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.

Photo credit: Dushyanthini K.

With the capture of LTTE’s makeshift capital Killinocchi, and the group in retreat in Sri Lanka, the sectarian war in Sri Lanka seems to be coming to a head. 

The conflict between the majority Sinhalese and minority Tamils is a complex, worrying one, and looking back, language has played a substantial part in it. Its always been difficult to build peace when a country has multiple ethnic populations who speak different tongues. There were many former British colonies that faced this challenge after independence -  Sri Lanka, Singapore and of course, India.

Language is a pretty natural fracture for communities. India had come face to face with this reality early on, when the post-independence government proposed making Hindi the official language. The Delhi government only retreated and accepted both English and Hindi as official languages when massive protests erupted in the South (especially in Tamil Nadu, where riots broke out and students burnt effigies of the ‘Hindi demonness’). Singapore also chose English, a neutral tongue, as the official language over the local Malay, Chinese, and Tamil tongues.

Sri Lanka however, took a very different tack. The government replaced English with the majority language Sinhalese as the official tongue, and marginalised Tamil. Of course, this wasn’t the sole reason for the conflict, but it only intensified it. Language after all, seems to be a core part of our identity - we only need to look to Ireland’s attempts to revive the Irish tongue, the resurrection of Hebrew in Israel, and in India, the early (and successful) fights to have our state borders drawn according to language.  

I sat down for an interview with Nitin Pai, the young, dynamic editor of Pragati, who also blogs at The Acorn. The talk we had was fun, long and involved, thanks in large part to a very thoughtful questioner.

Nitin: How would you define India’s national interest? When we posed this question to Jaswant Singh, he said it was the preservation of the resilient core of Indian society that is the heart of India’s national interest, because it is Indian society that keeps the wheels turning whatever is the political structure of the state. According to K Subrahmanyam, India’s national interest is to ensure high rates of growth, alleviate poverty and ensure good governance.

Me: Anything that we can do to make the country stronger, more equitable, more secure, more fair and which can truly leverage the extraordinary opportunity—that would be the national interest. The definition of Indian society is amorphous and is prone to multiple interpretations. My view is that it is very rare that nations get an opportunity to lift a billion people out of poverty. And due to a confluence of events that I have described in my book, we have a truly extraordinary opportunity that comes once in a millennium. It is in our national interest to make the most out of that opportunity and achieve economic independence and fulfilment for all our citizens—doing that would automatically address the other challenges that we have.

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When I attempted to chart the ideas and policies India needs to ensure stable, long-term growth, I was keenly aware that we have always responded best in crisis. Indian economists and policy analysts remarked to me time and again, of our lethargy unless we are faced with economic disaster. Our 1991 reforms were pushed through as the country teetered at bankruptcy, and after we had mortgaged our family jewels – our gold reserves – for emergency loans.

Since the global financial meltdown that began in September this year, there has certainly been a keen sense of urgency to frame better, smarter policy and regulation – an urgency that is visible both globally and in India. I am not happy about the meltdown – the world is almost certainly headed for a rocky, tumultuous  period. But this now widespread sense of urgency might be the  one silver lining during these  turbulent times .

For India, this does not come a moment too soon. Our reluctance to push a reform agenda  of expanding access has resulted in large and growing disparities when it comes to the opportunities available in India’s  economy. Good education for example, is  only accessible to the children whose families can afford private schools, and coaching classes to get into the top institutes. Public-funded education that the rest of India’s children rely on, on the other hand, is a miserable failure, with dropout rates over 90% despite initiatives such as the mid - day meal and the Sarva Shiksha Abhiyan. The result of this are children and teenagers who make their living as street hawkers, construction workers and factory labour. The unfairness of this is overwhelming. 

Such disparities in access are all too visible across the country, and have greatly limited class and income mobility across India. While infrastructure in urban India has begun to show tentative progress, farmers lacking roads connecting them from their villages to markets have to rely on corrupt networks of middlemen to sell their crops. Transporting their produce across vast distances without cold chains means that they lose over a third of what they grow due to spoilage. Across rural India, caste relationships still hold sway, limiting the opportunities for backward castes and Dalits to own land and start businesses – to date, India has not seen a single major Dalit entrepreneur. Migrants who leave these harsh livelihoods and come into cities find that finding a home is a distant dream outside the slums that form urban India’s fringes, its messy and chaotic boundaries. Most of the poor in both the slums and in rural India lack reliable electricity and water supply, and the people who can afford it resort to private solutions in the face of such shortages – they buy their own generators, live in gated communities with private security, and use private sources for water. 

When our markets seem ineffective in terms of providing widespread access, people turn to other solutions. As a result, India’s markets exist alongside a complicated structure of subsidies, loan waivers, hand-outs, tax exemptions and government sponsored jobs and reservations. And people who have watched the economic boom from the sidelines, see these concessions as their best options, and  are hostile towards markets. 

In fact, the global financial crisis that has erupted underlines why our issues of access may be our most critical challenge. Across countries, we have seen a populist backlash against markets when they have failed to address crises around access – such as in Europe during the 1920s and 1930s, and more recently in large parts of Latin America. Even the US, a country that supposedly holds the values of the free market close to its heart, is seeing a new rhetoric and anger against big business as income inequalities and unemployment rise across the country. It shows how easily a country’s economic mood can change – since the financial crisis has required  over one trillion dollars of US taxpayer money to bail out American banks even as millions of houses across the US are foreclosed, even the staunchest free-market believers are expressing hostility against Wall Street. Governments clearly ignore such challenges of inequality at their peril. Without more reforms to create access, India’s entire  progress will totter.  For those Indian leaders ambivalent about reforms and who believe that they have only led to creating rich businessmen, now is the time to catch the bull by the horns and promote the reforms that drastically expand access to opportunity in education, jobs, incomes and markets for all.

When I first told people that I was writing a book, most assumed that it was a memoir of my years at Infosys. There was some bemusement, even consternation, when I told them that I was writing a book on India.

Could someone like me contribute to the discussions and debates on India’s future? In retrospect, I can say that I had some advantages. As an entrepreneur from a ‘new economy’ company, which largely lay outside the state’s complex regulatory system, I was a bit of an outsider to Indian industry when it came to the challenges of doing business in the country. Neither of course, did I belong in government, although I had participated in various task forces and policy committees. This, I like to believe, gave me a unique perspective on both markets and the state in India.

I was also fortunate in being able to talk to a variety of people – economists, policy experts, NGO activists, bureaucrats, politicians, entrepreneurs, journalists – about their various ideas for India. And what struck me time and again, is the vibrancy of ideas and solutions that exist for sustainable growth. There is no dearth of new, interesting answers for our problems.

Why then, do our challenges seem so intractable? We are an emerging economy, making waves in the global market, but the numbers of our poor are still staggering. We struggle to provide our citizens with basic levels of education and healthcare. In many parts of rural India, infrastructure is nothing more than a distant hope – we have villages with no roads leading out, and villages with mobile connectivity but without electricity, where people have to walk miles to the nearest town just to charge their phones.

I believe that much of India’s challenges come from our divisions. The Indian state has long championed the country’s ‘unity in diversity’, but in reality, our diversity has also meant that we are a fractured society, split along the lines of caste, religion, region and class. As a result, our politics have long been a politics of our divides rather than one driven by ideas or solutions.

However, there is a chance that this has begun to change. I think that the most effective answer to such politics is creating a ’safety net of ideas’ that can weather political storms and divisive rhetoric. If such ideas become popular across large numbers of voters, no government can survive by simply mining our resentments, and without addressing these issues.

Already, we can see a set of such core ideas that have gained traction in India post-reform. The English language for instance, was once a favourite target among politicians who wanted to whip up regional passions, and some state governments even banned the teaching of English in schools in the 1970s and 1980s. But with the rise of India’s markets and the growth of our outsourcing sector, the tongue has become a language of aspiration, and political parties have found that a hostile stance towards English is deeply unpopular with voters. We have seen a similar shift in how Indians view our population – once seen as a burden, now viewed as a strength – our entrepreneurs, and the role of technology, globalisation, and democracy. These ideas have arrived in India, and have helped drive the story of our growth.

There are other ideas however, that remain in limbo – such as education and infrastructure reform, which despite their popularity among voters, are difficult to implement thanks to weak systems and ineffective governments. And at the same time, ideas such as labour and university reforms are still deeply divisive, with no clear answers in sight. And finally, there are the issues that are critical to our future, but we haven’t yet begun to debate – such as our health, environmental and energy issues.

I discuss these various kinds of ideas in the book, and intend to do the same on this blog – I believe that an open, involved debate on these issues that will provide us some clarity on India’s future, and help us shape an effective, sustainable path for growth. Do join me in this debate.