[As the
Prime Minister makes another U.S. trip,
with hopes of attracting greater foreign investment, there are pressing
domestic issues back home seeking his attention, issues like poverty, hunger
and misgovernance. A ‘Digital India ’ backed
by greater FDI flows can only play a limited role in tackling these]
By Pulapre Balkrishnan
There is at least one dimension
in which the distance between Narendra Modi and Jawaharlal Nehru is
not so great after all. I speak not of their fondness for the bandgala but
of their penchant for world travel. Not a day passes without us being informed
of some impending visit by our Prime Minister. Right now, we are being
bombarded with the details of the itinerary of his visit to the U.S. later this month. He will
start, we’re told, with the annual meeting of the U.N. General Assembly and
from there proceed to the west coast.
Nehru had
undertaken this journey too, in 1949. However, we were a different country
then, having inherited a bloodily-partitioned nation with a declining per
capita income. On the other hand, India is today one of the world’s
fastest-growing economies, hoarding a young labour stock and a substantial
talent pool, making the task of its leadership a little easier by comparison.
While India must constantly engage with
the rest of the world at all levels, the rest of the world does not hold the
key to either the pace or inclusiveness of its economic growth. It is,
therefore, altogether surprising that the leader of India should travel westward urging
“Come make in India .”
India ’s unique place in world order
Before it
comes to be imagined that Nehru’s forays into the wider world had amounted only
to showcasing Indian attire, we may want to remember that extraordinary
financial inflows had been elicited then. Non-alignment brought with it an
unexpected reward as the rival ideological blocks vied with one another to
shower India with aid. Over a quarter of
the total financing for the Second Five-Year Plan was via official aid from the
rest of the world. Michal Kalecki, the astute Polish economist who was one among
many intellectuals who had made a beeline for this quickening country, had
remarked pithily that India ’s policy of non-alignment was
akin to “a clever calf sucking milk from two cows!”
It is also
of interest that Nehru had shown no particular anxiety over wanting India as a permanent member of the
U.N. Security Council, even as he thanklessly championed Communist China’s
claims. It is not known what exactly he had thought of the prize itself, but it
could not have escaped his attention that even when it was not a cabal of the
rich and powerful it could hardly count as a democratic arrangement. Contrast
this with India ’s desperate attempts today to
gain membership of this discredited club. But of course the world has changed
since the fifties. Apartheid and colonialism have vanished, and China is firmly entrenched in the
Security Council, and one might say with nary a thought for India ’s inclusion.
So, one
should not expect Mr. Modi to
travel to the U.S. with
an anachronistic agenda. Yet, one may expect him to be clear of what it will
yield in relation to India ’s current priorities. An
argument is usually made out in terms of attracting foreign direct investment
(FDI) and, possibly, technology to drive the ‘Digital India’ programme.
It is
incontestable that both foreign investment and the spread of Information and
Communications Technology are very important for India . In fact, every effort must be
made to accelerate their adoption. However, on FDI, much of what can be
achieved via enabling legislation has been achieved. Further, the tariff
barrier to trade has been rescinded along with quantitative controls.
Foreign
trade accounts for more than 50 per cent of the Indian economy by now. However,
the promised gains in manufacturing are disappointing, suggesting that domestic
supply and demand conditions may be at least as important for Indian
manufacturing as is an open trade regime. It is indeed correct that FDI has
increased exponentially over the past one year, suggesting to some that this
reflects a new international confidence in India ’s economy. While the figure is
impressive it is not unprecedented. In any case, FDI accounts for less than 10
per cent of total capital formation in the country. As for the IT tsars Mr.
Modi is to meet in Silicon Valley , the U.S.-based IT industry, with its significant Indian
presence, has long ago sensed the profit opportunity in engaging with India and does not need handholding.
So it is likely to bide its time.
Altogether,
while the government is right to pursue foreign investment and technology, it
does gives the impression of not giving as much importance to other areas.
Without suggesting what these areas are, we might suggest that soon as the PM
returns from abroad he goes on a virtual Bharat darshan. He could even remain in the PMO while
travelling backwards in a time-machine. What would be the things that he will
get to see?
Domestic issues, imported solutions
He will find a farmer committing suicide inHyderabad because he couldn’t afford
medical care for his son. He will find that in Bihar , to which State he has
promised an out-of-turn special assistance of Rs. 1.25 lakh crore, the
overwhelming majority of rural households do not have access to sanitation. In Delhi , he will find a doctor of the
All India Institute of Medical Sciences (AIIMS) announce on television that
dengue is “endemic” to its population, a grave diagnosis indeed. In Rajasthan,
a State run by his own party, he would find that a senior civil servant ran an
extortion racket yielding four crores in ready rupees, thus taking the meaning
of “ease of doing business” to an altogether new level. So, alighting from the
time machine, he is likely to be struck by the thought that while ‘Digital
India’ is a worthwhile project per se, it can only be a partial answer to what
needs to be done in this vast and yet underdeveloped country.
He will find a farmer committing suicide in
The hardship
of everyday life faced by Indians has a history far older than that of Mr.
Modi’s prime ministership. It is the result of decades of misgovernance.
Resolving the citizens’ problems also involves a role for the States, where his
writ hardly runs. But, as Prime Minister he is expected to show leadership in
providing solutions to these. The least he can do is to draw attention to them,
set up bipartisan committees to propose permanent solutions, and suggest means
of financing them. The role of the rest of the world — which, it seems, looms
large in Mr. Modi’s
imagination — in
solving these problems faced by the people of India is somewhat limited.
The
technical element in the solutions is fully understood and entirely within our
capability to handle. Even the financial constraints can be overcome through
political will. For instance, should the public sector not be required to yield
a much larger surplus than it does? And shouldn’t the government plead with the
well off to give-up regressive consumption subsidies? Here, even Mr. Asaduddin
Owaisi, with his niche presence in the political firmament, has shown greater
statesmanship by reportedly proposing that subsidies for pilgrimages, mostly
undertaken by men, be diverted to educate the girl child.
Nevertheless,
we wish our Prime Minister an enjoyable visit to the San Francisco Bay Area where
a festival of ideas awaits him. He will find that though California is the home of the IT
industry, it also has a flourishing agriculture. He will find that it is a
society where diversity is celebrated — as a result of which minorities bring
their best to the table. He will find women, of Indian origin at that, in
highest public office. And if he ever travels to the headquarters of the iconic
Apple Computers, he will find that it is headed by a gay man. Being a keen
observer, he can hardly remain unaffected by these rich rewards of
freethinking. In turn, we await his safe return, hopefully rewired and ready,
at last, to govern.
(The author teaches
economics at Ashoka University . The views expressed are personal.)