Chanakya's New Manifesto: To Resolve the Crisis Within India (5 page)

But in the case of India, this natural affinity for the polity of the rulers, based on familiarity and exposure, was reinforced by the strong ideological conviction of our leaders that democracy must be the foundational political framework of the new Indian republic. After centuries of servitude, they wanted all the people of India to be assured certain inalienable rights guaranteed by the Constitution as well as the ability to have the right to choose their representatives through universal suffrage. By 26 January 1950, when our new Constitution was adopted, this was achieved, and the first general elections took place in 1952.

The mere adoption of a Constitution, and the functional apparatus of a democracy, does not, however, automatically ensure that a democracy will work. For instance, we know that it did not in many other newly independent nations that also initially announced their resolve to be democratic. Pakistan—and later Bangladesh—in our own region, illustrate this vividly, as does Myanmar, and there are a host of countries in Africa, Asia and Latin America that started out as democracies but then fell prey to authoritarian regimes. The fact that in India the democratic experiment survived must remain one of the seminal achievements of our republic. Undoubtedly, the cumulative ideological legacy of the freedom movement, and the personal commitment of Pandit Jawaharlal Nehru, who fortuitously remained our first prime minister (PM) for seventeen years after 1947, played a crucial role in this.

There were other factors at play too. For millennia, Indian society had been rigidly stratified. It was not easy for this hierarchical frame of mind to give way to a new egalitarianism. In the initial years of Independence, democracy caught the imagination of the powerful, the entrenched elite, not for the new values it symbolized, but for the possibilities it opened up for the consolidation of the old.

Notwithstanding this blemish, the very fact that democracy survived led to certain consequences which could hardly have been visualized when the first ballot boxes were set up in 1951. The foremost of these was the gradual but genuine political empowerment of the weakest and poorest sections of the populace. When the great democratic experiment began, the vast members of the poor remained quiescent vote banks, manipulated by the upper castes and the already entrenched. But after dozens of elections, the weakest realized that power could flow in their direction too from the ballot box, and this emboldened them to work for their own interests. This shift in power was nothing short of a revolution for a hermetically sealed society like India. The most concrete proof of its success is the fact that in the country’s most populous state—Uttar Pradesh—we have had, in recent times, a chief minister who is a Dalit and openly professes to represent her hitherto downtrodden community.

Today, no one can doubt that, apart from the fortunately short-lived aberration of the Emergency imposed by Indira Gandhi in 1975, India is the world’s largest functioning democracy. Democracy has given Indians an institutional framework for the exercise of political choice and the freedom to express dissent. This has acted as an indispensable safety valve in an inequitable milieu with great discrepancies in the distribution of power and wealth. We have elections where hundreds of millions vote; the electoral exercise is robustly supervised by a strong Election Commission(EC); besides the gift of democracy, we have been endowed with an independent judiciary, a vociferously free media and a bipartisan civil service. The political executive is answerable to Parliament; and Parliament is the supreme legislative body representing the will of the people. Most importantly, all the other necessary institutions are in place. We have an independent auditing authority, as also a criminal-investigating agency—the CBI—which, in principle, is free of the control of the executive. The relations between the Centre and the states are defined through the Constitution, and each has its own clearly demarcated jurisdiction. The armed forces operate entirely under the authority of the elected civil authority, and all subordinate quasi-judicial bodies have been given a clearly defined role within the overall structure of our democracy.

Another consequence of 1947 was the emphasis on planned economic development, within a broadly defined ideological framework. India in its heyday, before it was ruthlessly exploited by Britain, had been one of the world’s richest countries; at Independence, when the imperialists left, it was one of the poorest. The leaders of the freedom movement were, therefore, extremely conscious of the fact that freedom without economic growth, especially for the poorest segments of our people, would be incomplete. This was the ideological basis which motivated Nehru to focus from the very beginning on setting up the Five Year Plans. He, and his colleagues in the government, were almost visibly impatient to get the economic machine moving and, indeed, considered this to be the biggest challenge before the new republic. Optimistically, they genuinely believed that now that freedom had come, India would regain its pre-colonial primacy as one of the world’s great economic powers.

The thinking was for the big rather than the small. Nehru wanted large steel and engineering plants to dot the Indian landscape, and referred to them as the new ‘temples’ of the country. There was a sense of national celebration when projects like the mammoth Bhakra Nangal Dam were commissioned. The public sector, as the chosen vehicle for the State’s vision of an industrially resurgent India, first became entrenched in this period, and not without verifiable benefits. There were obvious shortfalls in productivity, and the inherent inefficiencies of a state-run sector were visible almost from the start, but much needed infrastructure was created which, in the absence of scarce foreign exchange, helped promote self-sufficiency as an almost autarchic goal in itself.

The dominant notion that India must never be at the mercy of an exploitative power like the British was the underpinning of this insular but probably relevant approach in the context of its time. Perhaps the disproportionate preoccupation with industrialization was partly responsible for the continued underperformance of agriculture. This should have been a major concern as the majority of the population still subsisted off it, including the poorest. For almost two decades after 1947, India was dependent on food imports to feed its own people and this must have been galling for the first generation of our leaders.

However, the Green Revolution of the mid-1960s dramatically changed this situation. Norman Borlaug, an American agricultural scientist, developed high-yielding strains of cereals, and India, with the help of its agricultural research institutes, of which the one on Pusa Road in New Delhi was one of the first, was quick to adopt it. The result was that for the first time, perhaps in three centuries, India experienced a quantum jump in agricultural productivity, and moved confidently towards becoming a food sufficient nation.

Another significant development was the growth of small and medium industries in the private sector. It was government policy to provide financial and fiscal incentives to small-scale enterprises, albeit with chafing regulatory mechanisms. Overall industrial growth, low but consistent, had provided a generally enabling environment. The nationalization of banks by Indira Gandhi in 1969, which made capital available for the first time and on a national scale to a large community of entrepreneurs and traders, was a facilitating factor. The outsourcing and sub-contracting resorted to by larger firms diversified the opportunities available. But over and above all these factors stood the pioneering skill and tenacity of the pioneers, who made good in spite of asphyxiating red tape and an extortionist bureaucracy. Between 1978 and 1996, almost half of all factories that started production were in the small-scale sector; the number of products exclusively reserved for the small-scale sector rose from 128 in 1971 to 844 by 1981. By the mid-1970s the small-scale sector had grown to within striking range of contributing almost half of the country’s total industrial production. And the significant point is that its profitability was often higher than that of the corporate sector.

Poverty, though, was still pervasive. It was this, coupled with the then ascendancy of the Soviet Union (which, given Nehru’s professed leftist leanings, became our preferred developmental partner) that made socialism the guiding credo of this period. Irrespective of whether the State actually achieved its professed objective of substantially alleviating poverty, the accepted premise was that the government needed to be interventionist in favour of the poor, and conversely, less accommodating in catering to the interests of big business. This bias needs to be seen in perspective—it may not have been practical economically-speaking, but it was an understandable response from a nation that had received as part of its inheritance mass poverty and deprivation.

This is not to excuse the licence-permit-quota raj that was spawned by the ‘socialist economy’. But phases in the developmental history of a country must be seen in the context of their times. By the late 1980s it was obvious that the economy was stalling, and in 1989 the paucity of foreign exchange brought India to the brink of defaulting on its international debt. The advent of Dr Manmohan Singh in 1991 as India’s finance minister was responsible for the definitive reversal of this humiliating situation. A technocrat picked by Prime Minister P. V. Narasimha Rao from outside the conventional political system, his appointment is proof that when the time comes India can work for renewal and change within the existing system.

The new finance minister, with the full backing of his PM, made sweeping changes to the structure of state controls, and dramatically opened up the Indian economy to global exposure and competition. For the first time since Independence, India dismantled its antiquated protectionist barriers and created the space for the inherent talent of its entrepreneurs to come into play. The results were nothing short of dramatic. From the pathetic ‘Hindu’ rate of growth of 3 to 4 per cent, the economy began to average sustained growth closer to the 8 per cent mark; foreign direct investment multiplied manifold; long-held monopolies faced up to international competition for the first time; new entrepreneurs mushroomed; the consumer was suddenly faced with a multiplicity of choices and goods that compared favourably with global benchmarks; foreign exchange reserves swelled. It was genuinely, a new economic spring.

The reform measures introduced in 1991 have held the country on a steady growth path in the decades since. Several key sectors of the economy, including automobiles, pharmaceuticals, construction and telecommunications have undergone a virtual revolution. Mobile phones, which were the preserve of a handful of the rich until the mid-nineties, have found tens of millions of new users every year. The financial sector has seen a dynamic makeover, one symptom of which is the exponential growth of the credit card industry. And knowledge industries have become a distinguishing feature of India’s economic profile.

India made its advent on the global stage as an information technology (IT) power at the turn of the millennium. Computer firms began to sprout overnight, and for once the government was quick on its feet and invested in computer schools and training institutions, and introduced and upgraded IT-related courses. Sensing the monetary possibilities, private training institutes began to proliferate. Multinationals began to body shop in India’s technically-trained bazaar. This was not surprising because by now, the country’s 291 universities and 12,000 colleges were producing two million degree-holders a year. Of these, 120,000 were engineering graduates, and the figure approached a million if the products of polytechnics were taken into account. Software exports touched $10 billion in 2002; between 1999 and 2002 the IT industry grew by more than 50 per cent per year. The global economic recession after 2001 put a brake on unrealistic expectations, but major IT firms like Infosys still notched up very high growth rates. A simultaneous development was the emergence of IT-enabled services (ITES) and business process outsourcing (BPO), covering activities such as call centres, transcriptions, geographical information systems, and consulting. It was in this period that almost every major multinational opened back offices in India.

With all these developments, the size of the middle class burgeoned. By some estimates, almost thirty to forty million people joined the middle class every year. Significantly, poverty levels fell dramatically too—by 10 per cent—in the decade since the economy was liberalized in 1991. Of course, the numbers of the poor still remain unacceptably high, and it is valid to say that a lot more could—and should—have been done on this count. However, just as a matter of perspective, it is useful to bear in mind that the number of people in India who have been rescued from absolute poverty in the six decades after 1947 is more than the entire population of Europe; although it is equally true that more people are still abjectly poor in today’s India than the entire population of Europe.

A third legacy of 1947—and one of crucial importance—was the emphasis on the creation of a secular society. Despite the overwhelming numerical strength of Hindus in the country, all Indians of every religious persuasion have the freedom to practise their faith; everyone is equal under the Constitution. Such a categorical approach had its origins in the freedom movement where Gandhiji’s implacable belief in ‘sarva dharma sambhav’ was an article of faith. In Nehru, Gandhi had a staunch follower, and though their personal approach to religion differed—Nehru was a professed agnostic and Gandhi believed in all religions—the PM’s stewardship of the country’s policies in the sensitive early years after 1947 was pivotal. In fact, Nehru believed that coexistence of religions was the only viable option for India, and he held on to this belief unwaveringly in spite of the volatile emotions released by the bitterness and violence of Partition. In 1947 itself, in a letter to all chief ministers, Nehru stated the proposition bluntly: ‘We have a Muslim minority who are so large in numbers that they cannot, even if they want to, go anywhere else. They have got to live in India. That is the basic fact about which there can be no argument.’