Rethinking the basics
ECONOMY N Chandrasekaran and Roopa Purushothaman, authors of Bridgital Nation, believe technology can help solve India’s economic problems if we regard it as an aid and not a threat
For as long as I can remember, the same point has been made over and over again. India has the world’s largest pool of trained economists. Everywhere you look -- the World Bank, the IMF, the financial community, large corporations, universities and the UN -- you find Indian economists.
Many of these economists have worked, at some stage, within the government of India: in the Reserve Bank, the Planning Commission, the Finance Ministry, etc. Many more have taken a personal interest in their motherland and offered prescriptions for the Indian economy.
And yet, despite this surfeit of economists, the Indian economy has usually failed to function as well as it should. In the bad old years of the Hindu rate of growth, our economists offered no way out.
And even after the 1991 reforms (undertaken at gunpoint because of pressure from the IMF’s nonIndian economists), when the economy performed better, our economists had very little to do with it. And now, as a slowdown grips many sectors, no economist seems to have a viable solution.
Of late, a similar criticism has been levelled at the tech guys. Yes, sure, India has a software industry that is the envy of the world but how has it benefitted the country? Our problems have multiplied even as the tech guys have made their own fortunes.
Economists are sensitive to the criticism. Many have recently published books offering solutions to our problems. Surjit Bhalla has written about the need to involve more women in the workplace and to promote entrepreneurship in two recent books (The New Wealth of Nations and Citizen Raj).
And the tech guys have not only written books but have actually got on with the job. Nandan Nilekani’s Rebooting India was a best seller and his Aadhar project is unparalleled anywhere else in the world in its size, speed and scope.
Bridgital Nation is an attempt by a tech guy and an economist to merge their skills in the search for solutions. N Chandrasekaran is Chairman of the Tata group but before he got the top job, he ran Tata Consultancy Services, India leading IT company. Roopa Purushothaman has worked as an economist in the financial services sectors (Goldman Sachs, Everstone Capital, etc.) before becoming Chief Economist for the Tata group.
The two authors believe that technology can help solve India’s problems but only if we regard it as an aid, not a threat; if we allow it to enter such sectors as the legal process, education and medical services, and we stop viewing things through the simplistic binary of technology versus jobs.
Most of us recognise how crucial the next decade is for India. But the figures still have the power to terrify anyone who cares about the country. We brag that by 2050, India will be the world’s third largest economy. But do we realise how much behind the rest of the world the average Indian will still be?
The US will be the world’s second largest economy but its per capita income will be $100,000 to India’s $ 15,000. Even Japan which will be behind us as the fourth largest economy will have a per capita income of $76,000.
So yes, we will be big. But we won’t necessarily be rich or even well off.
For us to maintain the standards of living we now have, given the large numbers of young people joining the workforce, India will have to keep growing at nearly 10 per cent year on year. There was a time when this looked achievable. But as growth rates fall below five per cent and governments don’t seem to know how to respond, the future begins to look like a very scary place.
The problem, as Chandrasekaran and Purushothaman point out, is that India does not fit into the standard models of development. In most countries, growth is followed by the creation of more jobs. It doesn’t work that way in India. The growth tends to come from services and few manufacturing jobs are created. What we need, the authors say, is a model that fits our specific needs.
Plus, there are other causes for concern. Only 23 per cent of all women who could work are employed. (For men, this figure is 75 per cent.) There are crises in such sectors as health, where, as the authors flatly state, the system does not work. The courts are so full of piled-up cases that for many Indians, no justice is available.
No single prescription can solve all these problems so the book takes a more fundamental approach. “Bridgital’ involves re-examining and reinventing the tasks that go into a job. Ideally, this reinvention should be able to bring much of the unorganised (and poorly paid) sector into the formal economy. Technology offers everyone a chance to leapfrog several steps in each process and empowers workers to perform tasks that were thought to be beyond them.
All of it makes a lot of sense when you read it though. Most people will be taken aback by the sheer magnitude of our problems: we have been conditioned to believe that we are an emerging super power that is only a few years away from becoming a First World economy.
It comes as a bit of a shock to know that though India needs more entrepreneurs, no invisible hand behind the markets will magically solve our problems. Too much dependence on the market alone can lead to lopsided and uneven development.
The problem, in practical terms, in implementing much of what is suggested here, is that the solutions advocated by this book are back to basics, fundamental prescriptions that require us to go beyond our comfort zones and re-imagine every sector.
Few governments, or elites, for that matter are willing to make such a leap of the imagination. Ministers and administrators like piecemeal solutions that are easy to implement without changing very much.
This approach, on the other hand, requires a complete change in our thinking. And yet, as will be clear to anyone who reads this book, if India doesn’t rethink the basics of our failing system, the future is bleak.
The authors stick to possible solutions and clearly regard it beyond their brief to contemplate what the social consequences of a failure to change are.
But those consequences are not difficult to see: social tensions and a discontented, angry and frustrated populace.
In the end, the future is not just about technology or economics. It is about people. And the India we will live in.