In his IIM-A convocation address Bimal Jalan asked the question in respect of India that everyone asks in respect of its cricket team: with so much talent, how can they be such losers?
Coincidentally, this was the topic of the first (and only) inter-collegiate debate in which I took part. The topic was 'India mucks up because that's what we are good at.' It seems fitting, 37 years on, to re-visit the question.
Mr Jalan cites Alvin Hanson, who thought that people and societies responded in unexpected ways and therefore the best laid plans of men and economists went awry. Sudhir Mulji in his recent article gave a more specific reason: the obsession with an over-valued exchange rate.
Mr Jalan's view is somewhere in-between. "Despite appearances to the contrary, there was a substantial gap between what was considered economically sound and found to be politically feasible. Economic strategy seldom reflected political or social realities or real political considerations. The administrative implications of policies were seldom considered..." That does sum it up nicely.
However, I also believe that, just as with the cricket team, we tend to be far too critical when we judge India. The truth is that on a total view we have done spectacularly well. Since I manage to read some history let me assure you, no other country can match what India has achieved in such a short space of time.
Looking just at economic indicators doesn't give you a picture of what has been achieved. The list is actually quite mind-boggling: the building of a nation in a geographic space where the notion of nationhood did not exist except in the minds of a small elite, the creation of an over-arching Indian identity that percolates to all groups below the elite, the acceptance of democracy by the latter, the huge political empowerment of non-elite groups, the creation of a middle class, getting the elites to accept institutions that have power over them.
The list is long. Remember, all this has been done without bloodshed. Does anyone have any idea of what it has taken to get to all these things that we take for granted?
In the blaze of the Chinese and East Asian economic successes, it is easy to be blinded to what the real priorities were during 1947-70. Economic development, even if you read no more than the letters of Jawaharlal Nehru to chief ministers, was supposed to more-or-less come out in the wash. That was why it was left to technocrats. It was a bit like hiring a driver -- Ram Singh, daftar chalo. It occupied no more than a fraction of the top leaderships' mental space.
And don't -- even for a moment -- think that it was easy to do what we have done. Compared to that, I have always held that economic growth is easy to achieve. It is, at the end of the day, a straight consequence of political repression -- for example, the United States had no trade unions till 1930, the United Kingdom no universal franchise till 1920 -- combined with policies that favour capital over labour. East Asia and China are cases in point.
What about the 1970s then? If most of the hard work had been done by 1972, why did we go wrong on the easy bits that should have followed? The answer lies in the context of the times. The 1970s were mostly a reaction to the 1960s and the causes of India's economic failures over the next 20 years lie almost entirely there.
The 1960s were disastrous for India. Looking back, it is hard not to marvel at how we survived the series of blows -- to national prestige in 1962 when the Chinese defeated us; to the economy during 1965-68 because of the droughts of 1965 and 1966; to security in 1965 because of the war with Pakistan; and to political stability because of the death of two prime ministers in office, that too within 22 months of each other.
War, famine, political uncertainty and economic distress -- it was a multiple whammy and it brought forth the only reaction possible under the circumstances: excessive caution and an obsession with control. India despairingly turned for succour to the one national institution that stood between chaos and stability -- the bureaucracy.
It is interesting to note that on the economic side, all the big names of today, from Manmohan Singh down, had their initiations during this period. It is no coincidence that they all share a common professional characteristic -- caution and watchfulness. That is what they cut their teeth on.
This isn't surprising because if the 1960s were disastrous, the 1970s were only slightly less so. It was only when I was translating Bishan Tandon's diaries -- he served in the PMO from 1969 to 1976 -- that I came to know what really occupied Indira Gandhi's mind-space: political survival and re-election.
There were plenty of crises, as well -- the two droughts in 1972 and 1979, the latter the worst in a century; the two oil price increases in 1973 and 1979; the 1974 inflation; and the mother of all crises, the Emergency during 1975-77.
Nor were the 1980s all that much better. There was the Punjab crisis, the assassination of Indira Gandhi, the Bofors scandal which paralysed Rajiv Gandhi, the drought of 1987 and of course, in 1991, the assassination of Rajiv Gandhi. The 1990s have had their share of crises too -- balance of payments in 1991, Ayodhya in 1992 and running throughout, Kashmir, political instability and massive fiscal stress.
People tend to get impatient when I trot this list out. They think of them as alibis for failure. Such a view is facile to the point of being nonsensical. Unlike in China and East Asia where prime ministers and cabinets view their jobs as CEOs of companies with very little political content, the job of an Indian prime minister is 99 per cent political. It has to be, in a country like ours. To ask him or her to be like the Chinese or East Asian counterpart is like asking a general on a battlefield to attend to rations.
Having spent the first 50 years settling the really big issues, India seems ready now to deal with economic issues. My bet is that in the next few years -- regardless of who is in power and who claims credit -- India will achieve growth rates that are comparable to those in China and East Asia.
The real capital is in the bank. Now it will start yielding returns.
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