New Delhi: While the regime focuses on terrorism exclusively, it is making light of the growing evidence of economic contraction which will leave India rather more geopolitically imperilled. Growth was down to 5.8 per cent in the last quarter but it could be worse should the findings of Arvind Subramanian, the former economic advisor, published in a Harvard paper, be true. He alleges on the basis of his own researches that GDP growth ought to be slashed by as much as 2.5 per cent from official figures for the last eight years or so.

To save the regime’s blushes perhaps, Subramanian refrained from studying the decline induced in the economy by demonetization and a vexatious GST whose cumulative losses were pegged by the former prime minister and economist, Manmohan Singh, at two per cent. If to Subramanian’s contraction numbers, those of Manmohan Singh’s are added for the post-demonetization and GST phases, you would have the Indian economy precipitously fall to 1.3-2 per cent GDP growth for the present. That is not tepid growth or even recession but a downturn verging on depression. If it goes unchecked, India might as well kiss its geopolitical rise goodbye. One does not have to explain in terrifying detail what that means for the country’s long-term security.

Like it or not, Donald Trump has changed the rules of geopolitics and nudged it closer to geo-economics. It is not divisions that matter as much as the economy. China can flex its muscles in the South China Sea terrorizing weak neighbours like the Philippines whose fishing vessel it sank gratuitously hours ago. It has tested some of the world’s most advanced weapons recently with an eye on America but they advertise the opposite of strength. Analysts and commentators at the SCO summit underway have already noticed that Xi Jinping, the Chinese strongman, no longer struts about as though he owns the show as he did earlier. It is not massed troops and shock-and-awe tactics that appear to have chastened Xi. The United States has seized China in the weakest part of its sovereign anatomy, the economy, to squeeze the life out of it. Xi likely will blink first in a new Cold War episode where thermonuclear weapons scarce enter the equation.

And long before terrorism can leave a strategic impact on India, it would be damaged by the same economic perils from the United States that have visited such havoc on China. The US secretaries of state and commerce are each coming with their dhobi list of demands of India and they will not settle for anything less than the most approximation to free trade. If the stronger Chinese economy cannot withstand US pressure, what’s the chance for India to bear force 10 winds? Lying to the country, economic data was fudged; and concealments were resorted to when the truth was outrageous and shocking such as unemployment at forty-five-year lows. The US side will contemptuously use the “sexed up” numbers to hoist the country with its own petard. And punishment for not falling in line would be severe.

Having won the election on a national-security platform, the regime cannot abruptly abandon it without angering and frustrating its hyper-nationalistic constituency. But continuing with hyper-nationalism and the social strife it demands to the neglect of the economy would lead to self-fulfilment of the country’s fears apropos its adversaries. The country could have made virtue of US trade demands were a road map ready but none seems to hand; except Nitin Gadkari, everyone else seems to be running around like headless chicken; governance is lots harder than winning elections. However, even the United States may have underestimated the crisis of the Indian economy. It appears no longer a simple matter of downturn over several cycles. India might be ensnared in a lower middle income trap as Rathin Roy, the economist, convincingly postulates. And the redistribution programme of the last five years, unashamedly meant for vote gathering, may have further squeezed out the last good bits of the economy.

The internet is full of horrors of the regime’s planned revenue programmes including estate duty (comparisons are made to the West which is absurd for a trapped lower middle income economy) and an expanded wealth tax. In a situation where domestic investment has dried up, consumption is down and overall business sentiments despondent, extortive taxes would add up to the last nail in the coffin. And in the ferment that will follow, foreign investors will flee, cutting their losses. It would be a miracle if India’s growth story survives the catastrophe. When the body loses its immunity, it falls prey to diseases. Imagine a strong, inclusive and flourishing economy founded on social peace and stability as the equivalent of bodily immunity and the moral becomes clear. Ways and means have to be found to remove elements of bloodshed and violence from adversarial competition between states of which one manifestation is terrorism. And for that, the economy is a profound weapon paired with diplomacy.