It is time to reflect again on the state of the nation on India’s 67th Independence Day. Those of us who are over 50 years of age have tracked India’s ups and downs since Independence and have felt emotionally drained at times. This article thinks aloud about where we are and what could lie ahead.
To be consciously optimistic, there is better awareness at the ground level about regulatory policies, judicial pronouncements and governance. This has perhaps been one of the causal factors for the change from coalition governments to single parties being voted to power in several of our large states. Hopefully, voters are looking to get rid of coalition compulsions to improve delivery and results. This may mean, with a huge dollop of wishful thinking, that the days of identity and divisive politics will gradually be over. In Delhi, we have had coalition governments continuously since 1989. Let us hope that within the next 10 years the electorate will decide to vote for single party rule at the Centre. If there is more than one mid-term Lok Sabha election in the next few years, our younger aspirational voters may turn against fractured mandates even sooner and return a single party to power in Delhi before 2024.
On the downside, all income groups in India have long lists of grievances. Even if we discount the universal penchant for preferring sound bites over accuracy, there are several worrisome trends. For example, systemic deficiencies have reduced our export competitiveness and the economy is vulnerable to a balance of payments crisis within the next 12 months. It would be inadequate, from a risk management perspective, to limit policy steps to raising tariffs, encouraging portfolio and debt inflows and hoping that quantitative easing in the United States and Europe will not start tapering by the end of this year. It is also counterproductive to support the rupee by restricting rupee liquidity, and it would help if the rupee were allowed to drift downwards. Further, regular revelations about wilful violations of the law – whether it is graft or violence against women or the weaker sections – are not encouraging.
To analyse our shortcomings, we can use a framework discussed in Why Nations Fail: The Origins of Power, Prosperity and Poverty by Daron Acemoglu and James A Robinson. Professors Acemoglu and Robinson sound plausible when they suggest that representative politics and the rule of law enable better economic outcomes. It is evident that it is these factors that have resulted in the northern part of Nogales in Arizona (US) doing so much better than the immediately southern part of Nogales in Sonora (Mexico). In comparison, the authors’ convoluted explanations about what led to three decades of sustained high growth in China despite an absence of inclusive politics are not convincing. Trying to reach overarching cross-country conclusions on what drives growth or results in persistent underdevelopment is similar to that elusive search for the Holy Grail.
To be fair, the book is on the right track when it traces the origins of England’s rise, despite its relatively small size, to the rule of law starting ahead of others in the 18th century. India has all the trappings of a sound legal system, but our problem is long delays. We are in a sorry situation in which major legal disputes invariably involve the central or state governments as aggrieved parties and drag on for decades.
Why Nations Fail does not include the international aspects of a country’s politics in assessing success or failure. For instance, the extent to which US support, including stationing of US troops, contributed to South Korea’s better performance than North Korea’s is not discussed. The book also does not explain why representative politics and rule of law in England did not lower the efficiency of its extortionist colonial policies or exploitation of bonded labour and slaves. Inclusive policies in home jurisdictions co-existed with extremely extractive and lucrative economic processes in colonies and conquered lands in Asia, Africa and Latin America.
Can it be argued, then, by extension, that economic and innovative efficiency can survive and even prosper in isolated pockets surrounded by large areas that remain underdeveloped within the same country? Clearly, this cannot be viewed as a purely economic issue and is linked with what is just and viable in a politically inclusive country such as India. It is also difficult to assess to what extent this book is suggesting that central authority should prevail over federal structures. On balance, central control is required to push reforms and robust federalism is required for implementation.
Extractive politics and non-observance of constitutional safeguards are often evident in India. An important question for us today is whether we are slipping from the levels of probity among those holding high public office in the 1950s. Many would reply in the affirmative. What are the reasons? Perhaps the rise of partisan, sectarian or regional interests focusing on personal gains in the mistaken belief that someone else will pick up the pieces is responsible.
Is it possible for us to maintain the required balance between individual rights and societal obligations even as we seek detailed information about decision making in the government, judiciary and private sector? As in other democracies, in India too we have sharp differences on how best to reconcile shorter-term and longer-term interests. For instance, residents of irregular urban colonies are naturally focused on their immediate needs and want water, electricity, gas connections and so on. Most Indian cities are struggling to provide these utilities to existing colonies. Those living in unauthorised colonies cannot be faulted. It is just that India is urbanising much faster than planners and developers had envisaged. All this is somewhat deflating because we are back to where we started in looking for solutions. Summarised in one sentence, there are no alternatives in India to scrambling to meet immediate needs while keeping an eye on longer-term sustainable growth.
In the face of manifest examples of distrust among Indians, there is bound to be cynicism about whether we really believe in that oft-repeated exhortation from the Mahopanishad: vasudhaiva kutumbakam, that is, the whole world is one single family. Nevertheless, to conclude on a positive note, we have to believe that we can work together for an India that is consistently governed by the rule of law in our common national interest.
The writer is India’s high commissioner to the United Kingdom. Views expressed are personal.
j.bhagwati@gmail.com.
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