With the exchequer feeling severe strains, the economy in a shambles, business confidence in nether regions, establishment revolutionaries refusing to relent, and the government and the opposition lacking direction, India cannot come out unscathed from the current crisis.
The author is a freelance journalist.
