Commentary/Dilip Thakore
Time for a decisive break from past economic policies
This column is being written on India's Independence Day. Forty-nine
years ago, the Union Jack -- the symbol of British supremacy over
360 million Indians -- was pulled down and the newly independent
nation's tricolour was hoisted to fly over the ramparts of New
Delhi's Red Fort.
For independent India and for the world in general, that was a
very significant moment in history. For it not only signalled
the emancipation of 360 million cruelly short-changed Indians
from the overt injustices and million petty indignities of imperial
rule, it was the decisive moment which marked the beginning of
the end of the British empire and the dawn of a new age of global
decolonisation. Despite the ominous carnage of the partition of
the subcontinent, independent India set sail upon an ocean of
global goodwill fanned by favourable winds. When Jawaharlal Nehru,
the nation's handsome first prime minister, spoke about free India's
"tryst with destiny" he struck an emotional and aspirational
chord in the breasts of free Indians and well-wishers of the proud
new nation state all over the world.
There were, however, some high eminences who were sceptical about
the future of the newly independent nation and in particular about
the calibre and quality of the men and women who had emerged as
the rulers of the world's most populous democracy. Foremost among
them was former British prime minister, historian and war hero
Winston Churchill, who was of the opinion that granting independence
to India was tantamount to handing the fate of over 300 million
Indians to "an oligarchy of the lawyers, politicians, fanatics
and greedy merchants" who would ruin the nation and let loose
the tide of anarchy within the population.
Almost half a century down freedom road, there is a growing number
of people in India as well as abroad who are beginning to believe
that Churchill's apocalyptic vision has been vindicated.
Not that there aren't any entries to be made on the credit side
of the nation's freedom ledger. Despite the inevitable stresses
and strains of regional and linguistic subnationalism, free India
has remained united and, if anything, is even more closely integrated
than ever before. More creditable, it has evolved into a fairly
mature democracy in which the ballot has triumphed over the bullet
and even self-confessed authoritarians have consistently respected
the verdict of the electorate. Never before in human history has
such a heterogeneous population remained so faithful for so long
to an egalitarian ideal.
But then there is the debit side of the national ledger. The entries
are many and tell a pathetic tale of misgovernment, missed opportunities,
and worse. The obverse side of post-independence India's failed
development effort is a sordid tale of great betrayals and petty
intrigues and ambitions which have deprived hundreds of millions
of the nation's citizens of the basic necessities of civilisation
and have condemned them to a nasty, brutal, and perhaps too long
an existence.
There is a school of thought within the Indian intelligentsia
which, with some justification, decries breast-beating about lost
opportunities and about what might have been. This school advocates
positive thinking about the future and favours letting bygones
be bygones in the national interest.
Undoubtedly, there is more than some substance in the power of
positive thinking. But isn't history all about learning from the
mistakes of the past? And what lessons can we derive from the
study of history if we choose to bury the truth and the magnitude
of the great betrayal and self-serving machinations of a small
class which has reduced the modest hopes and dreams of over 500
million citizens of post-independence Indian to bitter ashes?
The plain historical truth is that eight grandiose five-year plans
which promised the people a land of milk and honey notwithstanding,
contemporary India is one of the poorest nations on planet Earth
with a per capita annual income of $330. This pathetic per capita
income compares very unfavourably with the per capita incomes
of Thailand ($2,600), South Korea ($9,000) and Singapore ($23,000), nations which were as poor and backward as India was in 1947.
It can be argued that per capita income is not an accurate measure
of national development because it links national currencies to
the US dollar and is not reflective of the purchasing power of
local currencies. To answer this argument, the United Nations Development
Programme's economists have prepared the concept of purchasing
power parity dollars (PPP$). Even after adjustments for the purchasing
power of national currencies, India's annual PPP$ 1,150 compares
unfavourably with Thailand's PPP$ 5,270 and South Korea's PPP $ 8,320
(1991 statistics). In the UNDP's classification, India is classified
as a 'low human development' nation and ranks number 135 among
the 173 nation-states assessed.
Unfortunately, even the poor PPP$ capita income statistic does
not adequately reflect the true magnitude of deprivation and poverty
in India 49 years after the nation attained its independence in
a blaze of glory and great expectations. According to the Bombay-based
Centre for Monitoring the Indian Economy, 70 per cent of India's
900 million people make do without any sanitation facility, 49
per cent without electricity, 76 per cent without brick and cement
houses, and over one-third of the population of the major cities
resides in squalid, dehumanising slums. And the most damning statistic
of all is confirmed by the latest Human Development Report of
the UNDP: 49.4 per cent of the adult population (including 74 per cent
of the female population) is wholly illiterate.
Little wonder that 78 per cent of the nation's reproductive conceptions
are unplanned and that the population is growing by 15 million
per year, accentuating the shortage of the already scarce resources.
Half a century after it attained Independence, the nation finds
itself in a deep, dark hole from which it can dig itself out only
with superhuman effort.
And because these stark realities of the failed national development
effort are insufficiently highlighted by the media and are glossed
over in public discourse, there is a casual gradualist attitude
even within the new generation of reformists which is shaping
new development policies. Common sense should dictate a decisive
breakout of the suffocating framework of past policies which have
plunged the republic into the deep hole in which it is mired.
Yet, despite five years of the supposedly radical economic reforms,
the stranglehold of socialist dogma which has devastated this
once high-potential nation and scotched the modest dreams and
aspirations of an estimated 800 million people, has not been broken.
For example, not even one of the chronically loss-making central
and state government owned public sector enterprises in
which over Rs 5,000 billion of the citizens' savings have been invested
has been privatised. These enterprises have realisable assets whose aggregate
value is estimated at Rs 10,000 billion. If auctioned
on a global basis, they could realise enough capital receipts to
retire a substantial percentage of the federal government's massive
public debt (interest payment in fiscal 1996-97 is budgeted at
Rs 600 billion, almost half the federal government's
annual budgeted revenue of Rs 1,300 billion) and provide sufficient
resources for massive investment in primary education and human
resources development.
But fearing a backlash from the Left, a decisive break from the
comprehensively discredited public sector-led development model
has not yet been attempted notwithstanding the stark reality
that in Russia, from which the Indian left derived its inspiration
for all these years, 16,500 public sector enterprises were privatised last year. And while
most of India's myriad enterprises continue to haemorrhage, private sector
industry is being bled by tax and waste. Central and state governments
remain unwilling to reduce their current account deficits despite overwhelming
evidence that a significant proportion of their revenue is being
misappropriated by scamsters within their administrations.
In the milestone 50th year of India's independence, it is now
time to honestly acknowledge that several grave errors of judgement
were made in the formative years of the republic. Such honest
acknowledgement is the prerequisite making a new and determined
national development effort.
But such a national admission and development initiative will
have to be led by the nation's educated middle class and intelligentsia.
For it was this very class -- and not the subaltern political
class with its brand of divisive particularist politics -- which
won India's freedom from British rule. And until the educated
middle class is persuaded (through electoral reforms and enforcement
of the rule of law) to re-enter electoral politics and once again
work for the greater good of the greatest number, the gains of
political independence will continue to remain illusory for the
overwhelming majority of free India's unfortunate citizens.
Dilip Thakore is the founder-editor of Business India and
Business World and former eidtor of Debonair.
|