HVK Archives: India's next 50 years
India's next 50 years - The Economist
Posted By Krishnakant Udavant (kkant@bom2.vsnl.net.in)
16 August 1997
Title: India's next 50 years
Author:
Publication: The Economist
Date: August 16, 1997
Speaking to India's Constituent Assembly in Delhi on August 14th 1947, the
eve of independence from British rule, the new nation's prime minister said:
We end today a period of ill fortune and India discovers herself again. The
achievement we celebrate today is but a step, an opening of opportunity, to
the greater triumphs and achievements that await us. Are we brave enough
and wise enough to grasp this opportunity and accept the challenge of the
future?
The truth is that, with one remarkable exception, the greater triumphs and
achievements that Nehru looked forward to have eluded India these past 50
years. Churlish as it seems to point it out on this anniversary, India is
further behind today, relative to the rest of the world, than it was at
independence. Now, however, it stands at a new threshold, with greater
triumphs and achievements once more in sight. Nehru's question seems no
less apt than before: how brave and how wise will the country and its
leaders be this time?
Of tigers and elephants
In what is otherwise an epic tale of wasted promise, one success of the
past half-century shines out: India remains a democracy. Despite the
legacy of colonialism, the horror of partition, the burden of poverty, and
the curse of religious and caste strife, India's democracy has lasted-and
despite being blemished by corruption, it is no sham, but real and vibrant.
Those who argue that democracy is a western conceit fundamentally at odds
with "Asian values" are refuted by the pride that Indians take in their
political freedom, and by the energy with which they express it.
For the rest, the record until recently was one of barely qualified
failure-of opportunities missed and challenges shirked. For 40 years, the
economy grew so slowly that hundreds of millions remain to this day trapped
in the direst poverty. India's governments did too much and too little: too
much trade protection, unproductive subsidy and industrial planning
(pursued in India with a surreal dedication unknown outside the communist
world); too little education, infrastructure, and law and order. Some of
this was Britain's legacy. The Raj brought in protection after 1918, and
bequeathed a civil service which, with further development, became a
remarkably effective stifler of enterprise. With time, though, India's
failure was of its own leaders' making. Governments closed their eyes to
the outside world, always telling themselves "India is unique", with
ruinous consequences (see pages is-18).
In recent years, this has changed. India's politicians-some of them,
anyway-have discovered the international economy and have even come to see
it as an opportunity. With the reforms Of 1991-93, the economy has been
opened to trade and its industrial-planning machinery has been dismantled.
Earlier this year, a liberal budget pushed the process on, with tax cuts
and renewed deregulation of the economy. These days, state leaders travel
the world drumming up foreign investment; ambitious young Indians would
rather be businessmen than bureaucrats; and when you do meet a bright young
official, he is more likely to have an MBA from Stanford or Chicago than a
PhD on Marx's theory of value from the London School of Economics.
The economy is improving. After decades of "the Hindu rate of growth"
(less than 4% a year), India's output has lately been rising at 6% a year
or more. This could continue for many years. But given the energy and
resilience of its people, India should be doing even better. The economy
is only half-reformed. if the government could finish the job by
privatising faster, withdrawing support from "sick units" and deregulating
labour markets, India might grow at a tigerish 8% or 9% a year. Then the
next 50 years, unlike the past 50, would visibly transform the lives not
just of a minority but of the mass of the people.
Will it happen? Certainly there are many reasons why it might not. These
further reforms are politically more demanding than the ones already
carried out-and India, never forget, is a democracy. Strong leadership
might help, but is nowhere to be seen. The United Front government is a
weak coalition of regional parties, liable to split at any moment. Nehru's
Congress party, a dynastic movement which governed for most of the past
five decades and whose tacit support keeps the United Front in power, no
longer seems capable of forming a government on its own. The one party
that might is the Hindu-nationalist BJP-but its victory would call into
question India's future as a secular republic more than it would inspire
hope of faster economic development.
India is at a political as much as an economic threshold. The settlement
reached at independence was more fragile than its 50 years' standing makes
it seem. India's future still turns on the question of national
identity-the problem that the agonies of partition failed to resolve, and
in many ways served to aggravate. From that unanswered question flow the
continuing demands for regional autonomy in Punjab and Kashmir; the
country's troubled (but improving) relations with Pakistan and Bangladesh,
the parts that were torn away in 1947; the BJP's strident assertion of a
religious national identity; the decline of India's only national secular
party; and the growing strength of narrow regional movements such as the
ones that make up the United Front. Can the imperatives of social and
economic advance be heard above this din of political turbulence?
Unlikely as it seems, perhaps they can. Nehru and his heirs, relatively
secure in their power, failed to deal adequately with those imperatives. So
far, the political uncertainties and instability of the 1990s have served
the country better. The benefits of economic freedom are increasingly felt.
A new constituency for further reform (an alliance of middle-class
consumers and middle-sized private companies) is growing. If India's
political and business leaders could show a little more of the bravery, and
especially the wisdom, that Nehru called for in 1947, there would be surer
and less nerve-wracking grounds for optimism.
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