Tribal and farmer protests are often a clamour for participation in India's growth
The process of economic reform that India embarked upon 20 years ago was expected to produce immense churning. Most of India’s citizens are too young to even remember the India before reforms. State control was pervasive. Growth, even when it took place, was not sustained for significant periods. The spectre of mass poverty was overwhelming, and till the mid-90s it was still plausible to question the viability of the Indian Union.
Reforms changed all that. After an initial period of contraction, they gave India the highest and most sustained burst of growth. Poverty may have fallen more slowly than anticipated. But there is no doubt that for the first time mobility out of poverty was a possibility, not just an abstract idea. The confidence that came with growth, changed India’s psyche beyond recognition.
Instead of being wrecked by sectarian nationalism, India arrived at the world stage. Wealth creation was no longer anathema. Aspiration gripped all levels of society: From the poor who sent their children to private schools even at the cost of eating less, to India’s capitalists who dreamt of owning the world. Reforms tore through psychological barriers and fears.
Such an immense transformation was not going to take place without serious dislocation and conflict. New fault lines were bound to emerge. The gains of growth, no matter how impressive, were going to be uneven. The rampant instrumentalism that the quest for wealth bred was both a strength and weakness. It was a spur to dynamism and breaking down barriers. But it also generated impatience, where an ‘anything goes’ attitude legitimised riding roughshod over the rights of citizens or care for the environment.
In theory, the story was supposed to go like this. The state would free private enterprise and create conditions for its success. The growth in turn would generate resources that the state could invest in addressing market failures or the needs of those who could not participate in the growth. There was a hope that economic reform would be a spur to political reform. By cutting down the need for state intervention in certain areas, the state would become less corrupt; by having access to increased resources it could provide public goods like health and education on an unprecedented scale.
All this happened in a new context. First, there has been, over the past few years, a governance vacuum at the Centre, with the highest functionaries — from the Congress party president to the prime minister — unwilling to exercise a minimum modicum of authority. We can analyse this vacuum to death and explain it in structural terms: The fragmentation of power, the structures of inner party competition and so forth. But there is no avoiding the fact that this vacuum was largely a self-inflicted goal: India’s leadership was stuck in indecision, ideological confusion and complicity in veniality. This had ramifications for the state’s capacity to negotiate social conflict. While some states exercised leadership at their level, the vacuum at the Centre empowered all kinds of groups and institutions to veto constructive change.
(This story appears in the 26 August, 2011 issue of Forbes India. To visit our Archives, click here.)