Year-end thoughts

The economic slowdown, terrorism and inflation were the three main items of the year. Towards the end of the year, terrorism came centre-stage following the attacks in Mumbai in November.

There has been much bravado -and not a little hot air- following the Mumbai attacks. A sense that we must "get touch" with terror. As I have said earlier, there is little chance of our being able to eliminate terror in the near future- indeed, given the geo-politics of the country and the obvious governance deficit, we must brace ourselves for a longish period of terrorist attacks.

What we can and must do is minimise the impact of such attacks. In general, terrorism, insurgency and even war seem to impact little on economic growth. India, Pakistan and Sri Lanka, among others in the world, have seen economic booms even when afflicted by high degrees of violence. That's because modern economies are decentralised, so attacks in one or two spots, while creating media headlines, have create very little economic dislocation.

But for us Mumbai poses a headache because financial activity is concentrated there and that too in the southern tip. We need alternative growth centres to Mumbai- we simply can't afford to have Mumbai drawing in more and more people and becoming more ungovernable. We should seriously consider creating three or four new cities with first-class infrastructure- China plans to add 20 new cities eery year over a twenty-year period. More on this and the year that went by in my ET column.