The Feel Of Modern India Coming Into Its Own

Cut to the independent republic of India circa 1947, and we can see Socialism, Soviet style Five Year Plans, the Licence-Permit Raj, The Mixed Economy, Non-Alignment. All this produced no more than 2% growth on a miniscule base of around $250 million. This stunted India’s stature. 

Apologists say it laid the foundations of the fledgling republic, with its heavy industry and institutions of higher learning. But capitalism, as in Singapore, that joined the party only in 1962, would have no doubt done better, and faster. President Lee Quan Yew often shook his head at the waste and folly he saw in a country with the potential of India.

Capitalism was anathema to our early leaders. It was tainted with memories of the laissez-faire East India Company, and later the British Raj with its pillage, loot, monopolies, destruction of local craft, industry and enterprise. 

It was only after India went bankrupt in all except name, that a drastic change was made. India dumped a lot of the old economic order in 1991. This was under dictation of the international lending agencies which handed in a non-negotiable to-do list to the Government of India. However, then Prime Minister PV Narasimha Rao was not unhappy. A veteran Congress politician, learned, erudite, he had been looking for a politically acceptable way to break out of the ideological shackles.

After the changes made, the day-to-day situation in India, previously riddled with Soviet style shortages and shoddy goods on a take- it-or-leave-it basis, change beyond recognition. For the first time India began to see 9% growth rates.

India may not wear socialism on its sleeve anymore, nor lecture the rest of the world on its virtues, but it is highly committed to welfarism.  This has gone beyond the slogans of the early decades into solid gains towards the elimination of hunger, disease, illiteracy. It has delivered connectivity, basic utilities, housing and sharply reduced numbers below the poverty line.

Meanwhile, China had already been producing double-digit growth from the 1980s. This, after radically altering its attitude to capitalistic methodology. That it is once again going down-hill, is a consequence, in part, of its revival of hard-line Communism and chronic indebtedness.

Cut again to 2021 India, thirty years on when India has a $3 trillion economy. Observers in the developed world see India’s new dynamism and liken it to Europe during the Industrial Revolution, or America in its pioneering frontier days. There is a new tonality and aspiration that is very refreshing. In addition, India is an acknowledged thought-leader and agent for global peace, plenty, and responsibility. It agrees to help retard climate change.  It wants an end to terrorism and expansionism.

Mark Mobius, a legendary billionaire global investor, says India has entered a 50-year bull market, and can expect 9% growth year-on-year for the half century. This, even as China is in decline. He has put most of his emerging market investment into Indian stocks. Mobius is not the only one, though his bold prescience is notable.

There are now many clean breaks with the past. Our infrastructure on land, sea and air is looking at providing for the next three decades. Modernisation and digitisation is being pushed hard. What was never done before is being attempted in multiple fields. India has stopped looking on itself as a poor country of low per capita income and teeming millions.

Instead, it is relentlessly getting on with the job of emerging as the third largest economy in the world. Of course, having 1.4 billion people is both a blessing and a curse. However, no economy can thrive on the backs of only well-to-do people. Europe and America have long realised this. Immigrants, eager to do the lowly paid jobs, have been vital.

India, thanks to its fecundity, does not have to look at this in policy terms for at least thirty years. However, the presence of over 2 crore illegal Bangladeshi immigrants tells the essential economic story. They not only meet their own need for livelihood, but to a certain extent, rising material costs apart, do their part in holding the line on inflation.

India is also erasing the poverty-stricken continuity with its colonial past. Physical structures such as North and South Blocks and the round present-day parliament building will soon become museums. The new, expanded Indian Railway networks are supplanting the superannuated British outlay. The Victorian era railway stations are fast disappearing and giving way to modern structures on par with the best in the West. The inter-city and inter state highway systems are removing transportation bottlenecks.  The airports and airline scenario is replete with choice and more than a little competition. Old PSU behemoths are being closed down, merged, or privatised. Even profitable ones such as the monopolistic LIC and ONGC are being partially sold off. Air India was the first large unloading of a storied airline piling up heavy losses. But clearly it will not be the last.

Bureaucrats, for long years beyond accountability, have been instructed that they cannot move files beyond four levels and that too transparently and digitally. Acres of redundant government files and other obsolete junk have been sold to raddiwalas.

Once the ‘Fabled East’ meant Bharatvarsha, richest in the world, bulging with gold and jewels. ‘The Middle Kingdom’ was no match. India also had its palaces, temple architecture, universities, city planning, drainage and wisdom that stupefied early visitors from the West, the East and Arabia alike. But nobody calculated GDP then. Besides, Bharatvarsha was a region, much bigger than it is today, populated by many independent kingdoms.

The present renaissance however, promises to leave fabled India behind. It will see India to a $ 10 trillion economy and more with a combination of domestic demand, aatmanirbhar manufacturing and services, and exports.

China, long plaguing India via proxies and menaces, could break into an open attack. The question is, can it win? Despite this existential risk, this is definitely a good time to be an Indian.

(993 words)

13.11.2021

For: Firstpost

Gautam Mukherjee