When the American government envisaged a fully developed
economy and a society with equal rights for all, the forefathers of the nation
introduced measures that laid foundation for a long term success. To begin
with, America introduced patent laws where intellectual property was preserved by
the authorities and subsequently rewarded. If your patent was approved and the
government foresaw potential, you would receive grants to pursue the idea and
convert it into a business. You could even sell your patent to already
established businesses in return for large sums. The whole process encouraged
entrepreneurship, invention and a deep trust in the system. Mind you, this process started over 200 years
ago and I don’t need to go into how many successful businesses have come out of
the US since then. Both socially and economically, all of these successful
ventures have been the architects of the American development story. Another important measure that America
introduced was expansion of the Banking industry. More local banks meant lower
interest rates which helped people start small businesses and also purchase
their own homes and lands. Again, this whole process encouraged
entrepreneurship and trust in the system which are key to the development of
any society. Equal efforts were made to invest in research programs where
government offered grants to promote knowledge rather profits.
Now India is at the cusp of another general election and
many feel this is a watershed moment in the Indian political system. A new
government would solve all the ills afflicting the society and finally bring
much needed economic growth and prosperity. The talk may have shifted to
developmental from communal politics; the vision of every party remains
archaic. Citing the US model of development, no one in Indian politics realizes
or talks about how important entrepreneurship, banking and education are to a
long lasting robust economy. Grant of patents to Indians to foreigners is
roughly at the ratio of 1:9 and as a result, ratio of Indian patents to foreign
patent is also roughly 1:9. India may have expanded the banking sector in the
recent past but personal loans still come at over 13% interest rates. In an
already developing society, how do you expect the people to pay back the loan
with such high interest? Government’s investment in education is extremely low
and private companies face a huge red tape to enter. Most of the institutions
are opening up for the sole purpose of profits without motivating individuals
to invent or create a knowledge base for the society.
Now is there a party that wishes to address such fundamental
flaws in a system? A long ruling Congress party is presently the butt of all
jokes and will most likely be dethroned by another equally incompetent party,
The BJP. The party led by a very astute marketer and a narcissist, Narendra
Modi, is currently all hype and no substance. Mr. Modi spends 90% of his time
ridiculing congress and perhaps only 10% on his vision. I can’t even count five
policy measures he has mentioned in his speeches (many factually wrong) that
would turn India’s fortunes. His vision is simply the Gujarat model, a state
which doesn’t always rank in top 3 of India’s most developmental indices. Gujarat
currently ranks at #9 for GDP per capita income and I need not say more about
its development compared to other states. Moreover, one is yet to see the trend
where Gujaratis have stopped migrating to foreign countries or on the flip side
where Gujaratis are flocking back to Gujarat anticipating greener pastures. Mr.
Modi has talked about skilled based economy thereby promoting education that
equips you with employable skills. A very good approach to solve the current
unemployment problem but it will only be a band-aid solution that will fizzle
out in the future when other countries, through research and innovation, advance
with superior ideas and technology. You will continue to chase your tails.
The same BJP party came to power in 1998 and lost in 2004
despite showing good growth in the economy. One may ask why? The answer lies in
its jobless growth and a growth that marginalized the poor and left them
behind. I often wonder how Indians living in the west equate road
infrastructure and tall buildings to real development. When you don’t have a
toilet to defecate every morning, what good does a nice 4 lanes highway do for
you? I am afraid same will happen again if a right wing party is voted to power
which on the outside is pro investment but has no vision for the relegated
sections of the society. I am the first one to admit that the strong economic
development through privatization and foreign investment are paramount to
eventually supporting the poor but if that’s the ONLY agenda, the development
will come at the cost of abandoning few generations and those people don’t
deserve that. After all, lifting millions out of poverty takes many years of
concerted effort but if the society is not independent from the foreign
investment, it will continue to play the catch up game. India currently needs a
balanced approach of being a good destination for investment and creating
healthy communities right at the bottom. It needs communities where people have
nutritious diets (not just basic), proper schooling with training in computers,
clean sanitation systems and playgrounds for kids. Without all these facilities,
millions will never develop the brains and confidence to become future leaders
and successful entrepreneurs. That’s a huge burden on any society.
