SWARAJ is SURAJ

Why reforms with a human face are possible and within reach

(Published in Pragati January 2009 issue)

NANDAN NILEKANI, in his well-written and meticu-lously researched book Imag-ining India—Ideas for a new century has taken on the un-glamorous yet necessary job of publicly endorsing eco-nomic reforms and laying out his own vision for the necessary next round. On the basis of what actually delivers truly inclusive development rather than on partisanship or ideology, he argues against socialism. It is that sense of pragmatic idealism, combined with a humble curiosity that really makes this book so engaging.

Mr Nilekani presents his argument through three examples: instead of having make-work schemes we should rationalise our labour lawsbecause that will create organised sector jobs for the poor. Instead of resorting to reservations and blind educational spending we should increase overall access to both primary and higher educa-tion by giving private players a level playing field with the government. And instead of agricultural subsidies which help only large farmers and mid-dlemen we should liberalise our agricultural sector too.

The importance of these reforms is very well known to our technocrats and “professor-politicians” but as they remain relatively un-known, our political rhetoric remains socialist-populist. In spite of this, Mr Nilekani remains optimistic that change is coming. The biggest factor here is the bulging demographics of Indian youth who are more globally-connected, ambi-tious and have no dogmatic ideological framework; they allow themselves to be responsive to rationally-argued and clearly-presented policy messages.

Obviously having evangelists with the street cred of Mr Nilekani does not hurt either. So when he makes the point that using unique smart cards and linking up our disparate vertical databases can move us away from the inefficient subsidies towards a system of direct benefits, you know that this can be executed coming as it is from a former CEO of Infosys; and that these are not just the ideas of nerdy policy wonks and esoteric academ-ics.

The section on urbanisation, besides showing the successful use of incentives by the central gov-ernment to abolish urban land ceilings and other socialist urban planning disasters, is highly inspir-ing as Mr Nilekani pens the rise of yuppie ideal-ists. Professionals from Delhi to Bangalore have started effective NGOs on issues like e-governance, education for slum children and wa-ter solutions. Mr Nilekani himself (along with his wife) has donated both money and ideas to such projects, making it safe to tag him as a “venture philanthropist”. 

But Imagining India is not all policy and is in fact peppered with many perspicacious observa-tions about our society, politics and history. A sec-tion which beautifully combines all three is about the English language which Mr Nilekani calls “The phoenix tongue”. Tracing the language’s evolution in India from a colonial administrative language to a neutral language in the post-independence lin-guistic battles to finally the language of upward mobility in a knowledge economy, he says that we have finally accepted the language and that no chauvinistic politician today can deprive rural and poor children of an English education without facing a “groundswell” of protest.

The structuring of the book into four parts—ideas that we have accepted and implemented, ideas accepted but not implemented, ideas pres-ently under debate, and ideas for future debates—precludes an episodic feel to the chapters. Andwhile the first three parts, in some form or shape, are standard fare for the recent crop of non-fiction on India—it is in the last part that the book really stands out by daring to be innovative as well as controversial.

Indeed Mr Nilekani accurately presages and pre-empts future leftist attacks by advocating for a “social insurance plan, built around defined con-tributions (and not defined benefits)…would touch a demographic sweet spot…leveraging the growing value of India’s capital markets in the next few decades”. He explains that this policy would not only be economically inclusive, but would bolster government revenues from the capi-tal markets instead of depleting it with pay-as-you-go Ponzi welfare schemes.

But the book—clearly being a tour d’hori-zon—can feel a little dry and encyclopaedic at times because historical contextualisation and co-pious quotations of experts is included in every section. At the same time, the author’s internal thought process and struggles—why he rejected and accepted certain policy alternatives—is not well documented throughout. So the author’s de-bate with himself should not have been edited in favour of a this-or-that position pitch, ignoring a spectrum of policy options on some issues.

For example, in the section over what India’s policy response to global climate change should be, carbon taxes and emission caps for India are directly endorsed. But the question remains: even given the scientific consensus on anthropogenic global warming, what is the opportunity cost of mitigating global warming? In other words, is the current cost to combat global warming less than the net present value of future costs if the problem is not addressed on a war footing?

Furthermore, is it in India’s national interest from a strategic point of view to commit to ceilings and green taxes now? These are tough issues but the economic future of millions is at stake. Maybe sticking to carbon credits while further encourag-ing technology transfer globally and better envi-ronmental practices locally is our best option.

On the whole though, Mr Nilekani’s vision of overcoming India’s “vertical divides” of caste and religion through economic growth and reforms is highly inspiring and relevant. Quoting Martin Lu-ther King Jr, he says that we must understand “the fierce urgency of now”, lest our demographic divi-dend goes waste by staying on this statist, quasi-socialist path. This book needs to be read carefully by all thinking and compassionate Indians. They might even convince public-spirited entrepreneurs like the author that they are in fact not “unelect-able.” Because even if positive change in India is inevitable, competent citizens need to usher it in.