Fond parents of pretty babies in India do not appreciate admiring comments about their lovely child. They fear the “evil eye”. They prefer to be told that it is an ugly thing. So, talking up India’s achievements is not the done thing in its culture. But much of modern India lives with one foot firmly in tradition and the other in rational technological modernity. Indeed, prosperity has brought about a bold openness among Indians who now flaunt their indigenous cultural practices—vastu at the opening of new premises, checking a good muhurat for the launch of a new product and opulent displays of Ganesh in various forms everywhere. Religiosity is the latest consumer must-have.
India is confident again after—how many centuries? The old petulance about foreign successes, whining complaints about imperialist exploitation and the sneaking hunger for the smallest compliment from the feringhee stand replaced by a bright and confident outlook among Indians about themselves and the world. India has arrived on its own merits, with successful competitive firms at the global level, admiring hoards of foreigners arriving, at all times of day and night, at India’s (for a while longer) slummy airports, and billions of dollars of forex reserves.
India’s case is remarkable because it is based on foundations which few have thought suitable for rapid growth. For one, it is a democratic polity. No reform can be accelerated despite exasperated impatience on the part of visitors, since all change has to be consensual. Thus, change is slow but solid and irreversible.
Since 1991, India has had no single-party-majority government; a polity which resembled a one-party-dominant democracy such as Japan’s, is now more like France under the Fourth Republic with multiple party coalitions with as many differences within the ruling coalition as with parties in opposition. Yet there is a virtual ‘Grand Coalition’ on economic issues between the Congress and BJP, the two largest single players, while the Left is whingeing from within.
But a more profound revolution is in the perception of Indian governments and indeed, Indian society, about private business. The old suspicions that business persons were out to bilk the consumer, gang up in monopolies and not to be trusted with the nation’s welfare have been replaced by pride in India’s business leaders. N.R. Narayana Murthy, Ratan Tata, Mukesh Ambani, Nandan Nilekani and many more have become pin-up boys. The success of the pharma, IT, Bollywood and automotive industries has shown Indians that their team can play with the best and win.
India’s strengths are also India’s problems. The population edge India has over China ( how quickly the Malthusian spectre has become a benevolent rainbow!), with 750 million below 25, requires a massive amount of investment in education at all levels—primary, secondary and tertiary. The old regime boasted about its ‘socialist’ pretensions, but these meant jobs for the upper castes and neglect of health and education for those lower down. India has to make up for decades of neglect in education, which raises the question of efficiency of provision (public as well as private), and of equity since the most deprived are also the most numerous.
India’s way of tackling this—inclusion, as it is called— has been to harness the democratic processes of caste vote-banks and their manipulators in the political parties. The demand for reservation—for jobs in the public sector, for seats in universities—has been taken up by all parties. None dares lose the vote-banks. Yet, the demands cater only to those who have floated to the top of the lowest strata, the creamy layer. When most children from Dalit, OBC and Muslim families do not even complete secondary school and the education delivered by the publicly-funded schools is abysmal (as the report by Pratham, the education NGO, has shown), clearly, the political system is myopic in its vision.
There will have to be some extra effort by the deprived themselves to redress the defects of reservations. Some poor parents now send their children to private schools—not fancy Eton or Harrow types, not even the Doon School, but holes in the ground, where at least the teachers turn up every day and teach , unlike in the bulk of publicly-funded schools. There is a lonely libertarian NGO, the Centre for Civil Society, which advocates vouchers, but the self-satisfied elite is too committed to keeping education in state hands to listen.
The next step in India’s journey to the top will come when the trust in the private sector extends to the humble three-wheeler driver, the corner shopkeeper or the local private tuition college. India has many NGOs, most of whom, sadly, are suspicious of small businesses. They oppose simplification of the myriad administrative hurdles small businesses face and mouth clichés about “market failures” as they are sheltered from adversity. The time has come for the millions of private businesses to get their due. They are the real vibrant NGOs and they don’t even need foreign grants to carry on!
Meghnad Desai is professor of economics and director, Centre for the Study of Global Governance, at the London School of Economics