Imagining India

As you may have heard, I’ve been appointed as the Chairman of the Unique Identification Authority of India. I’m grateful for all your congratulations and best wishes.

In my new role, I can no longer comment on government policy. So this means the end of this blog. The blogging format was new to me, and I greatly enjoyed writing here and listening to your thoughts these past few months.

Many people have asked me why I accepted this appointment. I have long been a champion of a reform approach that is inclusive of the poor, and in my book, I described unique identity as one of the key steps for achieving this goal. Giving every individual in India a unique identification number can go a long way in enabling direct benefits, and fixing weak public delivery systems, giving the poor access to better healthcare, education, and welfare safety nets. When Prime Minister Manmohan Singh offered me the opportunity to head the UIDAI, I saw it as a chance to help enable ideas I have supported for a long time.

Or is this a temporary upswing in sentiment for much of the world economy?

Paul Swartz, from the Council of Foreign Relations, recently put up an interesting chart, comparing the recession’s effect on world trade, compared to other downturns.

When the results were out, there were many people around the country who heaved a sigh of relief.

A few months before the elections, when I asked people I knew who was likely to win - the people I questioned included elected officials, writers, NGO workers, political scientists - a good majority of them were pessimistic about seeing a strong government in power, and especially a Congress or BJP-led one. ‘Our days are numbered’, is how one Congress worker put it. A large number of people suggested (and this was a popular expectation in our media) that caste-based and regional parties would have a bigger clout post-election. ‘The next government will be a hodge-podge, and they’ll move quite sharply to the left,’ one senior policy planner guessed.

The Congress’ win is forcing a re-evaluation. Were the compelling factors for the victory the Employment Guarantee Program, concern about defense, a desire for a more empowered government, or dynastic appeal? People seemed to have voted for stable, equitable development. Its been pointed out that the Congress and its allies did well in places where the NREG Program and the rural electrification scheme were implemented effectively. The win/loss pattern across states is also telling: the UPA did badly in states where the opposition governments have been effective in bringing about development and growth - this included Bihar, Chhattisgarh and Gujarat.

Does this mean that the hand-wringing over voters’ preferences for caste and regional alliances was misplaced? I think so.  The rise of markets means that there is much more at stake for voters today - good governance and better access to the economy can bring about substantial improvements in jobs, income, and education for children. This wasn’t the case pre-1980, when opportunities were much fewer.  Voters are therefore far more demanding of their leaders, and and a failure in governance makes them far less sympathetic to the fact that a certain party is supposed to represent their religion, or caste.

So what will the government do with its expanded mandate? Will we get to see a smart mix of reforms and welfare policy? Will the government finally, attempt to tackle our broken subsidy systems and education reform? The next few years are going to be very interesting.

A few years ago, I visited my alma mater IIT Bombay, my first visit in decades. I walked around the campus and was astonished and saddened by its collapse - the buildings were in disrepair, the hostels grimy and stained, the infrastructure was crumbling: the place, it seemed, was falling apart. 

This began my efforts to get the campus back to the green, beautiful, well-tended place I remembered, and I funded various initiatives, with the help of the incredibly engaged director, Dr. Ashok Misra. I funded the renovation of my old Hostel 8, the setting up of a school for IT and a new IT incubation lab. The IIT management and I also co-funded a brand new pair of hostels to expand the cramped residential spaces, and these were built in record time—in less than two years. 

The result? Annoyance in the HRD Ministry, and questions from the then HRD minister on why such ‘lavish’ buildings were built.  Our top colleges and universities suffer tremendously from this perpetual second-guessing from the government and the bureaucracy, which demand permissions for the most mundane operations. Dr. Nayyar, the former vice-chancellor of Delhi University, often bemoans the complete loss of independence for the faculty, deans and senior management at universities. ‘Their actions hang on the utterances of our politicians. Everything is political.’ And in the midst of all this, the very purpose of the university, educating the student, has been entirely forgotten.

In recent years, Indian universities have seen a growth of funds from budget allocations, but they need much more than that for things to change. Simply providing our universities with more money is rather like buying new furniture for a condemned building.  Unless the government takes to more serious reforms - appointing a super-regulator to replace the present, confusing array of bodies from the AICTE to the UGC, encouraging more private investment on colleges and loosening the red tape on their entry, bringing in more transparency to standards and college administration, and giving government-aided institutions much more independence - the decay will go on, without pause. 

In Cry for Freedom, former Wuhan University President Liu Daoyu is talking about the Chinese education system, but much of what he says about the early education crisis in China could have been said verbatim, for the present challenges in India’s higher education system. 

Particularly, this: 

“we must lift the screws on people’s minds and tap into their initiative and enthusiasm.”

Most of us have noticed the gradual politicisation of India’s colleges over the last few decades, but we rarely debate how insidious the effects of this are on innovation in higher education. The lack of independence for our vice-chancellors and deans, the politicisation of student unions, the dependence on the government for budget and spending approvals - all these make our universities risk-averse, dogmatic, and finally unable to fulfil their main function: equipping their students to function effectively, and productively, in the economy.

Consider how rigid our colleges are: in India, we have still not embraced the concept of cross-disciplines. An Indian student from year one in college, can either do an engineering or a commerce degree. In fact, he does not attend a university in the true sense; he has to function within the narrow confines of a specific department. Universities in Europe, US and increasingly in China on the other hand, allow students the flexibility to choose their subjects, even switch between majors if they find that their interests have shifted to say, marine biology rather than medicine by the second year. 

The rigid system that our colleges now use do students a disservice. How for example, can a student be certain that she wants to become a software engineer unless she first takes a few courses? Perhaps, the student might discover a bent for research, or for computer graphics. Its unreasonable to lock someone in at the age of eighteen, right out of school, onto a particular career path. 

(This is the first of some higher education posts. I’ll follow up with more thoughts.)

I spent the last month traveling in the US, promoting the book. I did some TV shows, spoke to newspapers and did so many radio interviews that eventually it felt like one long period of time spent talking. It was interesting to meet so many people, and get the perspective of so many readers. (I am also grateful for the exposure I got - its not easy for writers to get media coverage for their work, and I was very fortunate). 

Used as I am to traveling though, I think this is one of the shorter breaks I’ve had back home in Bangalore before its time for another long trip. This time, I’m off to the UK for three weeks, in part to promote the book, but also on work. But I will keep updating here.

Reservations for backward castes in our jobs and colleges have become a seemingly indispensable part of our politics, and I think the big reason for this has been the process of inclusion of India’s backward communities into our mainstream. Indian political scientists such as Ashutosh Varshney have pointed out that as the Industrial Revolution took off in the West, backward communities were rapidly absorbed into the growing economy and the expanding factory system. The right to vote and political clout came later, after decades of urbanized living and jobs.

But in India, our progress has been the other way round. In a country where growth stagnated for decades, and development has only recently begun to make inroads into the rural countryside, backward communities have had access to political power before economic power. Hence the demand for reservations - the Dalit voters who support the Bahujan Samaj party for instance, see political power as ‘the master key’ that will open all doors.

Had economic access come first, we would have probably followed the pattern of other countries that had  caste hierarchies - Japan for example, had a fairly rigid caste system, and the most backward group, the burakumin, were highly ostracized. Development and urbanization however, helped absorb these caste groups into the general population (although the Japanese burakumin still face some discrimination). The rise of cities in fact, have been particularly powerful in dissolving caste barriers, as it becomes impossible to observe the silly notions of purity and untouchability in the anonymous, crowded city.

This has made our struggle in India with caste and backwardness fairly unique. And as our politicians balance the questions of better access for all versus more reservations, we are likely to see many more twists and turns on this issue.

The meme that the global recession might finally have bottomed out could be a little premature. Markets, including in India, have revived somewhat, but many are sceptical that this rally will last.

Also, if the steps taken in the US to deal with the financial crisis are not ambitious enough - and it looks increasingly likely that this is the case - we will see the financial crisis deepen a lot more before world markets recover.

Observers of the G-20 summit - whose tagline ’stability, growth, jobs’ acknowledged our ongoing global slowdown - didn’t expect much to come out of the meeting. Since it ended however, a wave of positive press has followed. One good thing that has come out of it is that the IMF is likely to change its composition to reflect the power of emerging countries like India, China and Brazil. There is also some applause surrounding the fact that leaders have pledged around $1.1 trillion towards fighting the recession, but of this, $500 billion is through the IMF, and half of that money was in the works before the meeting. 

Another big question is how exactly will such a money stimulus boost global growth. I’m somewhat sceptical of the ability of state-provided funds to drive extended growth in markets, if they are not accompanied by policy changes. Money flowing into an inefficient, badly regulated market system only strengthens entrenched interests and makes existing lobbying groups stronger and better-funded.

The Indian government for instance, has already funnelled stimulus money into the economy in 2008-09. without adding in policy corrections, and much of this cash has been aimed at extended  credit through already existing farm schemes (which typically favour farmers who own mid to large landholdings) and financing for existing SMEs and industry groups, while doing nothing to make business easier for new or innovative firms who struggle even more for capital and against red tape in a weaker economy.  Downturns and growth slowdowns cannot be patched with notes of cash alone - these will only drive cycles of boom and bust.