Atanu Dey On India's Development

Happy Independence Day

Happy 60th Independence Day!

My analysis is one of hope, potential and possibilities. Although political freedom was achieved 60 years ago, economic freedom is still a distant dream for the majority of the population. It is understandable why political freedom is easier to achieve relative to economic freedom. The entire population of the nation has an interest in political freedom — with very rare exceptions. But there are factions within the country that oppose economic freedom because they have a vested interest in the perpetuation of a command and control economy. Yet without economic freedom, the nation is unlikely to achieve its potential.

John Kenneth Galbraith in an interview to Outlook in 2001 said, “that the progress of India did not depend on the government, as important as that might be, but was enormously dependent on the initiative, individual and group – of the Indian people. I feel the same way now (as I did some forty years ago) but I would even emphasise it more. We’ve seen many years of Indian progress, and that is attributable to the energy and genius of the Indian people and the Indian culture.”

A limited degree of liberalization in the early ’90s (thanks to the then prime minister PV Narasimha Rao) led to enormous and widely celebrated achievements by the people of India. If a little bit of economic freedom could achieve so much, with greater liberalization one can expect the eradication of persistent and chronic poverty.

I think that the three most broadly defined critical sectors where liberalization is a must are infrastructure, energy and education. Currently they are the brakes and they have the potential to be the engines of growth.

Energy independence is possible. India has to think beyond fossil fuel because that is a limited horizon fuel, mostly imported, and the competition for the limited resources will intensify with the growth of global demand. Fortunately, India is very large and is in the semi-arid tropics and therefore blessed with sunshine. Solar power research and development is costly but the paybacks are enormous because once developed the technology has immense returns on investment. India can be a solar power superpower.

Infrastructure can gain from privatization. Roads, ports, airports, and railroads. I think the emphasis has to be on a modern efficient fast rail transportation system. First, trains run on electricity. That means that the system is independent of the source of energy — you can generate electricity from wind, solar, coals, gas, oil, or whatever. The same cannot be said of air transportation. Cars can run on electricity but cars need roads and roads are not the most efficient compared to rail.

Finally education. The world of the past was essentially static compared to today’s world. Innovations and advancements are happening at rates that are accelerating. Current rate of technological and scientific growth means that every year more progress is made than was made in a couple of decades in the last century. A centrally controlled education system could have served a limited purpose in a static world but in a dynamic world it is impossible for the old education system (developed 300 years ago by the Prussian government) to meet the current challenges, to say nothing of the totally unknown world just a few decades hence.

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  • Michael

    What about population control? I know it is not centrally controllable and it is a by-product of education, but it needs to be emphasized as well.

    As you said in one of your previous posts, we need to develop without growing.

    -Mike

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  • http://valluvar.blogspot.com shiv

    Inland water transport. This has been lobbied out of existance from the road transport mavens. There are huge areas that can be covered by inland navigation. Chennai had an excellent system with the adyar river basin as well as the buckingham canal. These have systematically been derated and turned into sewers. Pound for pound there is nothing to beat water surface transport for bulk materials cost wise.

  • kiran kumar

    According to me Indians has to develop in some minor areas to become a superpower. Youth and children’s are main Deciding power of any nation.So we have to become Honest,selfless and work hard to build our nation strongly.We need grate leaders like Gandhi and Abraham linkon to lead nation without any dark marks.We have to stop corruption disease from our country.Politicians are dictators so they should be selfless and they have to work hard for it.

  • sarah

    hi :]