Whenever I hear a politician saying that his party will fight elections on issues of development and growth rather than those that divide society, one takes that with a huge bag of salt. Whenever the youth of this country talk of growth, one is touched by the sincerity in their voices and the dreams in their eyes .
The issue really is, what is the nature of growth that we want and what are the ways and means to achieve it? In this editorial I am placing my thoughts before readers. I must admit that inspiration for this piece was a series of essays titled “Reimagining India“ recommended by a dear friend.
The world appears convinced that India has the potential to become an economic superpower, but the tragedy is that Indians are drowned in self-doubt. We have huge untapped talent. Away from Indian shores, Indians excel in universities and corporations. In the USA, Indians are number one in terms of per capita income. We must therefore believe that we have the ability to be the best in the world.
Our diffidence probably arises on account of being constantly compared with China’s growth model. If we continue to do so, we will always label ourselves as laggards. India cannot afford to grow like China nor should that be its aim. Our democratic coalition governments cannot become as ruthlessly efficient as China’s politburo nor should they aspire to be. Though we may not realise it today, the social costs of China’s economic expansion are obvious. While it may showcase its Shanghai infrastructure, many parts of China suffer from a poor quality of life and rank extremely low on the happiness index. There is a simmering discontent among certain sections of the public. An authoritarian regime, like the one in China, in a country like ours with a religious, community and caste diversity can result in an explosive situation.
While we must not blindly ape the China model, we must admit that we have made many mistakes since independence and it is time that we rethink the future. We have in the first four decades post-independence followed a protectionism policy believing that we were a defenceless lot , while record shows that with a more open global competition Indians have fared far better.
Even after the Indian economy was unshackled, there has been excessive importance to the information technology and software sectors without realising that these are tertiary sectors and their growth, has benefitted the white-collared employees while ignoring the blue-collar workforce which is in fact our strength. While GDP increased, its distribution was skewed. We did not pay adequate attention to primary sectors – manufacturing and agriculture. The emphasis must now shift. Liberalisation of labour laws and fast tracking agricultural reforms can give the Indian economy the requisite depth and breadth.
While I believe that one must guard against an undue socialist bias that our economic policies once had, one cannot ignore the importance of an equitable distribution of national wealth. While the government must get out of business it must actively invest and intervene in core sectors. For example, the government must give emphasis to infrastructure which would give impetus to business and increase spending on health and education which would improve the quality of life of the masses.
However in doing so, limited government resources must be spent with well-defined priorities. In infrastructure while it is important to have more and improved airports, the priority should be to build more roads, bridges and railway tracks. While the ultimate goal is that latest developments in the medical field should be available to the public at affordable rates, the emphasis must be on ensuring primary health care. In education while we must encourage top-class universities and technical institutions, the government itself must spend on primary education. The Right to Education Act is a beginning and not the end. While increasing spending in these sectors one must use leapfrogging techniques to accelerate the growth. It would be worthwhile to explore using the broadband to deliver educational content to villages rather than the brick and mortar method of increasing traditional schools.
Finally we must recognise the ground realities and our social ethos. Diversity is a unique characteristic of our country. Rather than attempting to iron out our differences we must attempt convert them into virtues rather than vulnerabilities. Rather than keeping power centralised in the fear that the States would go astray I believe that giving the States greater autonomy in economic policies may be advisable. If the States go their own way, competition will push the laggards to perform better. This will invigorate the States who will ensure that investment comes their way. The better performing States will attract resources. Shifting of Tata motors from West Bengal to Gujarat is a case in point. The Centre should aid the weaker States to overcome the infrastructure deficit and leave them to compete, with each other. For a long time the four northern States Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh were described as BIMARU. This is a thing of the past. Bihar is making great strides and Madhya Pradesh ranks very high in terms of various growth parameters.
These are some of the growth strategies that we need to adopt if we are to become an economic superpower. The world is convinced about the India growth story. It is time that Indians believed it!
Anil J. Sathe
Editor
