The Myth of the New India

Pankaj Sahib,
Thank you for sharing this excellent and realistic article. I, for one, never believed that India was all that bad when everyone was claiming doom and gloom, and I also never believed the ``India Shining`` bullshit. Now for the specifics of this article:

{``and the stock market, which had enjoyed record growth in the last two years, fell nearly 20 percent in two weeks, wiping out some $2.4 billion in investor wealth in just four days. ...``}

Yes, we all heard about it from Gujja`s demise and his claims that India was going to hell. Of course, I didn`t believe him then either.

{``It was not so long ago that India appeared in the American press as a poor, backward and often violent nation, saddled with an inefficient bureaucracy and, though officially nonaligned, friendly to the Soviet Union. Suddenly the country seems to be not only a ``roaring capitalist success story`` but also, according to Foreign Affairs, an ``emerging strategic partner of the United States.`` ``}

That is typically American media hype and more bullshit - it promotes those it favors and labels as ``terrorist`` or ``backward`` those it is against - basically the litmus test is one`s position on Israel. All of a sudden, that greatest of actors of the famed ``Mad Max`` and ``Braveheart`` renown is a wimpy, cowardly, stupid, and drunken anti-Semite. If you look at the old issues of Playboy, it was always making fun of Soviet and other Communist women as old, ugly, fat, and scarf-covered babushkas. With the fall of the Soviet Union and the demise of Communism, women from Eastern Europe (Russia, Ukraine, Poland, Czech Republic, Slovakia, Hungary, Lithuania, Latvia, Estonia, Romania, and Bulgaria) became, all of a sudden, sexy, beautiful foxes, worthy of being portrayed in their birthday suits for Playboy`s incessant ``Women of ....`` issues. The case with India is the same - with its new-found pro-Israeli policy, the US press has discovered ``shining`` India

{``But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country`s $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106. ``}

and 2106 is right around the corner. :)

{``Nor is India rising very fast on the report`s Human Development index, where it ranks 127, just two rungs above Myanmar and more than 70 below Cuba and Mexico. ``}

...and that`s with Castro still alive and most people not knowing what Myanmar is.

{``Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths. ``}

But why are all these wealthy and elite Injuns all on Chowk? Instead of cheering incessantly for the Israeli advance they should be working hard for India`s benefit. There is only so much heeng one can stuff in a pom pom.

``Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths.``

Yeah no kidding sherlock!!.... Only people who are complacent and believe on all kinds of myths are the commies... it`s commie belief in their outdated policies which has brought the country where it is today....

nobody who has half a brain ever said india doesn`t have problems... least of the ``wealthy inside and outside the country`` that the author is heaping scorn on... 50 years commie rule kept india poor where as just 15 years of hardwork by the ``wealthy inside and outside the country`` has produced tremendous results and has potential to lift more and more people out of poverty... if only commies and corrupt let the progressive policies be implmemented in this benighted nation...

And typical of commie rant - the author has no suggestions whatsover what he wants to do to produce better results... he has on constructive ideas, all he does is put down people who have actually made a difference and has potential to make a difference - through hard work...

Re: # 1 salim
[..``I, for one, never believed that India was all that bad when everyone was claiming doom and gloom``]

... which shows how much you know... India is actually pretty bad.... like the author says - half the children are mal-nourished, and that`s after the economic reformation, so you can imagine how bad it has been...

it`s bad because of the commies like the author - the ranters, the hacks and the fools.... these people cry buckets in name of poor and then block all the policies that will actually benefit the poor...

India is NOT shining - not by any stretch of the word... it will never shine until the fools still control the economic policies... until they shut up and let people who know better work.... The ``shining`` ain`t happening.... not by 2106, not even by 3016... don`t under-estimate power of the fools...

+++

``wealthy and elite Injuns`` that you are heaping scorn on - most of them come from middle/lower-middle backgrounds... the so called ``wealth`` they have today has come from hard work, after years of slogging .... nobody has handed anything to them... unlike the commies who cry copious tears for poor and run around JNU campus like losers making big speeches and do nothing productive...

So cut the cr@p...

I only read the teaser.

1.3 million is 1.3 million more than the reds ever accomplished.

Ref Bj003 #4

[I only read the teaser.

1.3 million is 1.3 million more than the reds ever accomplished.]

And the critical fact is that the code coolies laboring for these despised foreign companies are earning more in their first year of employment than their fathers did at the end of their 35-year-long career.

This reatrded article was already picked apart numerous times. No one disputes the facts that Mr. Mishra presents, yet what are the implied conclusions that Mr. Mishra presents?

``No labor-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already. ``

True. Hence India must work towards liberalizing the labor laws, eliminating the stranglehold the left has on job creation and bring about a more business friendly labor policy. In addition, India must bring about changes in infrastructure and reduce government corruption and red-tapism, which is a direct consequence of government over-regulation in the first place. When our infrastructure allows for loigistics and distribution costs to be reduced, and the labor policy allows for flexibility i n hiring and firing, jobs will be created.

The problems you mentioned are typical of all third world countries, not just India. Third world countries are like a jet plane that`s being piloted by a small elite... while rest of the country doesn`t even know where & how to get an air ticket.

Specifically it boils down to the following inequalities:

1. Unequal information. Elites have information about stock market, laws, economic opportunities... the masses don`t.

2. Differences in family size. Elites have small families, the poor masses have large ones. This means even making ends meet is a challenge.

3. Unequal distribution of jobs and social services

However, in the case of India and Pakistan, another factor also complicates matter:

4. Absence of micro-lending. Large corporations and business families are preferred in loan making. Entrepreneurs and small family owned businesses don`t have access to credit.

This article is dated and has been dissected heavily here and at many other places in the blogosphere.
Off the topic, I rather enjoyed Mishra`s review of ``The Ground beneath her feet``.

The review in #7 is in my ilog.

Pankaj-ji is yet another JNU jhola-wala who pines for the bygone days of indira gandhi and license raj.

Unfortunately, we remember those days only too well. I remember when a shoe manufacturer from calcutta had to go to Delhi to beg an increase in quote of shoes. It was refused and his workers had to go home and people had to go without shoes.

Everyday we would be told: dont bother to work hard, there are too many poor people, how can any of you rise? Its too hard, just accept your destiny. We rejected this bakwaas as we should reject this ignorant essay from pankaj.

---

Escaping the `Hindu rate of growth`
Critics of the liberalisation of India`s economy are wrong. Indians will be lifted out of poverty by economic growth not a rigid adherence to the principle of equality.
Salil Tripathi

Pankaj Mishra is a fine writer who has deepened our understanding of Indian politics, by firmly standing up to the excesses of the Indian state. He has also explored the meaning of Buddhism in our times, and has earned his place as a litterateur, editing the essays of VS Naipaul, and writing a fine novel, The Romantics. Now he has tried his hand at economics, and argued here that the west should not get too excited about the ``rise`` of India and China; in fact, India and China were doing fine during the 1950s and 1980s, when they had shunned market-based economics. Their embrace of globalization is not necessarily a good thing - for the west and for the Indians and Chinese.

Mishra builds his argument by pointing out that during the period 1950-1980, when Indian leaders were inspired by Harold Laski and pursued a Soviet-style model of planned economy in which the state occupied the commanding heights of the economy, the Indian economy grew 3.5% a year. Now such a growth rate may appear mouth-watering to Eurosclerotic economies, which are lucky if they grow 2% a year, but a rate of 3.5% for a poor, emerging economy is low by any reckoning. Indeed, the famous Indian economist Raj Krishna dismissed it as the ``Hindu rate of growth``. Mishra probably sees virtue in that modest growth rate; other economists have called it stagnation, because during that period, India`s population was rising 2.5% a year, delighting only the Malthusians who wanted facts to support their theory, that a poor, large, overpopulated country cannot feed itself. Indeed, for much of the 1960s and 1970s, India depended on food aid from many countries, including the United States, which offered surplus crops under PL 480. It took the controversial Green Revolution (pdf) to fill Indian granaries, and today it is not only self-sufficient, but has begun exporting food (but more about that in a moment).

So the growth rate of 3.5% is not something India should brag about, particularly when we look at what happened afterwards. In the last decade, in fact, India has grown at double, if not triple that rate - and that has happened after India embraced globalization, and liberalized its economy from some crippling controls. (Much more needs to be done, but that`s a matter for another time.) This year, economists estimate the Indian economy to grow by 9%. And over the last several years, its growth rate has ranged between 6.5% and 8%. Surely Mishra does not want India to continue to grow at the bullock-cart pace, which is admired only by European intellectuals.

To put Indian growth in perspective: when it grew at 7.5% last year, India`s income rose by an amount higher than the total income of Portugal ($194 billion), Norway ($183 billion), or Denmark ($178 billion) that year. It was the equivalent of adding a rich country`s economy to a very poor one. More important, India has reduced the number of people living in abject poverty, even though its population has increased significantly. Once again, facts: In 1991, 36% of India`s 846 million people, or a little over 304 million people, lived on less than one dollar a day, the measure economists at the World Bank use to define absolute poverty. That number - of 304 million people - represented possibly the highest-ever agglomeration of poor people in the world in one country at any time. Ten years later, the proportion of India`s poorest dropped to 26% - a decline not only of 10 percentage points, but also in absolute terms. By 2006, India`s population had risen to 1.02 billion people. If the proportion of poor is still at 26%, it means 267 million people now lived in absolute poverty. What it also means is that even though India added 156 million more people to its population during that decade - a figure combining the total populations of Britain, France and Spain put together - during that period, the number of poor people in India actually fell by 37 million, or the size of Poland. Had the poverty level remained the same, there would have been 361 million poor in India. Instead, the Indian economy had lifted 94 million people out of absolute poverty during that period - that`s 12 million more people than the entire population of Germany, the most populous state in the European Union. Such growth would simply have not happened if India had not put in place macroeconomic changes in 1991.

What concerns critics of India`s market-oriented approach is that this growth appears to be distributed unevenly. (Fact: the gini coefficient, which measures inequality, has not changed appreciably over the last decade; it is still at 0.33, where a score of zero indicates perfect equality, and a score of 1, perfect inequality). Mishra is right in pointing out that China`s gini coefficient has worsened, and at 0.48 it is probably higher than at any time, particularly before the communist revolution. Dismayed by the fact that Jung Chang`s view of Mao is shaping our view of China (reviewed here and here), Mishra lauds Mao-era achievements. Even Mao is not an evil without blemish, but it is remarkable to celebrate a leader who was responsible for the so-called Great Leap Forward and the Cultural Revolution, which destroyed the Chinese countryside, killed and starved millions, and ruined countless lives, and wounded that proud country so grievously that it is still trying to recover from those horrors.

What could prompt this defence of India and China between 1950s and 1980s? It seems to me it is out of Mishra`s genuine concern for equality. Rapid economic growth does make some people, and some parts of a country more prosperous than others. But the question to be asked is: are those being left behind denied access to opportunities that can make them prosperous as well? That should be the progressive agenda, not opposing the economic process that is finally lifting millions of Indians out of poverty. The pursuit of equality is a noble goal if what is being distributed is wealth; not if what`s being redistributed is poverty. An extremely poor society may be ``equal``, but that`s not necessarily a good thing, if the entire population earns two dollars a day. Rather than focusing on equality of outcomes - a concern common among many who call themselves progressive - they should think of equality of opportunity. And then watch the economies grow.

To be sure, there are a million other problems in India - it has the largest number of illiterate people in the world; despite islands of excellence, its healthcare system is unable to eliminate entirely preventable diseases in many parts of India; too many of its little girls and many boys don`t complete school. It would be far better for India if its government gets off those commanding heights of the economy, and addresses these fundamental problems. Then, the kind of India that rises will be the envy of all, not just the west.

No country the size of India, can go from poor to rich within one generation. It is impossible. At best it can go from poor to not poor.........even China was ranked 90th or so in HDI, while Libya, Russia, Cuba and Mexico are around 50......

On the whole, however, I would have to say India is pointed in the right direction. One can safely conclude that ten years from now, India would be better off economically than it is today. And then ten years after that, even more so.........

That is what is important for third world countries, i.e. are the pointed in the right direction economically and with institutions to support the society. So while I have always found the comments of many Indians, regarding India on this site, to be overly bullish to the point of being outlandish, I would also have to say that this article is overly pessimistic.......The true situation is probably in between somewhere.........

Having said that, I have never been to India, so I cannot claim authority over the subject......

Re: # 7
[....The problems you mentioned are typical of all third world countries, not just India....]

Yes, but incase of india, it does NOT have to be that way... In many third world countires - there are structural/social problems that may be hard to overcome - but in India, that`s not the case... it`s only a matter of discarding policies that have proved to be utter failures and going full speed for the ones that have proved to have worked...

... it`s the sheer intellectual laziness that`s holding the nation back... that`s what is so frustrating and infuriating... And people like Pankaj Mishra are eptiome that stupidity.....

Re: #2,3 mohar

Exactly!

There is nothing mythical about the New India -or Old India. Both are real in India today. The facts presented by Pankaj Mishra are indisputable, what is disputable however is the underlying assumption, that things were better under the Nehruvian Hindu Rate of growth. People forget that during that period, not only the economy was moving at a snail`s pace, there was hardly any development in the social field, the literacy levels and rural health remained very low and there was hardly any development to improve social infrastructure, roads, water or power supply. What that period did achieve however, was the throttling of entrepreneurship by a hidebound bureaucracy and protected industrialists.

The only valid criticism of today`s economy is that India is a democracy and not a dictatorship; so a better economic distribution is a political necessity. Moreover, if the schemes like the Rural Employment scheme are implemented imaginatively, they can create a well needed soci0-economic infrastructure at the villlage level, besides providing a greater share of the growing pie to the have-nots.

bulleya#11

You may have noticed that, on this board, all the chest-thumping Indian chowkies have acknowledged India`s problems and people like Mohar are sounding quite pessimistic. Where they disagree with Pankaj Mishras of this world is the solution to the problems mentioned by Mishra.

<<< Many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths. >>>

They ``choose`` to believe those myths because those myths keep them in business. The facts state that India is an extremely poor nation, being used by the West that is benefitting from the base built by its socialist past as it is doing in China on a larger scale. These so-called myths that are wrapped up in gold and fanfare affect less than 1% of the population of India, the rest are either hidden away in badly measured poverty statistics that paint a rosy picture or cast aside by images of one or two or a dozen who have made it big. It is quite pathetic how these myth mongers are ``content`` with being pseudo-slaves and coolies of the West and use that as a sign of progress.

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