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A story of private success and public failure: Unless it fixes its institutions, India will not become a developed nation in 25 years
In April 2011, I was invited by the Arab Spring movement to present the India Model for Egypt’s future. They asked me three questions: How did you keep the generals out of power? Two, how did you become one of the fastest growing economies in the world (and a global outsourcer of IT services)? Three, how did you create social harmony in the most diverse place on the earth? They wanted to know how India had managed to have such a moderate Muslim population.
Building blocks of lndia's success
The three questions point to the three key attributes of a successful nation – democracy, prosperity, and social harmony. And they are a good starting point to assess India’s performance after 75 years. The first question really is, how did we become a democracy? I think we were lucky because India was founded by saints, our ‘liberators with clean hands’, as Andre Malraux puts it. Even the army held them in awe. Jawaharlal Nehru, however, deserves the most credit for embedding democracy and the rule of law -- an exceptional achievement among post-colonial societies. We don’t have to look far. Pakistan, next door, is called ‘an army with a country.’
Unfettering the economy
The answer to the second question is economic reforms. After our disastrous socialist years, India finally got its act together in 1991. Since then, every government has reformed in a slow, stealthy manner, and even slow reforms have added up to make India the world’s fastest growing economy. As a result, almost 500 million people have crossed the poverty line, and there is a rapidly growing middle class. If India continues to grow in the next 25 years at the same pace as the last three decades, we can look forward to an India at 100 where the lives of the vast majority will be at ease.
The idealistic Mr Nehru had wanted a caring, socialist society but the bureaucracy gave him a command economy, a License Raj, which took away our economic freedom. It is difficult to blame Nehru – he was a product of his age when everyone was a socialist. One must blame Indira Gandhi, however, for not changing course when Japan, Korea and Taiwan had already shown the way. Although she ruled in the name of ‘garibi hatao’, she made no dent on poverty. We are rightly critical of the Emergency but forget that India sacrificed two generations in missed opportunities prior to 1991. When individuals blunder, their families go down. When rulers fail, it is a national tragedy.
As to our IT revolution that filled young Arabs with envy, it occurred because of two factors: One, software was invisible. It landed on the customer’s computer via the telephone, thus escaping the clutches of the ‘License Raj’. Two, there was unusual collaboration between a unique trade body, Nasscom, and a few rare government officials, who quietly, unheroically cut red tape, opened opportunities, shepherding the infant industry to glory.
The minorities question
The third question of the Egyptians reflected Arab Spring’s fear of radical Islam. They explained that 12% of Egyptians were Christians and they didn’t feel secure. At the same time, 13% of Indians were Muslim and they did feel secure. As a result, India has had stability, which has brought masses of investment, jobs, and prosperity. I didn’t have a good answer that day but the question made me think. I have realised that the threat to India is not from the outside, from Pakistan or China, but from within. It will take only a few thousand insecure Muslim youth to join global Islamic terror, and it would quickly undo all the gains made by the nation.
I do not believe the Arab Spring folks would ask the same question today because the average Muslim in India no longer feels secure. It is not only about showing compassion and protecting minority rights, but smart it is smart security strategy to ensure that the Muslim population feels secure.
And yet, there is much to be proud of India at 75. We have remained united despite so many predictions of our breaking up. We are a confident and hopeful people like never before. Average life expectancy has risen from 32 years to 70 years. Literacy has gone up from 12% to 78%. The extremely poor (defined by $1.90 income per day) has declined from 70% to 21% in 2011. 90% of the people have access to electricity versus 50% in 1995. I could go on and on. Unlike so much uncertainty that besets other countries today, India remains stable and predictable. Investment is coming back and economists project India will be a major contributor to world growth in the coming years.
The unfinished agenda
Having said that, India could have done better. The key failure has been our inability to provide quality education and health care. It is not for the lack of money. It is poor governance: one in four teachers is absent illegally in a government primary school and only one of the two present is teaching. Less than 10% teachers pass the Teachers Eligibility Test. The recent Partha Chatterjee scam explains this. Similar statistics describe government’s primary health centres.
India’s greatest challenge is bad governance and weak institutions. Why should it take 15 years to get justice? Why are two-thirds of the persons in jail still awaiting trial? Why am I afraid to go near a police station? Why do one third of India’s MPs and MLAs have a criminal record? Why does a highly effective bureaucrat get promoted on the same day as an ineffective one?
The truth is that India at 75 is a sweet and sour story of private success and public failure. India has risen from below, through the energy and ingenuity of its people, almost despite the state. It is quite unlike the top-down success of East Asian countries, which was steered skilfully by the state. Unless India fixes its governance institutions, it will not become a developed country.
Gurcharan Das, September 13th 2022