I did not write about this new year because of a sense of d?j? vu. I had said in my Express column at budget time in 2011 that with a high interest rate coming and with investment and export growth slackening, GDP growth would be lower given an average monsoon. And the fiscal gap would consequently be higher. Unfortunately I was right. To the criticism that I was wrong in saying that food prices would not fall much in December, I plead guilty. But no one knew in September that GDP growth would slacken so much, since a 7.5% growth projection was considered pessimistic then. On food, it needs to be understood that the prices under pressure?as I have always argued?are non-cereals like pulses, oils, sugar and more importantly vegetables, fruits, milk and meat. Here the income elasticities are more than 1.5 to over 2 and a reduction in growth of 2% knocks off 4-5% in demand. Apart from seasonal factors, the slowing in growth is softening inflation. Our earlier work had demonstrated with Indian econometrics a point Kaushik Basu has made with global data, which is that the inflation-growth tradeoffs begin at 7% plus. The laid back comments we are getting today could be ignored if growth in 2012 was not at stake.

The day the IMF chief was warning us about 2012, Indian chiefs were saying Happy New Year at around 7% growth, with the bankers putting their bets at 6%. Other BRICS are all doing better than us, cautioning us on the dangers ahead, and the ADB has been asking Asia to pull up its socks. China, Brazil and Russia are all concentrating on policies to accelerate manufacturing growth. They are also protecting their agriculture and energy markets in an extremely volatile market. We are the outliers. These mundane issues don?t ruffle a feather here. The only thing that matters is FDI in insurance and retail trade. Now I am all in favour of FDI in retail if we give farmers producer companies and cooperatives space in the Walmarts, forcing the latter to go to the smaller towns rather than keeping them away from where they are needed. But to suggest that that 51% FDI is the numero uno policy concern to get higher growth in 2012 is, to put it mildly, somewhat funny. Walmart is cleverer than that and, with a long-term interest in India, said it doesn?t mind 49%?thank you.

We are the only BRIC country blessed with a manufacturing growth rate turning negative this year. The respected Gandhian Mansukhbhai Joshi invited me to lecture at Rajkot on globalisation and, apart from all the college folks at the lovely Bal Bhavan, the president of the Rajkot Small Industry Association was there, along with his cup of woes. The auto part wallahs with global competitiveness are in serious trouble and won?t your friends in Delhi help? Mansukhbhai had a twinkle in his eye as I hummed and hawed. When the going is good we take credit, when the carnage begins we look the other way. In 2008 when I complained about losing a million jobs in the globally competitive diamond polishing and textiles industries, a Delhi policy czar declared authoritatively that some people have to suffer in a market economy. This time they want us to be happy at 7%. But the Manufacturing Competitiveness Commission has given details of incentive mechanisms, technology policies, skill training, strategic plans and tariff tweaking for 29 industry groups where in their opinion we are at or near the global best, but the only part that?s accepted is FDI and lectures on innovation. Now innovation is a great thing and I taught at Wharton and the IIM Kolkota once but if innovators could be produced in colleges we wouldn?t read Schumpeter any more. Will the strategists get off their mark and give us the details they are all looking for in other countries?

There is not much talk of infrastructure investment apart from the Twelfth Plan statement that the Eleventh Plan is off the target. Ours was the only stimulus in 2008 that was not infrastructure-oriented, apart from giving some buses to metros. The Chinese stimulus was focussed on infrastructure and the Obama one largely so, with a dash of help to small business. This time there is no option but to raise resources, government saving and public and PPP investment, for sovereign default is also a problem and you simply cannot only spend your way through.

A lesson of the last crisis is that speed is of the essence. Don?t wish the problem away in 7% talk. A second lesson is, don?t let Anna give you the space to dodge the fact that India can do better in 2012. Now is the time to focus on essentials.

The author is a former Union minister