The Sum of India’s Contradictions

In India contradictions abound. The struggle between the country’s ancient spiritualism and modern materialism, the friction between the majority community’s beliefs and those of the other great religions India nurtures, the battle for power between the central and state governments—such contradictions have tormented the country for decades. At the same time, these dualities have strengthened the young nation, helping India become more pluralistic and resilient. In the two decades since the Indian economy opened to the world, fresh contradictions have emerged: rapid economic growth but a snail’s pace of socioeconomic development, abject poverty that coexists with obscene wealth, and rampant corruption amid vows of probity in public life, for instance. However, the interplay of these contradictions has hardly proved to be widely beneficial. In fact, the consequences—mass suicides by poor farmers, a Maoist-led armed insurgency in some states, and the paralysis of policy making—signal that the tensions could well halt India’s progress. Rather than living with contradictions, as the country has always done, it seems that India must learn to grapple with them—quickly. Even books about India nowadays appear to be dualistic. An Uncertain Glory, written by the economists Jean Drèze and Amartya Sen, and a McKinsey & Company–edited collection, Reimagining India, could not be more different. One is scholarly, policy-oriented, and data-driven; the other is a collection of 65 short, expert-authored essays on an array of topics. Together they capture the torturous struggle to create a new India. There have been several signs recently that the struggle is escalating: a free-falling currency, skyrocketing prices, and vicious crimes against women in supposedly sophisticated metropolises such as Mumbai and Delhi. As the leading industrialist Ratan Tata recently put it, India has lost the confidence of the world. Furious debates have arisen about the causes of the socioeconomic rot in the country and the ways to tackle them. What ails India is its inability to distribute the benefits of economic growth equitably. The country lags behind several slower-growing economies, such as Brazil and South Africa, on quality-of-life indicators, including real wages, life expectancy, and nutrition. In fact, according to Drèze and Sen, when ranked alongside the 16 poorest countries in sub-Saharan Africa, India is 10th or worse on most developmental parameters—a poke in the eye for those who claim that it is a rising economic superpower. India used to boast the best social indicators among the six South Asian nations, but it is second-to-last today, ahead of only Pakistan. Even Bangladesh has developed faster than India has over the past decade. Some economists argue that it scores above India on several parameters because its women are more involved with the economy than are their Indian counterparts. That highlights another contradiction: Women have always been at the heart of Indian society (Indians refer to their country as Mother India), yet many Indian men tend to view women as little more than chattel. Drèze and Sen are hopeful, though: “It is a very positive development that violence against women has, at last, become a big political issue in India,” they write. India fails because it constantly repeats two mistakes. One is not tapping market forces to grow the economy. By trying to micromanage the private sector through a system of licenses and permits, for example, the Indian government stifled entrepreneurship and growth until the 1990s. The other error is neglecting to harness the state—government and the public sector—to ensure equitable development. While deregulation over the past two decades has helped free the market, India’s public sector is still inefficient, opaque, and unaccountable. That’s why growth hasn’t resulted in the development of sufficient physical or social infrastructure, which would have bettered the common Indian’s existence. Unfortunately, it isn’t easy to figure out how to make the public sector more effective. In the Drèze-Sen view, to reduce corruption and ensure accountability, the government must increase transparency, “name and shame” to prevent social leniency, and prosecute criminals effectively. Trouble is, all three measures assume that India’s politicians and bureaucrats are interested in tackling the malaise in the first place. Given the spike in corruption over the past 10 years, that’s tough for many Indians to swallow. “India has missed out fairly comprehensively on a large part of the lessons of Asian economic development.” Conversely, Indians find it hard to believe that the private sector can help the state attack its most intractable problems, such as providing good education and health care. However, recent developments challenge that doubt: At least nine exemplary hospitals in India now offer world-class health care at rock-bottom prices (see The Globe, this issue). Since these hospitals are able to cater to huge numbers of patients, relying on the private sector to deliver health care for all may well be the smart option. Interestingly, as Reimagining India suggests, there appears to be a growing consensus about the future role of the Indian state. Like Drèze and Sen, many thinkers and business leaders make the case for a strong but liberal government. For instance, the author Gurcharan Das, who famously declared that the economy grows at night when the government sleeps, writes that India has historically been a strong society with a weak state—and that the latter has to change. At the same time, no one argues for the abandonment of democracy. Instead, MIT’s Yasheng Huang points out that the economies of Pakistan and North Korea have failed to grow although they are autocracies, and that socialist China is as troubled by corruption as is India. The trouble lies not in democracy but in Indians. The McKinsey collection gives global business leaders, once silent on the subject, a chance to voice their opinions about India. Coca-Cola’s Muhtar Kent, Abbott’s Miles White, and Schneider Electric’s Jean-Pascal Tricoire, among others, wax eloquent about investing in low-cost innovation in India. Bill Gates writes proudly about how the country eradicated polio, concluding: “India has shown the world that when India’s people set an ambitious goal, mobilize the country, and measure the impact, India’s promise is endless.” If only Indians would follow that simple management recipe more often! It’s tough to empathize with all of India’s challenges, but Starbucks’s Howard Schultz, who writes about how his company finally broke into the market, clearly does so. He explains why Starbucks chose to collaborate with the Tata Group and describes the huge flagship store that it has opened in a historic building in downtown Mumbai. In Schultz’s words: “A few weeks after returning from the opening…, we held one of our big open forum meetings where we get the entire company together. As I tried to describe that moment for everyone, something came over me. I started to cry.” That’s India for you. Love it or hate it, the contradictions will eventually make you weep.

The Sum of India’s Contradictions

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