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How India will plod to prosperity

In his book, Mr Ninan summons his encyclopedic knowledge of the Indian scene to present a rich panorama, through which he explains how India has reached where it has today and where it might be headed

Nayan Chanda 

The Challenge and Promise of India's Future
T N Ninan

Penguin; 354 pages; Rs 699

India has come a long way since the time experts anticipated its impending breakup. The Washington Post's South Asia bureau chief, Selig Harrison, titled his 1960 book, India: The Most Dangerous Decade where he saw India torn asunder by centrifugal forces. The onset of economic reforms in the 1990s turned that gloomy tide, and by the beginning of the 21st century, books on India featured triumphant-sounding titles with words like "rising" and "great power". Hopeful titles even bracketed China and India together as the new torchbearers of growth.

With The Turn of the Tortoise, veteran journalist T N Ninan has brought the swinging pendulum of India analysis back to a sober middle. No, India is not in the same league as China and, as the largest poor state, is not a superpower either. But for all its sloth, corruption and populist economics, the country is stirring. And given its sheer size, by simply continuing to plod along at its tortoise-like pace, India can still become the world's third-largest economy before 2040.

Readers of this newspaper are familiar with Mr Ninan's insightful column "Weekend Ruminations". In this, his first book, Mr Ninan summons his encyclopedic knowledge of the Indian scene to present a rich panorama, through which he explains how India has reached where it has today and where it might be headed. What makes his well-written book stand apart is not only his detailed analysis, based on first-hand observations of India's economic performance, but his ability to situate it in the global context - especially against the backdrop of a rising China.

Mr Ninan blames many of India's shortcomings on the state's decision to focus, not on its core responsibilities of governance, but on inserting itself into aspects of the economy in which it has no competence. By his reckoning, industry was set up as a vehicle to achieve myriad social and political objectives - rather than to produce high-quality goods. As a result, it delivered neither economic growth nor social benefit. Similarly, he bemoans the fact that while India lacks teachers, hospitals, doctors and judges the government continues to expend resources on trying to run airlines and manufacture motor scooters.

Corruption, both large and small, has eroded the foundations of the economy. Mr Ninan notes that Narendra Modi energised the electorate in 2014 by promising "minimum government, maximum governance." But so far, he has shown little desire to minimise government, quietly burying the reform proposals solicited from experts. In fact, since the publication of Mr Ninan's book, growing violence against minorities by Bharatiya Janata Party supporters and the government's indifferent response has made a mockery of Mr Modi's pledge of maximum governance.

Mr Ninan's well-documented tale of malfeasance, wrong-headed policies and leadership failures could make readers despondent about India's future. However, he notes that despite all its pitfalls and challenges, Indian democracy remains stable and vibrant. Despite governance failures, private enterprise has made India into a software giant and self-sufficient in food. Although nowhere near its fast-growing East Asian neighbours, India nevertheless has achieved 6.4 per cent annual growth in the past quarter century.

India's size has made it into a default hedge against a rising and aggressive China. Powers - from Washington to Tokyo and Canberra - who may otherwise have been apathetic toward India have instead rallied to support it, offering technology, aid and trade to counterbalance China. But Mr Ninan warns against complacency about a de facto Indo-US alliance. As a superpower, the US can change policy overnight, leaving India high and dry. "The hard fact is that India's rising international profile will not match China's ascendancy," he writes, "so it will have to play a complex strategic game or fall under the Chinese shadow."

In a short but telling chapter Mr Ninan shows the difference between flailing, argumentative Indians and the single-minded pursuit of growth by an authoritarian China. With its ambitious infrastructure and large-scale production China has emerged as the world's largest-trading power. It has converted this dominance into diplomatic clout and successfully undermined Indian influence in its neighbourhood. The Modi administration's promising start in regional diplomacy dissipated quickly, as India simply cannot match the depth of Chinese coffers. The simple truth, as Mr Ninan puts it, is "rapid economic growth remains the best foreign policy".

"A Great Power India might hope to become," Mr Ninan writes, "but it has the chains of poverty around its ankles. India has the world's largest number of absolute poor, the largest number of malnourished." His hard-hitting depiction of the fault lines of India's economic policy and the constraints its diversity and democratic institutions pose tend to support pessimistic observations about India always remaining a country of potential.

But the author concludes on a hopeful note, pointing to three positive megatrends that he finds emerging in India. First, markets in India are getting larger, making efficient growth possible. Second, private businesses are gradually replacing inefficient state-owned enterprises and, third, the task of reform is increasingly moving from the Centre to more dynamic state governments. Trends of tension and conflict are manifestations of an evolving society and polity, he notes, but the system itself is rock solid, which will ensure India reaches its goal of prosperity, even if it's at a tortoise's pace.

Nayan Chanda is Consulting Editor of YaleGlobal Online and former editor of Far Eastern Economic Review.

Disclosure: T N Ninan is Chairman of Business Standard Pvt Ltd

First Published: Thu, October 29 2015. 21:15 IST