“Our vision of India,” the Nobel Prize-winning economist Amartya Sen said in a speech a couple of years ago, “cannot be one that is half California and half sub-Saharan Africa.”
It has become dangerously clichéd in recent years to speak of “two Indias.” (There are obviously as many Indias as there are Indians, but what good is nuance when it comes to rhetoric?) But it is undeniable that much of India has not been touched by the economic reforms. Some states, like Bihar, remain desperately impoverished, and tens of millions of people in the country still lack access to clean drinking water, and basic healthcare, and primary education.
This is not a failure of reforms. It is a failure of governance. In all the areas where the state remains paramount, it remains dysfunctional. It is a sign that the economy needs to be liberalized more, not less.
In recent years, the most common image used to depict the plight of the Indian poor is that of a farmer committing suicide—a worryingly common occurrence. And indeed, it is a failure of India that 60 percent of India depends on agriculture for a living—in most developed countries, that figure is closer to 5 percent. This is despite India achieving an agricultural surplus long ago, which should, in the normal course of things, have triggered an industrial revolution.
No such industrial revolution took place because of the many restrictions on business. Some of those have been removed—many other haven’t. Starting a business is still a nightmarish process: In their 2005 book, Law, Liberty and Livelihood, Parth Shah and Naveen Mandava wrote: “Entrepreneurs can expect to go through 11 steps to launch a business over 89 days on average.” (In Australia, it takes two days.)
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Tags: Amit Varma