Courtesy of Bandeep SinghShankkar Aiyar.Shankkar Aiyar is the author of “Accidental India: A History of the Nation's Passage Through Crisis and Change.†An award-winning journalist and columnist, he has reported on the political economy of India for more than 30 years.
In “Accidental India,†Mr. Aiyar analyses major turning points in India's recent history, from economic liberalization in 1991 to the passage of the Right to Information Act in 2005. Tracing the genesis of each of these changes, he argues that the key decisions made in the country since independence have not arisen from foresight and planning but have been the accidental results of crises.
He recently spoke with India Ink about the book, the current crisis in India and the problems with India's model of governance.
When did you first start to notice this trend? How did the idea strike you that this was a repeated pattern?
The genesis of this book can be traced to when I reported on crates of gold from the Reserve Bank of India being furtively loaded on an aircraft. I thought that this was no different from an ordinary household that pawns its jewelry to get out of a crisis. Over the past 30 years, as I have reported on the political economy of India, I have seen this repeated in micro- and macro-events.
Why does India seem to need to wait for a moment of crisis to react? What do you think it is about India that makes the country need a critical condition to change?
The answer is hidden in the granularity of politics. Because we are a diverse nation and there are diverse interests, the political leadership is unable to communicate what I define as the national interest and resorts to what is electorally profitable. Meanwhile the bureaucracy tends to sustain the status quo, as disruption is not convenient for them and the voters tend to accept what is morally satisfying. Because of all these factors, change has been stalled in the country. In the wake of a crisis, people tend to accept disruption and change because the choice is taken away from them.
Yet, as you discuss in the epilogue, not every crisis leads to change.
When the crisis is not vociferous the problems continue unabated. For instance, a country that has been able to move forward in issues as complex as space technology and nuclear technology has not been able to resolve malnutrition. While malnutrition is a problem that has been arou nd for a long time, because the crisis is silent it doesn't get addressed. We have had a program to address malnutrition for over 25 years, yet we are faring miserably. The life expectancy at birth is better in countries like Iraq and Guatemala than in India.
What is it about this model of governance that necessitates a crisis?
Decision is locked in India in the many layers of government. At every level, groups with vested interests sustain the status quo by stalling change. Inefficiency in the system enables those in positions of power to manipulate the system.
You say that the much-touted “Hindu rate of growth†is but a reflection of “the Indian rate of change.†In what way is the trajectory of growth in India related to India's pace of change?
The moment you clear up the multiple layers involved in the process of decision making, you will speed up the process and remove inefficiency from the system. At present the process of taking decisions takes painfully long, while the implementation takes even more time. By the time it is possible to judge the outcome of the decision, the person who made the decision is possibly not in power anymore â€" so there is no accountability in the system.
If a country says we are going to spend x amount on roads, at the end of the year we must know what amount what spent, how many kilometers were added, how that money was used. That system of checks and balances does not presently exist in India.
India today is also poised at a moment of change. The current administration has been put in the spotlight with a number of charges of corruption, and there is pressure on for immediate reforms. How does this notion of accidental change relate to the current phase of India's trajectory?
Crisis robs the po litical establishment of all excuses and alibis and ends indecision and procrastination. We've had a slowdown for nine quarters but the government has been in perpetual denial for the last two years. It does not take an economist to know that a combination of high inflation and low growth is bad news, but yet nobody acts on it until Standard & Poor and Fitch said they would review our rating. The fear of a junk rating alarmed the political establishment, and then we saw announcements from the finance minister to improve the investment climate and so forth.
Once the crisis abates, the follow-through ends. In 1991 we dismantled the Licence Raj, and it should have followed that we got rid of the whole complex permission system. But that didn't happen. The momentum ended as soon as the 1991 administration was confronted with electoral results in Karnataka and some other states. According to the World Bank we are still ranked 132 out of 183 countries in ease of doing busine ss. So obviously, not many changes have been made.
Is this a symptom of a vacuum in leadership and a lack of vision in the country?
Vision comes from your understanding of what needs to be done. Every government in India that comes into power has a vague agenda but no specific plan. On any issue, all the parties have a similar articulation of the problem but none of the parties will articulate a solution.
As Indians we are overinvested in promises and underinvested in performance. As voters, Indians seek promises and don't reward those who perform. It is a very curious truth, but this kind of system could not have been sustained without the unstated cooperation of the voters. They have let it happen. I would like to see the leaders of political parties stand up and say that these are the five or six big issues that we need to resolve, let us all agree that they need to be resolved and let's create a p lan to do it. Governments should come in with an agenda and there should be a midterm and annual outcome report to judge how much they have achieved.
You have said that the Unique Identity scheme is a way to “prevent the poor from being robbed and the corrupt from being enriched†and could become “the basis for reforms.†Can this mechanism be used to bring about institutional change?
One of the reasons why most government schemes fail is that there is no mechanism to identify the poor. The Unique Identity scheme allows you to identify the targeted people and get past the process of delivering commodities to people â€" which is where the siphoning and corruption takes place. In a system of direct transfer there is less chance of leakage.
Is there a danger in relying too much on crisis to deliver the trigger for change?
The danger is embedded in the notion of crisis. In a crisis the situation is like a basement sale, there is no room to negotiate the best deal. You are faced with a fait accompli and you deal with it. You don't get the best deal, which is why it is not a good idea.
