Reform delayed is reform denied: Time to make reforms part of everyday life

We have missed the bus before, but now reforms must become part of everyday conversation

India is a world champion in missing buses and economic opportunities. We adopted the mixed economy model after independence when the high-flying countries were going capitalist in the post-colonial era. We adopted the licence-permit raj and shackled our entrepreneurs when Japan and the Asian Tigers were busy building manufacturing and export competitiveness. 

We did not wake up even when China started reforming itself in the late 1980s, using the same Asian Tigers model. It took an external bankruptcy in the 1990s to abandon the licence-permit raj, but even then we did not go the whole hog and complete the reform circle by freeing our factor markets (labour, land, agriculture) and our social sectors (health and education). Net result: We skipped the entire manufacturing revolution and went straight into services, where the state-created handicaps to business were fewer. 

The lesson we need to internalise is this: When reforms come too late, businesses get around the problem by using other alternatives. Today, labour-saving and capital-guzzling investments in manufacturing will not create the kind of jobs that we could have created three decades ago. Entrepreneurs pole-vaulted over hurdles created by the state in pursuit of a “socialist pattern of society”. 

This does not mean that the deregulation and reforms promised by the Modi government are unimportant, but they won’t deliver rich dividends in terms of jobs today as they could have in the 1990s and early 2000s. But the deregulatory reforms, if carried through with diligence, will create a manufacturing renaissance that will indeed create jobs in the services sector. Services can grow when there are real products to sell and service. 

Like justice, reform delayed is reform denied. Not only that, delayed reforms cost the exchequer much more. As employment growth lags gross domestic product (GDP) growth, the state now has to offer freebie after freebie to prevent a restive youth population from turning violent and destructive. 

But it is not too late to reform services that will create jobs: Education and health, which are critical for a productive and educated workforce. 

Our primary education sucks, for it does not enable most children to master the ability to learn, which is what is needed for succeeding in a tech-mediated future work environment. The task of primary education is to inculcate in the child the basic ability to read, write and count (the 3Rs, so to speak), but most children learn only by rote, if at all. 

The purpose of undergraduate studies is to equip young adults to solve problems and learn skills that will get them a job. But our undergraduate education — especially in the non-engineering courses — does not produce graduates with usable skills. Instead, knowing that they cannot find a job, they learn the language of resentment and our woke educationalists and activists prepare many of them for activism rather than useful employment. 

In primary education, we should experiment with using private sector educationists to operate the state-owned school system (where the additional investment requirements to refurbish run-down schools and retrain teachers can be funded by philanthropy). Cheap, community-based home schooling can also be promoted since almost all cities have huge numbers of educated home-makers and educated unemployed youth who can probably teach the primary skills needed for kids. 

In health, our medical education is so expensive for those having to pay full fees that we are more likely to produce mercenaries than caring doctors. If you spend half a crore or more becoming a doctor, your first need is to earn a return on that investment, not help patients, which means fleecing patients who can afford to pay by recommending endless diagnostic tests or inflicting needless procedures. 

The way forward, in this age where medical databases and technology enable doctors to diagnose and prescribe remotely, is to upskill qualified nurses and physician assistants to do work that only doctors can do now. This group could include doctors who have already done Ayurveda or Unani courses (which means they too understand biology and basic health issues) by giving them bridge courses so that they can diagnose and prescribe allopathic medicines. 

Technology can be used for 90 per cent of the work done by MBBS doctors. 

Agriculture can be reformed if we merely stick to the Constitution that puts this sector in the State List, but the bulk of the costly and inefficient spending is done by the Centre, with its costly minimum support price architecture. Food security ought to be managed at the regional level, but since we do this at the Central level, it has led to us creating rice mountains, part of which rots. 

If the Centre were to merely tell states to ensure their own food security and build their own buffers — which means devolving the entire money now spent on food and fertiliser subsidies to states — many states would be happy to accept this money and additional responsibility. 

The reason why some of these sensible things may not happen is because of resistance by vested interests. We miss the reform bus repeatedly due to threats and barriers erected by narrow interests. Doctors who paid a fortune getting their medical degrees will be loath to expand competition in their core competence areas to nurses and physician assistants and Ayurveda practitioners. 

Teachers who benefit from regular school jobs and tuitions and coaching classes will be unhappy if home-schoolers pull the rug from under their exclusive privileges. Much of the money now spent on secondary schooling and undergraduate education is money down the drain. This has to change, but this would upset university administrations and professors used to a certain way of working with their own interests in mind. Farmers used to simply using ultra-subsidised urea to produce rice that can be sold at profitable levels through MSPs will not want the uncertainties involved in reforms. 

If reform delayed is reform denied, reforms left unexplained to the people will find the usual tripwires. This was one reason why the Modi government’s farm reforms had to be rolled back, as many powerful farmer organisations opposed it. Reform by stealth is no longer an option for any government, whether at the Centre, states, or local bodies. Reform has to become part of everyday conversations with all stakeholders. 

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The author is a senior journalist