As Adam Smith once put it, “On the road from the City of Scepticism, I had to pass through the Valley of Ambiguity”. When I entered this House, I was sceptical on whether I would live up to its daunting standards and I leave today as sceptical, but certainly with no ambiguity. In the debates there have been moments of highs and lows — disruptions, but also debates of extraordinary quality.
The stint in Rajya Sabha gave me the opportunity to raise issues germane to the development of Bihar. I did whatever I could to highlight Bihar’s achievements, challenges and opportunities. Notwithstanding Bihar’s glorious history, from being the seat of the oldest republic and the cradle of the great kingdoms of the Guptas and Mauryas, it fell back on times. The present regime under the leadership of Shri Nitish Kumar has brought about far-reaching economic and social changes. It will be fair to say that the outcome is neither the work of one party nor one person. It is the outcome of the joint efforts of the NDA, of which my party was an alliance partner till June last year. And the collective political leadership of both the parties played a critical role in bringing about these far-reaching changes. The challenges of Bihar are far from over. Sustaining high rates of economic growth over coming social challenges, moving over from identity-based development-centric policies, enticing private investment and improving physical and social infrastructure to reach national averages in our lifetime would be the litmus test of the present and future political leadership of the state.
I want to speak a little on what I perceive to be the five key challenges of India: First, how to achieve high rates of sustained economic growth without accentuating inequality. Twenty-first century capitalism may have metamorphosed (or undergone creative destruction, as Joseph Schumpeter would have said) in multiple ways, from laissez-faire capitalism to social democratic capitalism to what is now called Capitalism 5.0. Contemporary economic literature suggests that economic liberalisation unleashes forces of competition, improving productivity, enlarging the bouquet of choice for consumers, improves Total Factor Productivity and enhances growth. But, are there limits to what is pejoratively described as neoliberal capitalism? How does one balance the virtues of growth with the compulsions of equity? Can there be a “Conscionable Capitalism” relevant to India’s socio-economic compulsions?
Second, when will we ever have time to reform the rubric of governance? And to reform Parliament itself — the centrepiece of our governance architecture? As India has become increasingly integrated and interdependent with the world, are the parliamentary rules, procedures, methods of work and exercise of parliamentary superintendence over the executive in India adequate to meet contemporary challenges? Should not the parliamentary calendar be fixed and predictable? Should budget-making be shrouded in secrecy and all parliamentary engagement become ex-post and not ex-ante? And in an interdependent world, should the executive have the latitude to make far-reaching international commitments on trade, on environment, on energy without parliamentary approval? Should we not at least devote one day to discuss India’s Five-Year Plan? These are matters for this House to ponder over.
Third, the changing role of the state. In a poor society like ours with inadequate social security systems, what would be a more optimum mix of poverty alleviation measures and a new form of welfareism, which we have embraced as legally enforcing entitlements? Unless radically different ways of delivering service and implementation are adopted, these added responsibilities of the state will make growth itself a far cry.
Fourth, how to break the conundrum between agriculture, manufacturing and employment in a country with adverse land-man ratio? To raise agricultural productivity would need externalities of scale by creating alternative gainful employment opportunities. Economies of scale would entail alternative employment opportunities in manufacturing hubs, which has scarcely begun. Orderly urbanisation in major cities is inescapable for sustaining migration in the quest for alternative employment opportunities. Managing the environmental consequences of growth is easier said than done. Our carbon footprints may be low, but conscious steps which will reconfigure economic activity patterns and variations in alternative forms of energy — and in agriculture, industry and services — will prove challenging. These may require new approaches and new ideas beyond what we have tried. To this end, John Maynard Keynes had said, “The difficulty lies not so much in developing new ideas as in escaping from old ones.”
Finally, making India an innovation-driven society. Technological and organisational innovation is the key to higher productivity and competitiveness. We must encourage and incentivise innovation and its diffusion in academia and government as well as in enterprises of all sizes. Innovation should focus not only on research and discovery but [also] on how best it benefits the poor.