Sunday, July 24, 2011

20 years of economic reforms and boom. And yet so much angst......

We are the world’s 2nd fastest growing major economy. We’ve been growing at a scorching pace for 20 years now. The Indian economy is booming, and yet, ironically, it is at this time that there appears to be a peaking of the angst levels of people in the country. A government which has been primarily responsible for delivering this economic performance is at the receiving end of a lot of abuse. It is facing perhaps the only genuine fast-unto-death (from a self-proclaimed Gandhian Anna Hazare).....that independent India has seen. Are we Indians right in expressing our anger so strongly at a time when we are actually doing quite well? Or are we just being too harsh on ourselves? Is this genuine criticism or is this just a different form of political opposition to the ruling government?

The naysayers are already baring their swords. Poverty is still hovering around 30%. Illiteracy is rampant. Our farmers commit suicides in the hundreds each year. Terrorism is growing. We are soft towards our neighbours. Our ruling government has a policy of appeasing the Muslims. There is crony capitalism. There is corruption everywhere. A person visiting India from Mars and reading the newspapers and watching the TV channels here would feel India was a sub-Saharan economy struggling to survive. And yet, nothing could be further from the truth. In reality, India has never seen better times. The poverty is declining rapidly (@ 1% per annum). Literacy rates amongst the under-20s are upwards of 90%. There is some degree of crony capitalism, but the economy has created a lot new business families in the last 20 years than existed historically (there was no Sunil Mittal or Narayan Murthy before 1990). Is this just a world of extreme negative propaganda that we are living in which certain vociferous elements of the population dominate media with their colored views? One in which media joins hands with political opponents of the ruling dispensation to sensationalize every problem and play down every success? Do our common people feel the same way about the country?

Of course there is a lot left to do. But 60 years is a short period of time in the life of a complex heterogeneous country like India. I find most people of today’s generation to be ignorant of India’s history post independence. A reading of Ramachandra Guha’s “India after Gandhi” should be made mandatory for such cribbers. It was widely believed after independence that India would split up into many fragments. Had it not been for the vision of Nehru and the solid administrative capabilities of Patel, that would have indeed happened. There were more than 550 princely states who the British had given the option of becoming independent and not aligning with either India or Pakistan. It is only because we had some outstanding politicians and civil servants that we were able to keep them all with us. There were three princely states which proved to be particularly difficult to convince. Junagadh and Hyderabad eventually were addressed......but Kashmir was the one that remained unsolved.....largely because of its strategic location.....between the two newly founded countries of Pakistan and India. The problems that India faced then have not been faced by any country before. The British had left us as paupers. We had no industry to call our own. Those who complain against the socialistic model we adopted then, those who deride our five-year plans, may want to keep in mind that there was no private industry worth its name that could carry on the onerous job of nation building. That was the government’s job. Our people were uneducated; steeped in orthodoxy. Casteism was rampant. We had a language problem that almost made the South secede. Until 1965 or so, the South was not even sure that it wanted to be a part of India. Unread cribbers have no idea how important and......almost unbelievable to achievement just staying together as one country was. Those who compare our first 50 years with smaller East-Asian countries – or at least one reader has compared us with Israel (don’t ask me why) – have no understanding of issues. Those in awe of China compare India with China. Even this is wrong – people forget that China was always one, united and monolothic nation under one emperor – while India was just a conglomerate of various princely states. That’s why the invading Englishmen found it easy to capture India but were unable to capture China. Further, what exactly did China achieve in its first 50 years????

That’s why those who complain about India’s achievements should first read a bit of history. Admittedly, the period between 1970 and 1990 could have been utilized better, but then in hindsight, they say vision is 20:20. Everyone now knows that socialism had run its course and we could have adopted market reforms much earlier. China beat us to this game by a decade. Their economic reforms started in 1980.....ours only in 1990.

Since 1990, there has been no looking back for India. The economy has become much stronger and if we continue on this path for 20 more years, we will become one of the world’s top three economies. The Economic Times yesterday (Sunday) did a good story titled “The numbers tell our story” where it shows several economic variables and how they have moved in the last 20 years. The GDP in 1990 was some $300 billion. Today, it is upwards of $1.5 trillion. We used to get almost zero FDI then; last year, we got $30 billion. Our forex reserves were $6 billion then, they are $300 billion today. We had half a million telephone users then; we have 860 million today. We used to sell 1.8 lac cars then; we sold nearly 3 million last year. We had 9 million air passengers then; we have 57 million now. We had no IT revolution then; today, we are one of the world’s fastest growing IT economies. Our electricity production has increased from some 250 billion KWH to nearly 4 times that now. Any way you look at it, no one can complain about our economic growth in the last 20 years.

I am surprized that reminding people of these growth statistics is even necessary. Our success story should have been written about and talked about all around. But then there is so much cynicism inside our country. People outside India call us an economic miracle. People inside would like to call ourselves a failed state. People outside call us the most vibrant democracy. People inside would like to throw out democracy if they had a choice (but not knowing what to replace it with). People outside want to see India play a more important role in climate change, in the reform of the global economy, in ensuring peace.....People inside feel we have become puppets in the hands of outsiders. It’s indeed ironical that during the tough economic times of the past, we cribbed much lesser; today, in the midst of high growth, we are cribbing a lot more.

But this happens in all countries. As they progress, people demand more and more. In the US, a similar movement called The Progressive Movement was seen in the early twentieth century. The US had already become a very powerful country by then; but it was riddled by corruption and for almost 30 years until the 1920s, the “progressives” challenged the government of the day, bringing in transparency, women’s suffrage, modern thinking and efficiency in governance. The good thing was that they did all this in a way that made their country stronger. Never did it reach a situation when it felt like all was lost. That’s the difference between their movement and what we are seeing today. The way the discussion in India is going these days, it appears that we want to throw out democracy. If we had our way, we would jail ALL politicians and civil servants. What then? No one seems to have any solutions. No one wants to address the root causes of the problems that we face. It seems that the solution to every problem is one: the Lokpal Bill. Will the Lokpal (and there will be thousands who work there) be manned by people from a different gene pool? Will they not also become corrupt for the same reasons that most Indians have become corrupt? No one seems to care.

The reason it’s important to care is that if we remain critical all the time, we will spread a high degree of negativity in the country. I would like people – even critics of the present government – to stand up an applaud what we have achieved in the last 20 years. There is nothing wrong in cribbing.....but cribbing all the time, and never appreciating never helps anybody.

The real truth is that I worry about what is going on in our country. I worry that we will ruin our chances of gaining global economic (and political) strength because of intense internal bickerings and self-criticism. I worry that we will let politics get the better of every important debate. I worry that instead of reforming our systems, we will create an environment where a dictator could take over. I worry that we are so less grateful and so extremely demanding, that we will push out even the few good men and women that are still there in government..... In short, I worry that we will throw out the baby with the bathwater.

(Yeah yeah.....let the cribs come in.....I can handle some more of those!)....

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