India's Fortune

Title Imagining India: The Idea of a Renewed Nation

Author Nandan Nilekani

Publisher Penguin

Year 2009

Pages 528 pp.

Price $29.95

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Or take two other former "weaknesses": India's often-chaotic democracy and its booming population. In the 1970s and 1980s, Indians and foreigners alike bemoaned the fact that New Delhi, unlike Beijing, could not control the country's galloping population growth. Autocratic China was believed to have a clear advantage over India because it could do things like limit families to one child apiece. No sane Indian politician would propose such a measure; it would have guaranteed defeat at the ballot box, writes Nilekani. Prime Minister Indira Gandhi did attempt draconian population control once during India's only brief spell of autocracy in the 1970s by imposing a brutal sterilization policy on millions of India's poor, particularly its Muslim poor. She was booted from power as soon as free elections were restored.

Gandhi's failure three decades ago has become India's twenty-first-century "demographic dividend." Starting in 2015, the ratio of workers to retirees in China will start to drop relentlessly, imposing a large and then growing tax on production and creating a severe policy challenge for a communist state that has yet to devise a modern social safety net. In India, by contrast, the median age is 25 years and falling. India's increasing youthfulness will boost savings rates and economic growth almost as far as the eye can see. In this respect, at least, India's "democracy tax" would appear to be an advantage.

Another of India's great weaknesses historically has been its addiction to bureaucracy: near-infinite paperwork offers the government middlemen who master it many opportunities for corruption. And although much of that remains, large parts of the Indian state, most important, its tax-collection operations, have become IT savvy in recent years thanks to the demonstration effect provided by the extraordinary growth of India's private sector.

When computer imports were first proposed in the 1960s, Indian parliamentarians described them as "man-eating machines." Now, computer-related business generates millions of jobs. The communist government of West Bengal has even banned strikes at local call centers -- an extraordinary step for authorities backed by trade unions and a far cry from the day, in the 1980s, when a bureaucrat called the first computers to enter Indian government offices "advanced ledger posting machines."

It is now widely acknowledged that India has benefited from this ALPM revolution. By putting an end to the culture of "export pessimism" and helping create a dynamic private sector, people such as Nilekani have given their country a perfect demonstration of what Indian businesses can achieve overseas. Gone are the days when Indian products were known for their "terrible quality" -- "yellow paper, refrigerators that didn't cool and cars that backfired on their way off the assembly line," as Nikelani puts it. Gone, too, are the days when kleptocrats could stuff the ballot boxes. India's fully electronic and much more tamper-resistant voting system was on full display in India's general elections in April and May.

AFTER THE RISE

Challenges -- to use a polite word -- still loom, of course, and Nilekani's book really comes into its own in describing those. By far the most worrying ones relate to India's rapid environmental degradation and shortsighted energy policies. On these issues, it is again Gandhi, that towering figure of strength -- "the only man in a cabinet of old women," according to one wit of her time -- who now looks like the leading culprit. By proclaiming "development before environment," she created a mindset that endures.

She was not alone in endorsing this approach, but governments in the West have gotten away with it more easily. For much of the nineteenth and twentieth centuries, European powers could plunder their resource-rich colonies while exporting any surplus population there. But India today has no such outposts and no possibility of gaining any either. It is four times as populous as the United States with just one-third the territory. And New Delhi cannot plead ignorance of the consequences of environmental degradation at home (brown clouds, chemicals in rivers -- holy rivers, no less) or abroad (global warming). After all, the Intergovernmental Panel on Climate Change, which is headed by the Indian scientist Rajendra Pachauri, shared the Nobel Peace Prize with former U.S. Vice President Al Gore in 2007.

Which is why it is particularly vexing to hear Indian leaders declare that global warming is "nothing more than a 'Western conspiracy' meant to keep India poor and underdeveloped," as Nilekani recalls one cabinet minister telling him in an all-too-believable aside. Nilekani argues that given India's population density and shocking level of deforestation, its government must transcend the dichotomy between development and the environment. Soil degradation has reduced India's agricultural output by roughly one-fifth, and growing salination caused by poor water usage will cut output further still.

Indeed, India has already suffered so much environmental degradation at such a low level of development that it is now at risk of squandering perhaps its biggest achievement since independence: food security. Today, India has a food surplus: it exports a small amount of food and stores a large quantity in warehouses in case of famine. But according to Nilekani, if current trends continue, by 2030 it will need to import 30 percent of the food it consumes. It is already a prominent victim of global warming, and yet Indian politicians continue to see climate change through the prism of postcolonial rhetoric. The melting of the Himalayan glaciers has turned the once-bounty-providing grand rivers of Asia -- the Ganges, the Brahmaputra, the Irrawaddy -- into dry riverbeds for much of the year.