Book Excerpts

Read an Excerpt from ‘Unshackling India’

Unshackling India examines the question: Can India use the next twenty-five years, when it will reach the hundredth year of independence, to restructure not only its economy but rejuvenate its democratic energy and unshackle its potential-to become a genuinely developed economy by 2047? The book argues that India can foster a prosperous and inclusive economy if it sets its mind to it, acknowledges the hard truths, and lays out the clear choices and new ideas India must adopt towards that end. Read an excerpt:

On 15 August 1947, at the stroke of midnight, Pandit Jawaharlal Nehru, independent India’s first prime minister, gave his famous ‘Tryst with Destiny’ speech to the Constituent Assembly of India. But a tryst simply means a dalliance, an assignation or a date. It is time, some seventy-five years later, to aim higher and try to ‘consummate’ that destiny. Between now and 2047, some twenty-five years from now, India must strive to cross the so-called ‘middle-income trap’ and become an advanced, developed country. With a pandemic-ravaged economy and society, that path will not be an easy one, especially in a country with such huge diversity.

The venerable industrialist Jamsetji Tata said, ‘I do not want India to be an economic superpower. I want India to be a happy country.’ He was both right and wrong. India can be both or neither. It cannot be happy unless it achieves a certain level of sustainable prosperity, and it cannot prosper unless its development is more inclusive and removes disparities in income, gender, caste, religion and is sustainable. As countries around the world are learning, you cannot grow and clean up later; you cannot grow with huge disparities as social strife sets in and when populist politicians can spread hatred and fear. Balance is needed.

The two go together—a certain level of prosperity is needed to be happy. But just being a richer country does not make India a happier nation. If India reaches an average yearly per capita income level of $12,500 by 2047—considered to be the cut-off to move from middle-income status to high-income status—roughly where Mauritius or Romania is today, with a projected population of 1.6 billion, it will be a $20 trillion economy close to the size of the US today. It will be an economic superpower. Even if it achieves a level of income of $10,000, roughly where Mexico or Argentina are today, India will be a $16 trillion economy—the third largest in the world—but by no means will it be a happy country if it has their level of income inequality and, most likely, just like them, will be stuck in a middle-income trap. The point is that, given its size, India is likely to be the world’s third-largest economy by 2047—but whether it will be a happy country, more inclusive, less unequal or go by way of Latin America remains to be seen.

In this book, we have tried to show how India needs to be reshaped to become not just a more prosperous but also a happier nation. A nation that takes its rightful place in the world but is also a beacon to others in becoming a more inclusive, democratic, sustainable society, which provides a better life for its girls and marginalized communities. A genuinely secular and caring society, with a state that belongs to the people and not an overbearing state that stifles innovation, ingenuity and initiative.

But in any look forward, we must factor in the ravages of the pandemic. India’s GDP will not recover to FY19-20 levels well into FY22-23. The second wave has ensured that, and a third wave may also hit India well before much of the population has been vaccinated. The seventy-fifth anniversary of independent India in 2022 will not be a reason for a full-hearted celebration. But, as the famous scientist Albert Einstein said, every crisis presents an opportunity as well. What trajectory India’s economy will take post-pandemic, will depend on our actions. It could recover and go back to its past growth trajectory of 6-7 percent growth that we have seen since 2000, it could take a hit and slump along at 3-4 per cent growth—the kind of growth India saw in the period 1960–80—or it could be transformed in significant ways to accelerate growth to 8-9 per cent—but more inclusive and sustainable—the growth India needs to utilize its demographic dividend. We could have a metamorphosis—a huge transformation that this book has tried to chart out. It is not predetermined. As the Mahatma aptly said, ‘The future dependson what we do now.’

An economy or, for that matter, the broader society is a mix of moving parts. When they grind together at the right gear, the economy can move ahead and if all are on board, society can prosper in an inclusive manner. If not, social strife sets in and does further damage to the economy. Think of an economy as a bus. If the bus’s gearbox is impaired, the best that is achievable is maybe second gear. To get it to move faster at fourth or fifth gear, the gearbox must be fixed. If the bus is overloaded, then, too, it cannot move fast. If different parts do not work, the exhaust system or the steering wheel, then the bus moves in fits and starts or veers off in the wrong direction. And if the lights are not working, the bus can only be used during daylight. If any of the parts malfunction, the bus is not travel worthy.

It is the same for the economy: if some parts are not working, the country cannot compete and slows down. If you neglect health and education, you cannot move up the development ladder. If you neglect infrastructure, your economy cannot compete. If you neglect its defences, it can be taken over. If you neglect its finances, it will be unable to deliver the credit without which no modern economy can thrive. The many parts must come together to make the economy function at top gear.

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