- Associated Press
- In a recent poll, 65% of Indians blamed politicians for corruption. Shown, supporters of Anna Hazare at an anti-corruption rally in New Delhi, Aug. 2.
We’re sitting amid chaotic traffic on a pothole-ridden road, the air hazy with a mix of early winter fog and pollution, wondering whether to ignore the beggar tapping on our car window.
India’s economic growth rate, like the world’s, has slowed down. We’re still at an enviable 5% but the issues we had ignored to spotlight the glamor of 9% growth and revel in an India-China comparison are catching up to us.
One fundamental issue is corruption. Last year, India dropped 8 places to number 95 in Transparency International’s Corruption Index. In a recent poll, 65% of Indians blamed politicians for corruption.
Economist Raghuram Rajan says, more diplomatically, that a lag in governance has allowed the private sector to make unfair profits.
What he fails to mention is that this same lag in governance may also have benefitted several politicians and bureaucrats. Regular people are battling this issue by supporting anti-corruption movements like those of Anna Hazare and Arvind Kejriwal. There is even a website called “I Paid a Bribe” which allows people to expose their experiences with rampant bribing.
But these hardly scratch the thick skin of a giant, complex, and deeply corrupt system.
Another issue that plagues us is inequality. India’s dynamic growth over the last few years hasn’t been matched by trickle-down benefits. A report by the OECD says that income inequality has grown. Beyond growing income disparity, which is perhaps understandable in any economic boom, a recent UN report also cites inequalities in access to education and healthcare.
In some parts of India, some 42% of children under the age of five are malnourished. And, of course, gender inequality, beginning with the skewed sex ratio, is well documented.
A third issue is lack of infrastructure. The lack of electrical capacity is revealed every summer, matched only by talk of the dropping water table. While there may be enough airports to handle the flights of the more affluent, there is a lack of roads and those that exist are often of poor quality. After each monsoon, many roads are repaired but with substandard material so they have to be re-done the following year, putting more money into the pockets of contractors. This year, a lack of port facilities was also highlighted.
These anomalies have grown during the good times as attention to long-term planning and equal access to opportunity were sacrificed for the greater glory of a big GDP number.
So, while the economic slowdown is not wished for, it may not be all bad. This may not be a time to compete with others, but it may be a time to compete with ourselves. Michael Heise, professor and economic consultant, says “more moderate growth” would also “bring with it a reduction in global imbalances—something to be welcomed, not lamented.”
India could localize this sentiment by using the downtime to analyze and address some of our persistent internal issues.
Like how to make politicians accountable, how to improve governance, and how to make bureaucratic practices easier and more transparent. Like how to bring more of the neglected sections of society along with us – to the point where we at least have a majority who can make and have a share in sustainable growth. Like how to provide education and healthcare for the masses, including women and children. Like how to improve urban infrastructure, and not just in the giant metropolises but also in the smaller cities to spread out urbanization. Like how to get a handle on air pollution and manage the garbage situation and ensure basic necessities like water and electricity to the multitudes.
Joseph Stiglitz said in a recent speech: “Markets don’t exist in a vacuum. Politics shapes markets … and in doing so they shape the outcomes, the level of inequality, the level of equality of opportunity.”
Several months ago. Mr. Rajan asked the question “Is Inequality Inhibiting Growth?” Now that he’s the chief economic advisor to the finance ministry, he hopefully knows the answer and is striving to correct the situation.
We can use this downtime to not only get our house in order but to increase our domestic demand. As Mr. Heise said, “a stronger focus on the domestic economy should create a more balanced, sustainable foundation for growth in emerging Asia in the long run.”
Maybe we don’t need to be “Incredible !ndia,” as our tourism tagline proclaims; perhaps we can just try for “Credible !ndia.” Maybe it won’t be a case of slow and steady wins the race; it may be a case of slow and steady makes it to the finish line with more people intact and in tow.
As we roll into winter, objects in the rearview mirror are closer than they appear. And the potholes in front may prove harmful if we ignore them. While the obstacles are clear, the way ahead is not. The best course of action may well be to move forward but slowly.