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Making sense of India’s woes and wonders

By Frank-Jürgen Richter

Financial Chronicle, August 3, 2012

The nation’s promising present should be harnessed effectively

It is too easy to join the ranks of ‘India bashers’ allowing us to say the Indian government, or others, have to face flak for their lack decision-making will over this and that — as shown, perhaps, by the recent grid failure that deprived nearly 700 million people of electricity. ‘Bashing’ is an easy way to report stories in the media. It is, indeed, true that many millions of people did suffer from the lack of electricity, but, there were many millions who did not suffer. So, let us look a little at the brighter side.

Once India had settled down after its early invasions, it prospered under many local rulers. So much so, that it exported ideas, concepts like the ‘zero’, and later, its wonderful cloths and jewels. The west took up these and demanded more and more. It even set up trading posts that morphed, perhaps, with bad results, into the war-like ‘protection’ offered by the nations behind the trading posts. As a result, modern India has a deeply-held set of ideas: So me that are traditional, while others are taken from the west. Today, Indians are a little confused, and often, are portrayed shaking their heads from side to side, while saying ‘yes’, and in the process confusing the visitor. But that aside, successive governme nts have faced massive tasks in developing the nation. Th ere are a huge number of people to persuade (over 1 billion now), living in several states, whose regional heads can act like mini-rulers, who often seem to defy government ed ict. Once the British Raj had relinquished control and In dia took up the task of being governed as a democracy, it took place amid very strong religious strife. The leaders had to develop the whole nation and draw it together in a meaningful way. But, this was hardly possible, given the natural differences between its population living in the no rth, south, east and west. One method was simply to enhance the network of ro ads and railways that bou nd the producer countryside to consuming city-dwel lers and to ports, so that la bour could create wealth for all.

This utopian expansion has not readily occurred. The grand scheme of the ‘golden quadrangle’ creating major axes of logistics, fell years behind schedule and did not effectively link the countryside to consumers. One of India’s failures has been the lack of thought and action expended on creating an adequate infrastructure in depth. One consequence is that local people use new inter-urban highways for local travel, passing in either direction on each side of the dual carriageways on foot, bikes and vehicles or even on animals! The result often is chaos. Although, there is a reduction in transit time, there are needless fatalities. But who is to blame? Locals are not often supplied with safe all-weather roads.

Another failure stems from the patronage system of the old days, under which, many are offered bribes to effect change. Corruption scandals now are rampant within Indian society; it is a norm, and is often factored into project proposals. If not, the funds are syphoned off, making a mockery of the proposed return on capital projections because the remaining cash, maybe as little as 60 per cent, can never achieve expected outcomes. Still, there are some sectors that have avoided the ‘licence raj’ system. One example is the high-tech and software industries.

The development of Indian Institutes of Technology, heralded a boom in the digital sector, and as ‘bits’ were never seen by rent-seeking officials. The services sector managed initially to evade stultifying national corruption, affecting other forms of new ventures. As the world knows, the Indian [digital] services sector is a booming industry that has nurtured many offshoots in several regions. Undergraduates, who emigrated to learn more, or who went on to create startups in ‘silicon valleys’ in California, or Boston or Cambridge, are now returning to augment this exciting industry across the nation. At the same time, as some created their overseas startups, several national brands expanded their success. Firms, such as Reliance, the Tatas or Cobra Beer, have become gl obal names. Yes, India is bo oming, but it could do better.

There is a great need for the government to shake the nation as one does a carpet – to rid it of its sloth and acceptance of the naturalness of corruption. Neither of these actions, ought to be allowed because they hinder an open democracy. If the nation could become more tolerant to others, perhaps, I mean, to become less fearful of outsiders who hold different beliefs, it too may become part of India’s wonders. Remember, in our ‘bashing’ mode, the Europeans blame Angela Merkel and the whole world blames China, but, only the Indians blame themselves! Imagine how well India and its people might develop if they were more friendly to their neighbours in Pakistan, Bangladesh or China, so that they could develop the subcontinent across broad political and social fronts. Reducing conflict would not only have a far-reaching effect, but also, benefit local people and raise inward investment due to perception of greater stability; and the latter would also raise tourism, thereby, increasing local people’s cash flows. India and its neighbours deserve a more peaceful integrated world.

The writer is founder and chairman of Horasis, a global business community