Modi’s unrealistic American dreams

As the Prime Minister makes another U.S. trip, with hopes of attracting greater foreign investment, there are pressing domestic issues back home seeking his attention, issues like poverty, hunger and misgovernance. A ‘Digital India’ backed by greater FDI flows can only play a limited role in tackling these

Updated - September 25, 2015 05:10 pm IST

Published - September 23, 2015 12:25 am IST

There is at least one dimension in which the distance between Narendra Modi and Jawaharlal Nehru is not so great after all. I speak not of their fondness for the bandgala but of their > penchant for world travel. Not a day passes without us being informed of some impending visit by our Prime Minister. Right now, we are being bombarded with the details of the itinerary of his visit to the U.S. later this month. He will start, we’re told, with the annual meeting of the U.N. General Assembly and from there proceed to the west coast.

Nehru had undertaken this journey too, in 1949. However, we were a different country then, having inherited a bloodily-partitioned nation with a declining per capita income. On the other hand, India is today one of the world’s fastest-growing economies, hoarding a young labour stock and a substantial talent pool, making the task of its leadership a little easier by comparison.

While India must constantly engage with the rest of the world at all levels, the rest of the world does not hold the key to either the pace or inclusiveness of its economic growth. It is, therefore, altogether surprising that the leader of India should travel westward urging “Come make in India.”

India’s unique place in world order India is made to appear as a supplicant when no one asks it to be one. Nehru himself had travelled the world as the torchbearer both of an ancient civilisation and a cosmopolitan internationalism with roots in the West to which he considered himself a natural heir. Till the 1990s, many an Indian abroad would have been the beneficiary of praise from African students and American workers for India’s role in hastening the process of decolonisation. It is not without significance that India had been the first port of call for Nelson Mandela after the end of apartheid in South Africa.

Before it comes to be imagined that Nehru’s forays into the wider world had amounted only to showcasing Indian attire, we may want to remember that extraordinary financial inflows had been elicited then. Non-alignment brought with it an unexpected reward as the rival ideological blocks vied with one another to shower India with aid. Over a quarter of the total financing for the Second Five-Year Plan was via official aid from the rest of the world. Michal Kalecki, the astute Polish economist who was one among many intellectuals who had made a beeline for this quickening country, had remarked pithily that India’s policy of non-alignment was akin to “a clever calf sucking milk from two cows!”

It is also of interest that Nehru had shown no particular anxiety over wanting India as a permanent member of the U.N. Security Council, even as he thanklessly championed Communist China’s claims. It is not known what exactly he had thought of the prize itself, but it could not have escaped his attention that even when it was not a cabal of the rich and powerful it could hardly count as a democratic arrangement. Contrast this with India’s desperate attempts today to gain membership of this discredited club. But of course the world has changed since the fifties. Apartheid and colonialism have vanished, and China is firmly entrenched in the Security Council, and one might say with nary a thought for India’s inclusion.

So, one should not expect > Mr. Modi to travel to the U.S . with an anachronistic agenda. Yet, one may expect him to be clear of what it will yield in relation to India’s current priorities. An argument is usually made out in terms of attracting foreign direct investment (FDI) and, possibly, technology to drive the ‘Digital India’ programme.

It is incontestable that both foreign investment and the spread of Information and Communications Technology are very important for India. In fact, every effort must be made to accelerate their adoption. However, on FDI, much of what can be achieved via enabling legislation has been achieved. Further, the tariff barrier to trade has been rescinded along with quantitative controls.

Foreign trade accounts for more than 50 per cent of the Indian economy by now. However, the promised gains in manufacturing are disappointing, suggesting that domestic supply and demand conditions may be at least as important for Indian manufacturing as is an open trade regime. It is indeed correct that FDI has increased exponentially over the past one year, suggesting to some that this reflects a new international confidence in India’s economy. While the figure is impressive it is not unprecedented. In any case, FDI accounts for less than 10 per cent of total capital formation in the country. As for the IT tsars Mr. Modi is to meet in Silicon Valley, the U.S.-based IT industry, with its significant Indian presence, has long ago sensed the profit opportunity in engaging with India and does not need handholding. So it is likely to bide its time.

Altogether, while the government is right to pursue foreign investment and technology, it does give the impression of not giving as much importance to other areas. Without suggesting what these areas are, we might suggest that soon as the PM returns from abroad he goes on a virtual Bharat darshan . He could even remain in the PMO while travelling backwards in a time-machine. What would be the things that he will get to see?

Domestic issues, imported solutions He will find a farmer committing suicide in Hyderabad because he couldn’t afford medical care for his son. He will find that in Bihar, to which State he has promised an out-of-turn special assistance of Rs. 1.25 lakh crore, the overwhelming majority of rural households do not have access to sanitation. In Delhi, he will find a doctor of the All India Institute of Medical Sciences (AIIMS) announce on television that dengue is “endemic” to its population, a grave diagnosis indeed. In Rajasthan, a State run by his own party, he would find that a senior civil servant ran an extortion racket yielding four crores in ready rupees, thus taking the meaning of “ease of doing business” to an altogether new level. So, alighting from the time machine, he is likely to be struck by the thought that while ‘Digital India’ is a worthwhile project per se, it can only be a partial answer to what needs to be done in this vast and yet underdeveloped country.

The hardship of everyday life faced by Indians has a history far older than that of Mr. Modi’s prime ministership. It is the result of decades of misgovernance. Resolving the citizens’ problems also involves a role for the States, where his writ hardly runs. But, as Prime Minister he is expected to show leadership in providing solutions to these. The least he can do is to draw attention to them, set up bipartisan committees to propose permanent solutions, and suggest means of financing them. The role of the rest of the world — which, it seems, looms large in > Mr. Modi’s imagination — in solving these problems faced by the people of India is somewhat limited.

The technical element in the solutions is fully understood and entirely within our capability to handle. Even the financial constraints can be overcome through political will. For instance, should the public sector not be required to yield a much larger surplus than it does? And shouldn’t the government plead with the well off to give-up regressive consumption subsidies? Here, even Mr. Asaduddin Owaisi, with his niche presence in the political firmament, has shown greater statesmanship by reportedly proposing that subsidies for pilgrimages, mostly undertaken by men, be diverted to educate the girl child.

Nevertheless, we wish our Prime Minister an enjoyable visit to the San Francisco Bay Area where a festival of ideas awaits him. He will find that though California is the home of the IT industry, it also has a flourishing agriculture. He will find that it is a society where diversity is celebrated — as a result of which minorities bring their best to the table. He will find women, of Indian origin at that, in highest public office. And if he ever travels to the headquarters of the iconic Apple Computers, he will find that it is headed by a gay man. Being a keen observer, he can hardly remain unaffected by these rich rewards of freethinking. In turn, we await his safe return, hopefully rewired and ready, at last, to govern.

( The author teaches economics at Ashoka University. The views expressed are personal. )

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