There is currently an air of expectation about India’s future prospects both within the country and even more so abroad. We are surely on the move. The new century, it is said, will see India emerge as a global player because of its structural advantages. Some of the major ones are, for example, a young population with its promise of an expanding workforce and rising savings; established institutions, which have weathered the vagaries of a boisterous democracy and gathered strength; a dynamic and large entrepreneurial class that simply does not take “no” for an answer; a vibrant and independent media that is beginning to rediscover its social purpose of enforcing accountability; a traditionally strong value for education; an ability to adapt to changing conditions; and a benevolent geography that so far has shown tremendous resilience against gross misuse, but may be giving up now. The danger, however, is that these structural advantages, combined with our predisposition for believing that the future is “predestined”, can generate a dangerous level of complacency and inertia. This fatal flaw could not only lead India to perform below its true potential, but to even move towards chaos, conflict and disaster.
These alternative possibilities for India’s future emerge most sharply when we attempt to outline future scenarios as was done by a joint team of the Confederation of Indian Industry and the World Economic Forum in 2006. The team generated three scenarios, and none of us could foresee that outcomes under each of the scenarios for India in 2025 could be so radically different. In the best option called Pehle India, the country fulfilled its promise and raced ahead with rapid, inclusive and globally integrated growth to eliminate poverty and emerge as one of the major global powers. The worst scenario called Atakta Bharat had India stumbling along at low growth rates with worsening equity, persistent poverty and growing isolation. Atakta Bharat expectedly also saw increasing social and political stress, resulting in the fragmentation of the country. Having presented the worst scenario on several occasions, I came to realize how eminently possible—though obviously unacceptable—this outcome could be. The principal aim of this column will be to ask the more difficult and uncomfortable questions to try and provoke us out of our complacency and the easy option of taking our destiny for granted and thereby preventing the worst outcome from being realized.
The scenario-building exercise sharply brought out the critical difference between the best and worst outcomes: the quality of governance and implementation of the next round of reforms. This crucial difference between the two scenarios provides the raison d’etre for this column. Here we will persist in making the case for necessary reforms and their implementation. We will not allow our democracy to become an excuse for political inertia or bureaucratic callousness. This is informed by the belief that reforms in this country—with its thankfully open society, competitive democracy and hyperactive fourth estate— cannot be undertaken by stealth. Reforms have been successfully undertaken only when they were backed by poplar opinion and had captured a hegemonic position in people’s thinking. This is true of the adoption of the Mahalanobis model, or the switch to capitalist farming under the Green Revolution, or giving a greater role to the public sector after 1969, or the liberalization of the late 1980s and early 1990s. The truth cannot be further away from the myth that is unfortunately quite widespread: that the 1991 reforms were thrust upon us by the International Monetary Fund and the World Bank. The period leading up to July 1991 had seen a range of our top economists, journalists and even civil servants, across a range of political and ideological persuasions, arguing in favour of dismantling the plethora of dysfunctional controls and licences. Reforms followed when the battle of ideas had been decisively won.
Today, we again need a similar discussion and debate on the need for and the nature of the next round of reforms. The absence of such public discourse and pressure is responsible for reform Bills continuing to languish in Parliament and the ruling establishment getting away with inaction and even sliding back. This is despite the clear demonstration of the huge benefits that reforms have generated for common people, as in the case of the telecom sector. We need to, therefore, intensify the public discourse on the necessity of such reforms and in the process take on some holy cows and bust some well-worn myths. One of them, for example, often heard in industry conclaves and from leaders of large industrial house, is that India can grow despite its government. We will, perhaps, start by exploding this myth in the following weeks. In short, this column will focus on making the case for reforms that benefit the people and on the need to have these reforms rooted in the Indian reality to be effective.
Rajiv Kumar is director and chief executive of the Indian Council for Research on International Economic Relations. These are his personal views. Comment at email@example.com