India is still learning, after 57 years
Socialism allowed the Indian society to remain humble and disciplined as successive governments tried and tested the home-grown policy where indigenous industry was encouraged and education was made the cornerstone. There was no need to urge the people to tilt toward education as urban India managed to learn and then excel in academia quite by habit, while the rural India was too poor to make headway. Overall, the socialist economy meant that growth was slow and the stranglehold of poverty was not being tested. However, some would say that at least no side effect of the market economy: no large-scale unemployment as result if restructuring and layoff, corporate greed, inequality and social discontent existed.
These are issues at best peripheral in nature. After all India at that time looked like being time warped in mid-flight. The state of public utilities was in shambles, telephone system never worked, communication was difficult and that meant that large-scale venture capitalism was impossible to initiate. As long as the infrastructure was not improved and the private sector not allowed to create new opportunities, it was clear that the state owned economy would be unable to absorb the new graduates that were coming into the economy in need of work.
For all latest news, follow The Daily Star's Google News channel. The political system in the post-independence India, dominated by towering personalities was one dimensional, no one dared to speak out against the state controlled economy, since it was the preferred choice of the leaders who played a part in the struggle for independence. The market forces not playing a part in the economy meant that large ineffectual state owned companies were not making any profit but were actually a drain on the national budget.
A bloated bureaucracy, a closed economy with scant support for private entrepreneurship was keeping India back. Defeat of communism and the desperate condition of the economy convinced India that the economy should be driven by market forces. Currency laws were liberalised and fiscal policy was reorganised, banking laws were modernised, price control loosened, and the ground was ready to allow for large-scale foreign investment. India is still far from a fully capitalist economy. In fact, China is going ahead with faster reforms with a dynamic stock exchange and daring innovations that encourage foreign equity in locally owned industries, reforms in banking that are bolder and more effective and restraint on corruption that is increasing investor confidence. Above all, Chinese technological advancement competes with India and outstrips it in all but software innovations.
India has always thought best to work at its own pace. The country is spiritual, democratic and introspective. Demagogy may have its vestiges in its political system as corruption and slow pace of reform indicate as much. However, India continuous to have respect for its own traditions and will open up its shores to foreigners slowly and on its own terms.
The country is still not aware of its own potential. But the famed exploits in software, the dedication to doing the basics right is commendable. The awareness of the importance of technology was felt acutely after independence, and the Indian institute of technology was established in 1952. The economy might not have opened up at that time but the onus was on creating an educated work force. This was a strategic decision meant to create a savvy workforce that would help build a defence apparatus, which could meet the need for a technologically advanced defence system. Of course, the utility of technology in other sectors was also taken into consideration and more institutes of technology have been built ever since.
The report card is a mixed one. There is not doubt that India had the potential to do much well. Indians, in the urban and educated cities, are oriented to academic pursuit. When given the ground, they can be very opportunistic and ambitious. The millions of millionaires of Indian origin prove that point. The economy has done well in as much as industrialization is concerned. Improvement in ICT and general industry has been supersonic. The country is poised to move forward.
Ershad Khandker is a communication consultant.