Business Today

Private Success, Public Failure

Gurcharan Das        Print Edition: Jan 6, 2013

On 8 April 2011, the day before Anna Hazare broke his fast, I was in Cairo to present the 'Indian model' for Egypt's future at a conference of liberals from their democracy movement. When I visited Tahrir Square, I was reminded me of Jantar Mantar in Delhi where I had seen the seventy-four-year-old Anna Hazare in a white villager's cap a few days earlier. Both were non-violent protests reminiscent of Mahatma Gandhi.

The Egyptians asked me three questions.

First, how did India keep its generals out of politics? Second, how did it manage to create a sense of security for its minorities? (They explained that 11 per cent of Egypt is Coptic Christian while 13.5 per cent of India is Muslim; but why did Muslims in India feel secure while Christians in Egypt did not?) And third, what could Egypt learn from India's success in winning outsourcing business from the world's largest companies and become a rapidly growing economy?

I did not have satisfactory answers to any of their questions, but they did force me to think about India in a fresh and new way. I had been too close to India and too impatient with its deficiencies.

Gurcharan Das
Gurcharan Das
The three questions of the Egyptians helped me to understand India better. No one in India ever asks the first question: 'How did you keep the generals out of politics?' The idea is inconceivable after sixty-five years of robust civilian Indian rule in which there have been periodic and peaceful changes of government.

One answer might be plain 'luck'. Another speaks to the restrained behaviour of India's first generation of rulers, especially the charismatic Jawaharlal Nehru, who invited profound respect from the armed forces. Having fought for India's freedom, this generation went on to nurture the institutions of democracy, and this brought legitimacy to civilian rule.

The pattern of civilian control was set early. When power was being transferred from Britain to independent India, the British military commander wanted the public to be kept away from the ceremony for security reasons. Nehru politely informed him that India was now ruled by the people and he cancelled the general's order.


Soon after, Sardar Vallabbhai Patel, the home minister, was less polite in turning down the advice of the commanding general, who opposed military action in Hyderabad.

The second question of the Egyptians also took me by surprise. India is indeed a secular democracy. The killing of around 3,000 Sikhs provoked by Indira Gandhi's murder by two Sikhs in 1984 and the death of around 2,000 Muslims after the burning of Hindu pilgrims in a train in Godhra in Gujarat in 2002 were horrendous events, but they were aberrations in six and a half decades of independent India.

The relative success of secularism may have more to do with the nation's past traditions of tolerance. But democracy too, like a safety valve, has contributed to maintaining India's secularism.

The third question of the Egyptians goes to the heart of the India model: how to get the economy moving by becoming the world's back office. India became a high-growth economy partly as a result of the economic reforms. Egypt too would have to free its private sector from the tentacles of the state. Although India's success in software and business process outsourcing was enabled by removing some red tape in the telecom sector, the knowledge economy became a driver of growth because of benign neglect by the state. India's knowledge economy literally grew at night when the government slept.

Twenty years of capitalist growth since 1991 has made India one of the world's fastest growing economies. Although this growth has recently slowed from a scorching 9 per cent rate prior to the global financial crisis, India is likely to continue to grow at between 7 to 8 per cent a year for the next couple of decades. This means that a large majority of Indians will soon emerge from a struggle against want into an age when they will be at ease. Like many parts of Asia, India, too, will turn into a middle class nation. This will not happen uniformly--Gujarat will be ahead of Bihar, but even Bihar will catch up. Indians tend to be self-reliant, ambitious and thrifty- these attitudes are conducive to high growth. Poverty will not vanish, but the number of poor will come down to a manageable level, and importantly the politics of the country will also change.

The stubborn persistence of democracy in India over the past sixty-five years is an even greater achievement. Time and again, it has shown itself to be resilient and enduring - giving a lie to the old prejudice that the poor are incapable of the kind of self-discipline and sobriety that make for self-government. It has held free and fair elections without interruption for sixty-five years. Of its 3.5 million village legislators, 1.2 million were women, who ruled over the world's most diverse country peacefully.

Thanks to our vigorous democracy I do not fear the army in India. But I do fear a limp state which cannot implement its own laws or control its functionaries.

The Indian state has declined into a state of paralysis. Governance has become a serious problem and corruption is pervasive. While prosperity is, indeed, spreading across the country, governance failure pervades public life. It is a tale of private success and public failure.

The state's inability to deliver the most basic services provoked one observer to call India a 'flailing state'. Because India has historically had a frail state, strengthening state institutions will not be easy. A fractured Parliament cannot be depended on when 150 out of 542 seats are occupied by members with criminal records after the 2009 general election.

Yes, the higher judiciary can be relied on to give reasonably fair justice, but it takes forever. Clearly, the 'flailing state' will have to be kicked and dragged to initiate governance reforms.

The ray of hope, I believe, lies in a newly awakened, rapidly growing middle class. Backed by an aggressive media, it constitutes a powerful countervailing force. When the middle class becomes 50 per cent of the Indian population, as it will in the early 2020s, the politics of India will also have to change.

Excerpts from the book 'India Grows at Night' by Gurcharan Das. Reprinted with author's permission

The writer is a commentator and former CEO, Procter & Gamble India

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