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turnoftortoise.png The big question staring India is whether we are ready for the future? Given its strengths what is it that this country needs to do differently. It is the third largest contributor to world growth with a two trillion Dollar market. In his first book — THE TURN OF THE TORTOISE: THE CHALLENGE AND PROMISE OF INDIA’S FUTURE — renowned journalist T N Ninan believes like the proverbial tortoise, India is now finally in a position to reach some of its long-sought-after goals having made steady progress for years. He provides a compelling overview of the emerging trends of politics, the inescapable Chinese shadow over India as well as the relationship between the state and the people. He wonders if manufacturing can be made a success story and who and what the Aam Aadmi really is and if possible put an end to real poverty. Above everything else the crucial issue is whether this country’s turn has finally come? Ninan explains in his straightforward style where India stands today and the prognosis over the next decade. He looks at the country’s future after carefully studying a mountain of complex data and statistics.

Given India’s size and confusion coupled with its failures and frustrations, the soft spoken author believes “”this country has held together quite well and its record has been rather good. It could have been much worse.”” Giving a clear picture is difficult as India is messy and complicated. Interestingly this book comes at a time when China is slowing down, its workforce shrinking, and its economic model going through wringing change — but also when it is asserting itself abroad. How India performs at this juncture will determine many outcomes. The author refrained from betting that India will be ‘shining’, as a government did hoping in vain for re-election. What is true though is that the country is well positioned to reach for some of its long-sought-after-goals like the slow moving tortoise that at long last sees some end points in sight. It would of course be ideal if India steps on the accelerator. But the important point is it does not have to do anything out of the ordinary or seek to become what it is not. It has just to keep making steady progress over the ground to be covered. It is not too much to ask for which is why it may happen.

It is the poorest large national economy with the lowest per capita income among the forty large economies that account for 90 per cent of the world GDP. This will change only slowly. India is full of potential. Rapid economic growth by a catch up country means that many products and service markets can grow in even the short space of a decade, in multiples, not just in percentages. Poor countries also function suboptimally, so opportunity comes in a package deal that includes many challenges. The combined market value of companies listed on India’s stock market has grown from $ 125 billion in 2002 to $ 1.58 trillion in 2015. The dramatic growth of the mobile phone industry is a result of an enabling policy. Much of the recent record of economic growth is on account of reform measures announced in 1991. Government policy and action have certainly been factors contributing to the success stories. India has suffered grievously from failures in the policy area but it has coped because of long years of steady growth combined with the development of educated manpower to create a substantial market of the growing middle class and neo middle class.

These have proved to be semi autonomous drivers of domestic investment and magnets for global firms. Bharat is about to become the seventh largest economy in 2015. It has the potential to become the fourth largest by overtaking Germany, Britain and France. A $ 2.3 trillion economy growing at seven per cent annually would make India the third largest contributor to world economic growth, and it could retain that position in the foreseeable future. Government policy should be simple and focussed. India has found it difficult to introduce the kind of reforms it now needs. If the required changes are introduced there is no reason why annual growth of eight per cent and more should not be achieved rivalling what Rapid Growth Asia managed to do in the 1980s and 1990s. The downside risks are not to be dismissed lightly since the country has already witnessed a plunge from 8.9 per cent growth to 4.9 per cent in two short years of 2012-13. What went mostly unreformed in 1991 and later were the four factor markets. This was not for lack of trying because governments have been constantly obsessed about policy issues relating to land and labour. Both are intensely political subjects.

The clash of strong interest groups, the failure to apply clear principles and the role of intermediaries seeking to protect their positions or to cash in on insider advantage, all of these have kept the rules complicated and unsatisfactory.Meanwhile, both productivity and incomes will go up substantially if more people can be moved from low paying agriculture to higher paying industry and services — a key transition that the country has barely begun. At the same time acquiring job related skills without the benefit of basic education is a challenge. The employment challenge gets more complicated than simply developing the manufacturing sector especially since increasing automation and new technologies will not only make manufacturing but also software services and back office work less manpower intensive than hitherto. China has started moving out of some labour intensive industries because its wage costs have risen substantially in the wake of rapid economic growth

A rough rule of the thumb wages in India would appear half of those in China. As principal failures have to do with policymaking, there is too little of government attention paid to core areas like law and order, education and health — too few judges, too few teachers who teach, too few hospital beds; also too few trade negotiators and too few policemen especially those with proper training. Important lessons should be drawn from the experience of the last six decades. The cold truth is that the tasks taken on by the states, viewed in their entirety, are beyond the capacity of the Indian state to deliver. The limitation is that private players can replace government companies, not the government itself. There is no one in Indian politics who actually believes in making governments focus on the essentials alone and shed the rest. One of Prime Minister Narendra Modi’s slogans was “”minimum government, maximum governance””. Nothing that he has done in the last one year as Prime Minister suggests that he will minimise government or address serious administrative reforms. His broad approach has been as interventionist and maximalist like anyone else. Defensive response or failure to reform at home in the new scheme of things merely weakens the country’s hand abroad. China has learnt that lesson well; India has not, emphasises Ninan. Finally, there is the question of whether the country’s constitutional liberalism will gradually give way to less-than-liberal democracy. That is the major worry and the Modi government needs to put such widespread apprehensions to rest. That is a million Dollar question? A highly absorbing and must read book.

TR

(T R Ramachandran is a senior journalist and commentator.)
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