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Friday, March 05, 2021

Millennial Bharat,2020 India

Our GDP will grow either fast or,hopefully,very fast. The trick will be to adapt society to change....

Written by Jaithirth Rao |
January 1, 2010 3:24:35 am

In India,we measure time in terms of “yugas” with each yuga lasting a few million years. Millenia and centuries count for little. Who cares about decades? And yetz given that we invented the decimal system where the number “ten” is a central showpiece,it may not be untraditional to think in terms of decades. How will the next decade be? Are there any inflexion points,any crucial collective decisions which can turn us one way or the other? The cynical response,is that the next decade will be like any other. At the end of it,we will still be an aspiring super-power,mainly in our own minds; we will still have our ever-present poor with us—they of the “thin legs”; we will still have dirty cities,filthy towns and filthier villages; we will still have venality and corruption on a scale that will keep us world champions in this dubious space; some individual Indians will still succeed not because they are Indians,but despite being so; having said all this,we will still be making progress. Albeit in our own halting,fumbling way; our near-anarchic democratic system will ensure that we do not get too many things blatantly wrong even if we do not get many of them dead right. In short,ten years from now I will probably be writing another Express column not very different from this one! But then,not to bear witness to one’s time and place could be construed as “adharmic” ; hence this attempt to fulfil one’s “manushya dharma”—a human obligation,not anything associated with “varnashrama” which is obsolete,politically incorrect and dysfunctional as it always has been.

Translated from the Sanskrit which has more or less disappeared from the landscapes of our minds: “In this reign of the Brahma who is known as Adi,in the second phase of his reign,in this Age of the White Boar,as a descendant of Vaivaswata Manu,in the first half of the Iron Age known as Kaliyuga,placed as I am south of Mount Meru,in Bharta Varsha which is part of Bharata Kanda,in the Crab Apple Continent of Jambu-Dvipa,west of the divine Godavari,on the shores of the western oceans,in the Land of Parashurama,on this island sacred to the goddesses Mumba and Mahalakshmi, in the calendar year 2009 as calculated by the Yavanas,as we enter the calendar year 2010 as now accepted by our own benign government (hence not referring to the calendars of Vikrama or Shaalivahana), in the fifty-ninth year of our glorious Republic,I hereby stand forth to give my testimony with respect to my fears,anxieties,hopes,aspirations,dreams and nightmares for this fair land of ours named for mighty Bharata,the son of forgetful Dushyanta.”

To abandon poetic Sanskrit and to revert to prosaic English is the task of a second. (In contemporary India,a Sanskrit phrase is literally “Kshana-Bhangura”— that which can be destroyed in a second!); let me make it even more prosaic by adopting the grammar of the dismal science of Economics. Given our Savings Rate and given our ICOR (Incremental Capital Output Ratio,to the uninitiated),I am of the firm opinion that in the next decade an eight to ten percent GDP growth rate is a given. There is virtually nothing that our leaders or any other sundry actors can do to prevent this. Pessimists and doomsayers simply do not know how to multiply one number by another. The real questions to ask are: Is it possible to have a higher growth rate? How will we handle the social and political tensions that growth will create? (As an aside,stagnation or low growth rarely create too many tensions!) Will our GDP growth help us lick the persistent poverty in our midst? Are we going to destroy our environment and leave a desert behind for our children? We must perforce confront each of these questions,we must grapple with the answers however difficult or problematic they may be.

Is it possible to have a higher growth rate? Yes it is. There is nothing inherently Sinic about double digit growth rates. In order to get to the next level,there are a few things we need to do and some things that we definitely need not to do. We must not reintroduce a predatory tax system. In the guise of a new direct tax code,our finance minister should not destroy incentives to create wealth. The proposed re-introduction of wealth tax on financial assets is one such measure that may very well slip through in the fine print of the new code. Investments in start-up companies (a pre-requisite for healthy growth) will suffer as all investors will get mired in endless litigation with the mandarins of the Income Tax Department; promoters will try to suppress their share prices as they used to do when the clever Krishnamachari supervised the finances of our nation. On the other hand,the speedy introduction of a national GST will provide a fillip for growth,reduce prices all around and make government revenues more buoyant. We do not need any more Press Notes converting Indian companies into foreign ones. We must somehow manage to slip through labour law reform by sleight of hand,for given the realities of our democratic political economy and the power of the aristocracy of unionised labour doing this khullam khulla will simply not be possible. We must somehow create islands within the country where power generation and distribution are economically viable,where we finally escape the curse of power cuts. Again realistically speaking,this cannot and will not happen everywhere. But islands that slowly engulf the whole country are do-able and would constitute an eminently practical second order optimal solution. We must continue with the new-found focus on physical infrastructure. Our Central Government should stop expecting bankrupt states to fund these efforts fully or even partially. The Centre should just take bold steps and move on. If we do all of this,even with a fifty percent rate of success in their execution,a twelve to fourteen percent GDP growth is quite simply speaking staring us in our face. Will we like Arjuna,in the first chapter of the Gita be paralysed by faint-heartedness or will we like he does at the end of the eighteenth chapter go forth and fight to conquer? The choice,dear Brutus is ours to make!

How will we handle the social and political tensions of the next decade? The poor of India,left to themselves have rarely rebelled against the worst of rulers. But the poor,once infused with aspirations for a better life are another matter altogether. Anyone who is even slightly acquainted with the young in our country knows that there is a hunger for betterment. They are willing and able to take risks and to work long and hard hours. They need the right tools,the right opportunities. The sad,but hopeful voices of many young people who say “ I need to know English well” need to register with our rulers. If the children of the rulers can and do learn English,why not the children of the poor? Or are we committed to a new caste system that conspires to deprive many of crucial knowledge? A bold voucher-based education initiative where parents of the poor are free to choose the schools for their children will at one stroke dramatically improve our human capital and give a concrete opportunity for India’s poor to pull themselves out of the blind alley that they are trapped in. Guess what…it will be a vote-winner as well. Will our rulers finally get it? Or will they continue to stay tethered to selfish fanatics and nay-sayers in their midst? If we spent a fraction of the money that we are willing to devote to fighting the Maoists on a voucher system to encourage parental choice of schools in any sector (government,private on a for-profit basis or private on a not-for-profit basis) one can safely bet that most Maoists would opt to send their children to these schools so that the children at least can escape from poverty and destitution. The time to act is now. Manmohan Singh and Kapil Sibal have an opportunity to make it big in the history books. Will they grasp it?

Will our GDP growth help us lick our persistent poverty? The irony that high growth may make little impact on the excluded is a monumental human tragedy. Apart from a choice-based education system,the best antidote for this crippling ailment of our country is quite simply to make the NREGS more efficient and less corrupt. Throwing up our hands that the state delivery system in India cannot be reformed is an unacceptable cop-out. Attempts to amend the Right to Information Act to deprive it of its teeth must be resisted by all of us very forcefully. That is the only weapon the citizens of this country have against corrupt bureaucrats and venal politicians. A second initiative which needs to be seriously considered is the launch of an NREGS equivalent in small towns and cities. Let’s face it: in urban settings the force of casteism gets dissipated; people are able to breathe the liberating air of a city; the media are much stronger in cities and that will force greater transparency and efficiency in monitoring the outcomes of our efforts. A National Urban Employment Programme is the need of the hour. We can create social assets in our cities and towns. Who knows,we might just be able to build virtually new cities. Manmohan Singh should note that all great rulers of antiquity founded new cities and embellished existing ones and one of their motivators was to create job opportunities for their people. For a ruler who is not interested in increasing his family’s wealth by corrupt means,one hopes that kind sentiments will prove an adequate incentive.

Are we going to destroy our environment and convert Bharata’s legacy into a desert? We need to heal the ravages inflicted on our land not because some busybodies in Copenhagen tell us to do so. We need to preserve our forests,our mangroves,our glaciers,our rivers,our reservoirs,our plants and our wild-life because without them we would have succeeded in scorching our earth ourselves. To revert to Sanskrit,this would be a tragic “swayam-krita aparaadh”,a self-inflicted wound. A well-equipped Forest Protection Force that can resist loggers as well as poachers,massive incentives for rain-water harvesting,investments in solar technologies,for after all we are blessed with so much sunlight,are all called for. In addition,we must remove the distortions that make matters worse. Subsidised kerosene is holding up the development of solar lanterns; subsidised fertilisers and pesticides are poisoning our earth; subsidised electricity and diesel are encouraging us to pump out more and more of our ground-water; the absence of a plastic collection and recycling fund is resulting in the disfigurement of our country. Why o why do the Oomrah of imperial Delhi not see this?

The arrogant Yadavas dressed up a man as a pregnant woman and asked a Rishi to predict the sex of the offspring. The Rishi’s curse destroyed the Yadavas for from his womb came forth the reeds that they used to kill each other in their final battle. In the pursuit of GDP as an end in itself,in the pursuit of “super-power” status so dear to our rulers in Delhi,let us not out of the womb of Mother India bring forth unhappiness and destruction. Let us not imitate the Yadavas. One can only pray that a more benign and bountiful land will be ours at the end of the next decade.

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