Is India’s Shine Gone? (Part Two)

Attempts by India’s governing party, the BJP, to play up the country’s recent economic success and take credit for it backfired spectacularly. India’s rural poor, it emerged, did not buy the success – much less give anyone credit. So the BJP is out and the Congress Party in power. What next for India? (Part two of a two-part series.) “…India’s economy, for instance, could be larger than Japan’s by 2032…” – Goldman Sachs, October 2003. A new Silicon Valley sprouting in Bangalore. A roaring economy achieving nearly nine percent growth in 2003. A rising hysteria that every good US job might be outsourced to Mumbai. And suddenly India was no longer a byword for poverty. It seemed the country had achieved that Leninist fantasy – leaping stages of development. From subsistence farming to software services almost overnight. To be sure, about 80 percent of Indians were – as commentator Sundeep Waslekar pointed out – still too poor to afford a bicycle. But the rest had catapulted their country to the forefront of the high-tech global economy. In fact, no. What was an idle fantasy for Lenin remains so today. India has not leapt over anything. In India’s recent growth there is, unfortunately, less than meets the eye. The story of India’s unlikely boom is extraordinary but ultimately tragic. It began in the 1980s, when the ruling Congress Party attempted to see off the opposition BJP by co-opting the BJP’s business backers. The government – long hostile to private business – began handing out favors. Though meager, this was enough. India’s businesses, beaten down by decades of central planning, responded...

Is India’s Shine Gone? (Part One)

Attempts by India’s governing party, the BJP, to play up the country’s recent economic success and take credit for it backfired spectacularly. India’s rural poor, it emerged, did not buy the success – much less give anyone credit. So the BJP is out and the Congress Party in power. What next for India? (Part one of a two-part series.) “…it was hard not to feel the strength of the hopes and desires of the people lining up to vote; hard not to see poignancy in the devotion they brought to their only and very limited intervention in the unknown outside world; hard not to be moved by the eagerness with which they embraced their chance to alter the world that wielded such arbitrary power over their lives.” – Indian journalist Pankaj Mishra, observing elections. First reactions to India’s shocking election results were sharp and negative. The markets reeled – India’s benchmark Sensex fell by 16 percent, and foreign investors pulled a net $495 million out of the country’s stock markets. But in reality, the elections demonstrated, powerfully, that the basic laws of Indian democracy, which have kept the country stable for decades, are still in force. India has historically done a spectacularly poor job of delivering benefits to the poorest segments of society. Statistics on infant mortality are a revealing measure of this kind of basic distributional equity. It usually does not take much to keep a child alive – access to clean water, adequate nutrition, sanitation, basic medical care. Hence a high infant mortality rate indicates a profound breakdown in the most fundamental functions of government. On this...