Atanu Dey On India's Development

Giving the Planned Perpetual Poverty of Socialism a Quick Burial

May 11, 2010 by Atanu Dey | 11 Comments

My colleague Rajesh Jain in the second part of a series “It’s Up to Us Now” notes, that “even after 63 years, India is in many senses worse off than it was in 1947. We have to understand the whys and hows of India’s failure to develop. That’s the unavoidable first step to putting India on a path to recovery. We cannot fix problems that we don’t understand the causes of, or worse yet, if we don’t even admit that we have problems.”

He asks 10 questions and writes that the search for answers to those questions “is the start for the path to reclaim India. Our so-called leaders have failed us. It is up to us now to change the course of our nation.”

• Why is India still poor?
• Why have the numbers of Indians below the poverty line doubled to more than 500 million since 1947?
• Why doesn’t India have a decent education system?
• Why are 70 percent of Indians still stuck in tiny villages in the 21st century?
• Why is 60 percent of the labor force involved in agriculture?
• Why is India’s industrial base so small?
• Why doesn’t India generate sufficient electrical power?
• Why doesn’t India have a modern rail network?
• Why doesn’t India have a serviceable road network?
• Why is India so unfriendly to business and entrepreneurship?

As I have noted before, economic development is neither inevitable nor impossible. More often than not, it is a consequence of the right policies executed sensibly by dedicated people. India’s failure to develop was not inevitable. By now, after over 60 years of political independence, India could have conceivably achieved at least middle-income status if India’s leadership had even been half-way competent. India had pretty much all that was needed to climb out of debilitating poverty, as Rajesh notes in his post.

The global conditions for economic development of a labor-surplus economy such as India around mid 20th century were as good as it gets. The advanced industrial countries had by then figured out the solutions to many of the problems that face developing economies. Economists understood quite well how the transition from agriculture to industrialization happened, how an open economy made rapid progress, how and why command and control of large economies was doomed to failure, etc. India had access to brilliant minds who would have been thrilled to help India make good policies.

Not just that, India had good-will among developed nations. They were cheering for India’s success and were willing to lend a helping hand. They would have helped but they were told to mind their own business. It must take an infinite amount of hubris to rudely spit on those who were eager to help. India’s leader at India’s independence set India on a path that led it to become a huge nations of 1200 million people, two-thirds of whom have to live on less than Rs 100 a day. Note “less than” — that means that there are a few hundred million people who survive (if it can be called survival) on less than Rs 50 a day.

Let me put that in some perspective. About 300 million people live on less than $1 a day. That’s equivalent to the population of the US. Now compare $1 to the $126 per capita income per day of the US. Imagine if you had $1 to spend on your daily food, clothing, shelter, education, health services, entertainment. Your life would not be fun.

I am not saying that Indians would have been as rich as the US — clearly that is not possible since India is very small in land area relative to the US (and land matters.) But it could have been a middle income country like say Mexico if its leader had not messed up.

But all that promise and potential was wasted — solely due to bad economic policies made by people of little understanding and even less wisdom.

India needs to change tack. To do that, India needs leaders who are not wedded to socialism that produces little, and then mindlessly redistributes the scant production. India needs leaders who understand that increased production must precede any attempts at redistribution. India needs leaders who understand that social justice is predicated on economic prosperity, and not the other way around. India needs leaders who understand that economic prosperity arises from an open market-friendly liberal economy.

The time has come for us to give the socialistic PPP model (planned perpetual poverty — much beloved of the Congress and the Dynasty that leads it) a decent burial. Like Count Dracula, the Congress-PPP have sucked India’s life blood for decades. Actually, to make sure that it is never going to rise again, what we need to do is to drive a stake through the PPP heart of the Congress, then cremate it, then load up the ashes in one of those interplanetary probes and put a warning for extra-terrestrials who may discover it in 40 million years that the contents are hazardous and should not be opened.

It’s all up to us now.

  • rb

    Atanu,

    I have been a very long time reader. I admire a lot of things about your content, and convictions. I like the tone of this message. I think that it will help people stuck in analysis-paralysis mode, if you can start writing about the most worthy ideas to be pursued by aspiring business owners, small, and big, with varying capital requirements.

    What if 10 years from now, you have continued to write your heart out, and people like me continue to read their mind out, and all of us simply go back to bed with a lot of buried potential.

    What about a dashboard of implementable ideas that you bring to market for people to adopt? Please be the leader that would have been responsible for motivating thousands of entrepreneurial ventures.

    Thanks for being there for all of us. I know that I have to do my part. Have fun.

  • http://ketanpanchal.blogspot.com/ Ketan

    LOL @ putting ashes in space.

    On a serious but entirely different tangent, I have always wondered why nuclear waste can’t be sent to space, out of Earth’s orbit. From what I know, mass of nuclear waste is not very substantial. If we could achieve this, lot of safety-related apprehensions with nuclear energy would be taken care of.

  • Surya

    India is in many senses worse off than it was in 1947

    really Sriman Jainji?

    In 60s my momused wait for beggars to take away the previous nights left over rice, with rice sold at Rs 2/kg none of that is happening since 80s, i heard my village living relative lamenting that now its impossible to find labor force to work on his rice paddys anymore and all his kids have moved to Hyderabad.

    Not in the least mood to declare India is a switzerland today, but when you see UN stats please do look at their definitions first. Ever heard of state govt paying private hospitals cash to perform surgeries etc.for the have nots?

    Our scientists, sadly, havent come up with smart ways to grow vegs, fruits and cereals etc with water efficiency and disease resistant seeds and storage methods.
    Railways- one of the most efficient systems and cheapest on the planet.
    Industrial base- MMS had lamented during his last years interview here in US that getting land for industry is the no 1 hurdle foreigners are facing. In china land belongs to govt., not to people.
    Power-most nations use nuclear energy, which was denied to india by US up until last year. Once thats available you see light at the end of the street.Happy days are ahead but mind you the population dampens every advancement in future, we need Sanjay Gandhis to control it or preferably a chinese regime….

  • larissa

    India is in many senses worse off than it was in 1947

    Yes–by the sheer fact that it has four times the population. India’s population was roughly the same as Russia’s at the time of independence. Can you imagine an Indian city with 1/4 of the people? People have overpopulated out of control. I mean can you imagine walking in an Indian city without feeling that you will be trampled over by the human crowds? That would be the case if the population did not increase at the rate it did. But quality of life for these people did not increase in any way except for the middle class. It’s the quality not quantity of the people that ultimately matters for a nation….A massive population only priduces a mass culture. Yes India is permanently crippled due to the population increase in a way it does not even realize…even if the increase has to do with porous borders, there is still an increase…One often wonders how India is a functioning nation at all given the lack of control and chaos.

  • SR

    I like your blog – have been a long time reader and fully understand where you come from. Yeah and Ayn Rand and LKY are my favorite people in the whole world.
    Believe me if curses could kill, then just my own curses would have killed and destroyed the entire Gandhi Nehru clan atleast 15 years ago – yeah and I mean really destroy as in ensure that even their other fragment genes such as Varun Gandhi, Sheila Dixit etc too are gone.
    However I think you do need to stop the negativities – your blog has a hue of ‘India sucks’, ‘Gandhis are ass holes’ etc and nothing beyond that anymore. Focus on the solutions – since you are so smart, lets have a little less of the India and its politicians are really bad and more of – ‘here is how we can improve things’ etc.
    If you stand for elections in Pune or elsewhere, I will be first in line to vote for you…

  • mg

    I’m also going to keep requesting for more signal to noise ratio please. The issues with congress, corruption, etc are well known.

  • http://csspeak.blogspot.com DChandra

    But the long and deadly shadow of Nehru is large and still present in almost all aspects of Indian life. It’s hard to bury PPP-Congress I without first burying its sympathizers.

    Ramachandra Guha for one: http://csspeak.blogspot.com/2010/05/ramachandra-guhas-comical-defense-of.html

  • TiredProf

    Might be desirable to dial down the shilling-for-capitalism a wee bit, given the current sorry circumstances. The age of ideologies is rapidly drawing to a close. Sentient people are increasingly aware that the local variety of ism in effect is largely immaterial and the best predictors of the fate of societies lie elsewhere, a primary one being education. Just check how many of Jain’s questions (including our sorry levels of education) are well-answered with “because we did not have enough educated people”. The second biggest reason is that India is not in a position to plunder the world to collect the (per-capita) energy it needs to prosper. The indicators have been clear for over 50 years: only population reduction and education, in tandem, will result in an increase in the quality of Indian lives. Everything else is corollary or illustration.

    No matter how much damage Nehru did (one joker plus 10 clan members plus 100 cronies, max?), except perhaps the damage of making people stupid and unfit for democracy, 30 years should be enough for an educated population to drag itself out of almost any mess. The West consciously makes India feel good about its democracy, because it renders India “mostly harmless”. There is no cosmic law that democracy is the best social order. Democracy has some prerequisites that must be met, otherwise it becomes statistically inferior to rule by meritocracy under vigilance of non-incumbent “meritocrats”. “Democracy is the best among bad choices” is too blinkered for the 21st century in a hot, (nowhere flat), crowded and increasingly uneducated world.

  • Gina

    I can’t seem to come to terms with population of India being one of the primary factors in her downfall.

    Had we been fewer in numbers but again governed by the same people, I don’t think the problems that we are facing today would have been any less grim. Instead, I think it is a proper regime which brings about the difference in a country’s economic and social status. And the presence of that is regardless of the population factor. Of course, if majority of the huge population is blind-sighted then the situation can be different which is what India is facing at this stage. But if a good regime is formed during initial years, it always provides good for the people in long run provided the people in return, ensure that the regime operates in continuation.

    Also, it is difficult to comprehend that a country under bad governance right from the beginning can have a solid education system. Therefore, the whole idea of people being able to come out of the problems in a span of 30/40 years is hard to fathom.

    As Atanu has rightly put up, I second his opinion that dynamic leaders can do great for India (which hasn’t happened in the last 60 years). In fact if that can happen then India’s huge population factor can be become our advantage rather.

  • veer

    we must wait for modiji to achieve objective. but burying is not our custom, so we must CREMATE socialism!!!

  • Kishore

    • Why are 70 percent of Indians still stuck in tiny villages in the 21st century?
    • Why is 60 percent of the labor force involved in agriculture?

    there’s nothing wrong with having a large number of people residing in villages or practicing agriculture. of course, provided there is sufficient empowerment.