India, twenty years after

It has been twenty years since the fairly ambitious economic reforms (grouped under the headings of liberalization-privatization-globalization) were launched in 1991 under the stewardship of the then Union Finance Minister Dr. Manmohan Singh, with the blessings of both the International Monetary Fund and Prime Minister P.V. Narasimha Rao. Many of my readers have grown up over this period (I have in mind all who were less than 18 in 1991), so what went before is history to them; even, as I fear is likely, mostly unknown history.

In  short then, India did not really change course (that is, shake off its Nehruvian socialistic legacy, as modified in the Indira Gandhi era) of her own will; she was forced by extreme circumstances. The public sector driven model of growth had stagnated, if not entirely failed, technology had remained by and large primitive, the economy was in the doldrums, poverty and unemployment were rampant, shortages of essential commodities a part of daily life, corruption was perceived to be eating into the vitals of society like a cancer (sounds familiar?), and we had come perilously close to national bankruptcy. The Soviet Union had collapsed, the US was triumphant, China was growing spectacularly along the path of ‘market socialism’ shown by Deng Xiaoping, and Rajiv Gandhi had induced a vague sense of national urgency: ‘the future is being determined by drift and not by direction’. So it was decided at the highest level to give ‘new ideas’ a try (in a manner of speaking – basically it was a tentative throwback to 19^th century free-for-all capitalism which had been thoroughly discredited and reviled worldwide three generations ago!) In  a nutshell, government began to relax controls and step back in almost all spheres of life, while encouraging private initiative and capital, both domestic and foreign, to ‘go forth and multiply’.  

What has happened in these twenty years, if we try to draw up a report card?

First, the good news.

• We have jumped on to a much higher GNP growth curve, and for more than a decade we have been among the fastest growing economies in the world,
• The economy has certainly opened up to a considerable degree, so that well-off urban consumers today can buy almost all global brands of consumer goods off the shelf,
• Our foreign exchange reserves have ballooned,
• Some sectors, such as telecom, IT, pharmaceuticals, automobiles and airlines have experienced spectacular growth,
• We now have several dozen dollar billionaires (growing yearly), and more than 100,000 high net worth individuals (owning disposable assets worth more than a million dollars), and a comfortably off, high-aspirational middle class estimated to be anything between 60 and 150 million strong,
• We are a nuclear power (but so are failed states like Pakistan and North Korea!), planning missions to the moon, and being engaged by big powers including the US, Russia and China in globally significant cooperative projects (albeit still in a rather small way, considering our size and our idea of our own importance).

However, the flip side list would be much longer (I’d prefer my readers to draw it up for themselves, perhaps helped along by a lot of things I have written here earlier!).

In order to emerge as definitely a great power respected worldwide within another 25 years (one generation), India, I think, absolutely must concentrate on achieving at least the following

• Maintaining an overall annual economic growth rate of 7%-plus per annum,
• Quickly reducing the annual population growth rate to about 0.5%,
• Sustained pursuit of anti-poverty programs to reduce the proportion of desperately poor people to less than 5% (compared to varying current expert estimates of between 26 and 40%), and
• Conserving and improving upon all the resources, natural, cultural, technical and spiritual, that we (still-) have.

In turn, in order to achieve the above, we must

• Mount a serious and sustained national anti-corruption campaign, starting with massive electoral reforms,
• Reorganise education so that it simultaneously serves two equally critical objectives: a) giving the vast majority of the population basic education and saleable skills (by which I mean everything from plumbing to surgery) for a living, alongwith a minimum of civic sense, and b) allowing the intellectual elite to flourish, so that a new outburst of creativity of the highest order is encouraged, equally in the sciences and the arts: there is no other way for a country to be regarded as a world leader,
• Build infrastructure on a war footing – roads, ports, airports, canals, bridges, dams, power stations, housing, new cities by the score and the like,
• Make the richest 10% pay for all the developmental expenditure in a much bigger way than they have done since 1947 through a war on hidden wealth and a combination of sternly implemented income tax, wealth tax, inheritance tax, luxury consumption tax and gifts tax (in 2006, they held 53% of the country’s total wealth: see the table under the heading ‘Living standards’ at this website. The figure has been rising continuously, and I won’t be surprised if it has crossed 60% in 2011: 10% of the population holding 60% of the country’s wealth – and that too, not taking account of the huge black economy!), because there are no other sources of the enormous funds that will be necessary, and tens of millions of people enjoying the advantage of good roads and clean drinking water is infinitely more important than a few thousands living in palaces and driving BMWs,
• Ensure a far stronger, more efficient maintenance of law and order in day to day life, with particular attention to the weakest sections – women, children, the handicapped, the old and the ill, more especially the poor among these categories regardless of caste, creed and location  – than we have had the good fortune to enjoy so far,
• Make a concerted and vigorous nationwide campaign to improve the natural environment and preserve the literary/artistic heritage (both being so neglected and so seriously on the verge of ruin at present as to raise fears that the country will soon become unliveable physically and barbaric culturally).

A few things must be remembered in this context:

• Though our GDP (in purchasing power parity-adjusted terms) might exceed that of the USA by mid-century, by per capita income we are still likely to remain a rather poor country, given our enormous population,
• Right now, we are rapidly becoming a dual nation – in terms of the rural/urban divide, the educational divide, the cultural divide, the income/wealth divide – can progress be sustained for long under these conditions?
• We are not, I think, a hardworking nation: we work only if we are compelled to (which I think explains the success of NRIs). Is there a solution to this problem, without dictatorship of some kind (which I am against because of both strategic and moral considerations)?
• We do not learn from past mistakes, unlike many other nations. Can this be changed?
• The young among the most privileged sections, in terms of both education and income, are rapidly becoming sure that there is nothing to aim for in life beyond money and shopping: your degree of success varies only in terms of how much you make and spend (and how you make your money is unimportant: being a fashion model or video jockey or cocktail shaker is ‘better’ than being a teacher or poet or scientist or soldier if it helps to make easy money more quickly. Note well: their parents overwhelmingly agree – no ‘generation gap’ here!). Also, aping American slang is their only index of smart discourse, and ignorance, far from being shameful, is rapidly becoming okay, if not actually a matter of pride: one no longer has to know anything to claim the right to hold strong opinions. Has any nation become great with this quality of human resources?  Can google really substitute for both brains and consciences?

In March 2010, I wrote a post titled Join this debate. The response from my readers was rather tepid. I am trying to rekindle the argument. Let us see whether I succeed this time. For clarity’s sake, readers may comment categorically on a) whether they agree that I have a big dream for my country or not, b) whether it is a good dream, c) whether it is likely to come true within the near future, and d) what obstacles stand in the way. Do write in with thoughtful comments. Most of my readers are much younger than I am: remember it is your future that I am discussing here.

P.S.: I have been reading Sugata Bose’s new biography of Subhas Chandra Bose, and have been trying to think of India’s future as Subhas might have thought if he were alive now, and about my age (exactly the age when he vanished from the public eye). I refuse to believe that his thoughts would have been less valuable for India than Nandan Nilekani’s. No personal slight intended against the last-named: it’s only that I hate to see ‘dwarfs in giant’s robes’ being hailed as giants. As I wrote somewhere before, once we had the likes of Vivekananda, Gandhi, Tagore, Subhas and Jagadish Bose to look up to, now we have SRK and Dhoni and Nilekani and Hazare. Speaks volumes for the road India has travelled since 1947…