15 Feb We, Indians, should accept the fact that ours is not a great economy or society’s
We, Indians, should accept the fact that ours is not a great economy or society’s
Indian sub-continent might have supported one of the great human civilizations in the past. However the majority of people who were part of such civilizations led a precarious life. The greatness of any civilization was for a small section or elites.
While accepting the greatness of the past, we should note that it does not mean much to the present. The region which is currently called Bihar provided opportunities for advanced education millenniums ago, but it is of no significance to deal with its current under-achievements in school education.
India is a low-income country and the majority of its population continues to lead vulnerable or precarious lives. Around half of its population has to depend on a less remunerative agriculture and there are not many jobs in industrial sector. It is not only that one-fourth of the population lives in abject poverty but a serious sickness can bring down most of the non-poor below the poverty line. The majority of people in India does not have a feasible social security to take care of their needs during the old age.
In terms of social characteristics, caste continues to play an important role in economic and social mobility and also in social interactions. India is one of the few problematic countries in the world in terms of severe gender discrimination. This is reflected in the under-achievements of women in terms of education and employment. Needless to mention the issues of malnutrition and open defecation in India which are worse than the situation in other countries which are poorer than ours. However the purpose of this essay is not to highlight the failings of the country which are well known among its serious observers.
The main point is that people who matter, especially politicians and policy makers should not think that ours is a great economy and society. We may think that such a perception of greatness is harmless and may be a morale booster to help people to come together with a national pride. My argument is that such a perception is harmful and actually works against taking effective steps towards an inclusive and sustainable development of the country.
To be fair to politicians, there are some factors that may create a false illusion about India in their minds. Due to its geography and population size, the aggregate size of Indian economy could be one among the top ten in the world, even though its per-capita income is comparable to that of low-income economies. Even if 5 percent of Indians can be counted as part of the global middle class, their purchasing power could be more attractive than that of many (small) developed countries. Moreover, the national government is in a position mobilize a substantial amount of public resources. Hence an expenditure of Rupees 2000 crores for the global travel of its chief political executive or of Rupees 3000 crores for the construction of a statue and so on may look reasonable and affordable. An expenditure of Rupees 50000 crores for buying some new hardware for its military may seem normal. Given its ability to spend that much money on military hardware, one may see the political heads of the developed countries competing to hug or have a private dinner with Indian Prime Minister. What the former want is to get some big `deals’ and India may be seen as a `rich’ buyer of arms despite all the problems of its poverty and malnourishment.
It is understandable if others focus on the `purchasing power’ of the national government of India but it would be a gross mistake if Indian politicians are enamored by this global attention. This may affect the way they spend public resources and conduct international relations. It would determine their policy priorities. Let me elaborate a few:
- I don’t think that India can afford to get into a competitive expansion of military hardware. Though the spending on army personnel may have some multiplier effects within the domestic economy, imports of military hardware are not that beneficial in this regard. The prime objective of India’s foreign policy should be to have a peaceful coexistence with its neighbors. I am not underestimating the challenges in dealing with at least one neighbor due to historical reasons, border troubles, and also the messy policies of the developed world (primarily the USA) in extending liberal support to it in terms of military hardware. Despite this situation, my impression is that India has not explored enough the possibility of reducing tensions with its neighbors so that it can cut down its military expenditure and enhance the spending on social infrastructures like education and healthcare for its citizens.
- We should have only reasonable global ambitions. I am not against India trying to get an important position in the United Nations or other multi-lateral forums or extending financial support to poorer countries. However it may look odd when some of financial recipients of India’s generosity (which is also linked to the expected support in global forums) have a better status in terms of primary education than that in many Indian states.
- In my view, there is an unwanted focus on the economic growth of the country and there is so much (false) pride in whether India is the first or second in terms of the annual growth rate among large economies. It is not only the politicians who are at fault here. The capitalists, share-dealers, financial intermediaries, liberal economists and administrators and others who get their daily wisdom from business magazines, perpetuate the view that the job of the government is to boost the growth rate of the economy. In my view, there would be a reasonably higher rate of growth of Indian economy as long as the governments do not mess up the situation seriously. However that is not going to address the fundamental issues confronted by the country. Moreover the persistence of under-development may affect economic growth too. (For example, economists argue that the writing off of loans taken by farmers is not good for the fiscal-discipline and finally economic growth but they do not understand the political economy that breeds such demands.) We have enough indications that the economic growth in the country is not translating into adequate improvements in human development. There are structural constraints and social norms working against this transformation. These should be the focus of politicians if they want India to get out of its undesirable equilibrium in terms of development.
- An illusory pride in the greatness of the country may encourage politicians to adopt policies that may work against its people. Indian government views that the country has achieved a level of development so that it does not have to take assistance from other countries. It creates all kinds of hurdles against the migration of poorer women as domestic workers to other countries. The reality of the country or the eagerness of Indians to take up such work in other countries do not match with these policies.
- This perception of greatness discourages politicians from taking tangible steps to address the issues of its under-development. There have to be serious efforts to bring about changes in terms of caste and gender-discrimination. In order to do so, we have to accept that these ills are part of Indian culture, and we have to get rid of these cultural traits.
- Though the politicians who hold power in the national government may think that they can change the development status of the country dramatically and quickly, they should realize that the real action should be in states. There is significant variation within the country. The fundamental challenges in education, health-care, nutrition, sanitation, fertility rate, infant mortality rate and so on require actions on the ground and it is the state which can take effective steps. The issue is not merely the lack of enough resources. There are serious challenges in terms of program and policy implementation. The mitigation of these requires concerted social actions on the ground facilitated by responsive governments at the state and local level.
- Politicians, economic commentators and policy makers should not think that India is going have a linear trajectory of economic development. It would confront serious hurdles in this regard. The political mobilizations of the less-privileged and their assertion for a greater share of public resources and the power-cake (which is necessary and inevitable considering the social fragmentation of the country) would lead to the adoption of apparently irrational policies. These may have short-term costs on the economy and negative impacts on governance. However these are unavoidable for a sustained improvement in the welfare of the majority.
Hence it is good if Indian politicians and policy-makers have a realistic perception of the country. They should understand that those foreign dignitaries who call India a global power in bilateral talks may be talking about the filth, beggars and rapes in the country in their private conversations. The latter should determine our governance priorities.