Ireena Vit­tal

The in­equity in ac­cess to growth op­por­tu­ni­ties will harm the coun­try’s growth story. To ‘Build In­dia’, we need a new ap­proach to ‘Gov­ern In­dia’

India Today - - INSIDE - Ireena Vit­tal, a for­mer McKin­sey part­ner, has worked on ur­ban­i­sa­tion and agri­cul­ture in In­dia

POL­ICY DE­BATES ON IN­EQUAL­ITY in New Delhi fo­cus on poverty: the wors­en­ing Gini co­ef­fi­cient (‘In­dian in­come in­equal­ity, 1922-2014’: Lu­cas Chan­cel and Thomas Piketty) or how the top 1 per cent earned 22 per cent of the na­tional in­come while the bot­tom half took home just 15 per cent (World In­equal­ity Re­port, 2017). How should demo­cratic, so­cial­ist In­dia share the in­come pie is the ques­tion. Cit­i­zens ag­i­tat­ing in our streets re­flect a dif­fer­ent de­bate about in­equal­ity: the in­equity in ac­cess to op­por­tu­nity. In­tu­itively, this makes sense. A per capita an­nual in­come of a mere $1,710 (ver­sus $57,000 in the US or $8,100 in China) sug­gests that most of our growth is ahead of us. Our real wealth, the 450 mil­lion cit­i­zens below 18 years, are yet to start their game. For them, en­sur­ing ac­cess to the grow­ing pie (of mar­ket, ser­vices and space) is the mea­sure of in­equal­ity. But when most nar­ra­tives state that a 10 per cent eco­nomic growth will mag­i­cally cure all our ills, should In­dia worry about in­equal­ity?


Suc­cess­ful na­tions en­sure con­sis­tent pro­duc­tive growth. Com­pound­ing, it ap­pears, works for so­ci­eties as much as for in­di­vid­u­als. Two fac­tors drive long pe­ri­ods of growth: en­sur­ing so­cial mo­bil­ity and keep­ing all cit­i­zens en­gaged. The arc of de­vel­op­ment does not ben­e­fit ev­ery­body eq­ui­tably, si­mul­ta­ne­ously. This is of­ten due to dif­fer­ences in nat­u­ral ad­van­tage: a com­mu­nity is more lit­er­ate, or

has his­tor­i­cal mi­gra­tion link­ages, or ac­cess to ports or fer­tile land. Or the prac­ti­cal re­al­ity of state cap­i­tal-al­lo­ca­tion choices leads to dif­fer­ences: in­vest­ing in roads ver­sus air­ports, ir­ri­ga­tion or po­lice­men, a de­vel­op­ment-ori­ented leader or a com­pro­mise can­di­date. What­ever the rea­son, cit­i­zens per­ceive dif­fer­ent growth tra­jec­to­ries. And they must be­lieve that the game is not ‘rigged’. That one day, they too will par­take of op­por­tu­ni­ties. Else, mur­murs of dis­sent lead to protests. If un­heard, cit­i­zens cre­ate ‘the other’, re­ject­ing the sys­tem by vot­ing in ex­treme political choices. Brexit and Trump­ism are two ex­am­ples. So, do all In­di­ans be­lieve they have ac­cess to op­por­tu­nity, space and ser­vices?


First, the good news. Seventy years of democ­racy have en­shrined a new norm in a civil­i­sa­tion that has lived with cen­turies of in­equity: ev­ery In­dian is born equal. The state man­date in­cludes de­liv­ery of ba­sic ser­vices: near univer­sal school en­rol­ment, the world’s largest food se­cu­rity pro­gramme, ru­ral roads and, now, power-for-all and af­ford­able hous­ing. Not an easy en­deav­our, given our scale.

Now, the chal­lenge. This is in­suf­fi­cient to en­sure equity. For ev­ery child to ac­cess op­por­tu­nity, he/ she must be healthy, skilled and be­long to a com­mu­nity where the pol­icy en­vi­ron­ment cre­ates ad­e­quate jobs (pub­lic or pri­vate) in sync with his/ her skills and as­pi­ra­tions. In­dian kids have big as­pi­ra­tions. We fall short on the other fronts. Poor ma­ter­nal health and san­i­ta­tion stunt al­most 48 per cent of chil­dren. And given the in­ad­e­quate in­fra­struc­ture and teacher train­ing, 40 per cent chil­dren drop out by Class 8; less than 12 per cent grad­u­ate. And skills do not match jobs. While sec­tors like con­struc­tion, hos­pi­tal­ity, lo­gis­tics and pub­lic ser­vice will cre­ate mas­sive jobs, we are not skilling (or cre­at­ing so­cial equity) for th­ese. And, fi­nally, our poli­cies do not cre­ate the right growth con­text, of­ten fo­cused on the easy, not the right, levers. In­deed, most re­cent protests are led by the Jats, Marathas, Pati­dars and Ka­pus, erst­while ru­ral-rich and po­lit­i­cally-dom­i­nant com­mu­ni­ties. They worry about the fu­ture of their ed­u­cated youth: govern­ment jobs are ‘re­served’ and there are few pri­vate jobs. While carv­ing them a sliver of pub­lic jobs is a likely so­lu­tion, they need value-adding jobs, in agri­cul­ture, for starters, or in cities. Mak­ing agri­cul­ture vi­able needs big shifts: tech­nol­ogy in­vest­ments in in­puts, con­sol­i­dated land use (not land own­er­ship), changed crop mix and val­uead­di­tion at farms and dis­man­tling the hold that pow­er­ful, po­lit­i­cally strong in­ter­me­di­aries have on prices. Th­ese tough choices need political cap­i­tal and courage. But for our lead­ers, a farm loan waiver is an eas­ier short-term fix!

In­dia’s record in eq­ui­table ac­cess to space and ser­vices is weak too. In­dian women epit­o­mise one story of in­equity in ac­cess to spaces. A gen­der ra­tio of 900 and a mere 27 per cent work­ing (the world’s low­est but for West Asia) demon­strates the limited space for In­dian women. The tal­ent waste is as­ton­ish­ing in a coun­try that needs lakhs of doc­tors, teach­ers, po­lice­women and busi­ness­women. Sim­i­larly, ur­ban chil­dren are in­creas­ingly obese as safety con­cerns keep them in­doors. Nar­row space also haunts in­ter-faith mar­riages in the 21st cen­tury, with love coloured by hate­ful con­no­ta­tions of ji­had. Fi­nally, ac­cess to cit­i­zen ser­vices re­mains limited. In­deed, three sec­tors with se­vere sup­ply con­straint (ed­u­ca­tion, health and hous­ing) ac­count for 37 per cent of In­dia’s core in­fla­tion, mak­ing In­dia unique: its fis­cal pol­icy drives its mon­e­tary pol­icy! The his­tor­i­cal so­lu­tion to this has been a two-tier mar­ket. The rich and pow­er­ful ac­cess pri­vate mar­kets or get pref­er­en­tial ac­cess to pub­lic goods. The poor pay more or live with ser­vice gaps: run­ning pil­lar-to-post for a school ad­mis­sion or a hospi­tal bed. This will no longer work. The big­gest ser­vice gaps now are also air pol­lu­tion and safety, with no elite so­lu­tion. The street protests are get­ting more fre­quent and

we could see many more in 2018. The in­equity re­mains. Is in­equity writ­ten in our karma, in our stars?


Not re­ally. Seven mil­lion cit­i­zens of Hi­machal Pradesh suf­fer from lower in­equal­ity. Jobs have been cre­ated sys­tem­at­i­cally. Land re­forms (since 1971) en­sured that 80 per cent house­holds own land, crit­i­cal equity in a pre­dom­i­nantly ru­ral state. Since then, prof­itable hor­ti­cul­ture jobs grew nine times to 28 per cent. Lo­cal agri uni­ver­si­ties pro­vided the right in­puts. Farmer-pro­ducer groups in­vested in value ad­di­tion and di­rect mar­ket ac­cess. Smart poli­cies also cre­ated jobs in rel­e­vant sec­tors: con­struc­tion, tourism, en­ergy and pub­lic ser­vice sec­tors. In turn, this re­sulted in near-univer­sal ac­cess to roads, drink­ing wa­ter, ed­u­ca­tion (high­est lit­er­acy in north In­dia) and pub­lic health (83 per cent cit­i­zens ac­cess it ver­sus 34 per cent for In­dia). An as­ton­ish­ing 63 per cent of ru­ral women work; 80 per cent par­tic­i­pate in vil­lage de­ci­sion-mak­ing. With land sale pro­hib­ited to out­siders, the state main­tains its tra­di­tional fo­cus on sus­tain­abil­ity. Of course, HP has its is­sues, and needs a new growth model. But let per­fect not be the en­emy of good.

What en­sured equity in Hi­machal? It is not the longevity of any one political party as vot­ers, al­most al­ways, trounce the in­cum­bent. Ex­perts high­light three fac­tors: a benev­o­lent political class that chose smart pol­icy and pub­lic in­vest­ment over sub­sidy, an in­de­pen­dent bu­reau­cracy that en­gages with com­mu­ni­ties to tai­lor pol­icy, and lit­er­ate, en­gaged cit­i­zens who de­mand lo­cal ac­count­abil­ity through in­sti­tu­tions such as vil­lage PTAs and pan­chay­ats.

So the is­sue is not that it’s not in our stars. Per­haps we need to recog­nise that the state’s role is not that of a benev­o­lent sub­sidy provider but an en­abler of pub­lic and pri­vate in­vest­ment by fram­ing right poli­cies, skilling cit­i­zens and pre­vent­ing ‘elite cap­ture’. Our political en­gage­ment could ma­ture too: voter groups must stop bar­gain­ing for their share of the pie and vote for in­clu­sive, longer term change. Equally, we need more thought­ful bu­reau­crats to work for the het­ero­gene­ity of In­dia, re­spect­ing the agency of cit­i­zens rather than be­ing their bene­fac­tor. But could this hap­pen?


Two fac­tors might help: the rise of bot­tom-up democ­racy and a new ap­proach to gov­ern In­dia. Let’s start with the first. Political par­ties have ex­per­i­mented with a new busi­ness model to win elec­tions: di­rectly com­mu­ni­cate with vot­ers, tai­lor mes­sages to lo­cal re­gions, man­age vot­ing booths to en­sure last-mile voter de­liv­ery. They have started build­ing a per­ma­nent lo­cal pres­ence of party work­ers and vol­un­teers. This model, ef­fec­tive in re­cent elec­tions, is also a two-way street. Soon, smart vot­ers will de­mand im­pact, not just ac­tion. The face on so­cial me­dia will sug­gest a real re­la­tion­ship. The on-ground pres­ence will ce­ment ex­pec­ta­tions of lo­cal ac­count­abil­ity. And man­ag­ing booths could morph into area de­vel­op­ment around the booths. Over time, smart par­ties will cre­ate a cadre ca­reer path—from booth man­ager to pan­chayat/ district leader to town mayor and state leader. En­gaged cit­i­zens, with tech­nol­ogy and as­pi­ra­tions, could use likes/dis­likes to drive pol­icy and cap­i­tal al­lo­ca­tion. A bot­tomup democ­racy might fi­nally tri­umph over a top-down choice of political lead­ers. 2018, with mul­ti­ple state elec­tions, could see youth de­mand more from those seek­ing their sup­port.

Politi­cians are nec­es­sary, but not suf­fi­cient. De­sign­ing in­clu­sive poli­cies needs ca­pac­ity and ex­per­tise. We strug­gle with both. Our 7,935 cities need more staff to serve all their cit­i­zens: Ben­galuru and New York have sim­i­lar pop­u­la­tions but the Ben­galuru city govern­ment has only six per cent of the staff strength in the Big Ap­ple. Our 250,000 pan­chay­ats need ac­coun­tants and au­di­tors, plan­ners and project of­fi­cers. We also need a mil­lion-plus folk with ex­per­tise: to map aquifers and run wa­ter-user as­so­ci­a­tions or to de­sign trans­port and IT sys­tems. The re­sult­ing jobs will be wel­come: we are a sur­pris­ingly small state for such a large cit­i­zen base.

Fi­nally, we need ad­min­is­tra­tive ca­pac­ity that looks longer-term and be­yond the lat­est fire: sep­a­rat­ing the leg­isla­tive (de­sign­ing poli­cies and laws) from the ex­ec­u­tive (staffing in­sti­tu­tions and cre­at­ing stan­dard op­er­at­ing pro­ce­dures to ex­e­cute well). To ‘Build In­dia’, we need a new ap­proach to ‘Gov­ern In­dia’. Civil so­ci­ety should fo­cus its en­ergy here. Cur­rently, our best NGOs are hap­lessly squeezed be­tween the FCRA or the For­eign Con­tri­bu­tion (Reg­u­la­tion) Act night­mare and the per­ceived en­croach­ment into their space by CSR ini­tia­tives. But In­dia needs ac­tive, scaled-up civic in­sti­tu­tions to be so­ci­ety’s me­mory-keep­ers, to serve as hon­est bro­kers be­tween busi­ness and the state and to en­sure cit­i­zens re­main alive to their civic re­spon­si­bil­ity and rights. Their role is pro-In­dia, not anti-govern­ment. And they will need old fash­ioned door-to-door cam­paigns to get cit­i­zens to de­mand more ca­pac­ity to serve them. 2018 is a good year to re­launch this ef­fort, given the mil­lions of first-time vot­ers.

In­di­ans do not dis­like the rich. In­deed, be­com­ing rich is of­ten part of their dream. They dis­like feel­ing that rich folks and politi­cians (of­ten over­lap­ping) have rigged the game. They like to be­lieve that their chil­dren will have a chance to win too. It is in­equity in ac­cess to growth op­por­tu­ni­ties that will harm the In­dian growth story. Smart politi­cians would do well to en­sure the game is played fairly. Else, the In­dia story could end pre­ma­turely.



Illustration by RAJ VERMA

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