A Tale of Two Countries — Part 3

{Previously, Part 1 and Part 2.}

Economic development – the main concern of this blog – is neither impossible nor inevitable. India, most unfortunately for the hundreds of millions of Indians who live lives of desperate poverty, is finding it nearly impossible to achieve any meaningful measure of development. Only in comparison to its own past does the India development story become somewhat palatable, but compared to other nations big and small, India does not fare well at all.

India’s GDP is Growing at 8 percent annually!

We have to be cautious when it comes to patting ourselves on the back for our GDP growth rates – it is remarkable because of even poorer performance in the past, and because India was so poor to begin with.

Granted India has moved beyond the “Nehru rate of growth” of the past and is growing in the high single-digit rates since the mid-90s. But it is worth keeping in mind that that growth rate is on a very small base. Adding $50 to the annual per capita income may look good in percentage terms – only if the base is $500. That same increase in absolute terms will be only 1 percent if the base were $5000.

Back to the question that I have been exploring in this series. What is the reason for India’s lack of development? Singapore was only an interesting counterpoint and does not really matter in the big picture. I used it only to evoke the predictable outrage that you cannot compare the two.

I have argued that India has major advantages compared to Singapore. First and foremost, India is a large country. Size is an advantage. So India’s failure relative to Singapore is even more of a shame than if they had been of comparable size.

Talking of comparable size, China can be easily compared to India is size. It has been growing at double-digit rates for around 30 years. That has put China in a league of its own – a league that India will not be able to join in the foreseeable future – when in fact it was poorer than India as late as 1978.

Humongous China is no tiny Singapore. So what gives? The facile answer is that China is an authoritarian nation while India is a democracy. That’s a huge pile of horseshit. Democracy is a far better system of governance than authoritarianism in the context of large economies.

Democracy or Authoritarian

Want proof? Compare the US and the erstwhile USSR. The US apparently did not suffer for its 200-year long history of democracy. Authoritarian USSR literally imploded. Western European countries did not fare too badly either, compared to the authoritarian Eastern European countries. Which of the two did better in economic development – democratic West Germany or authoritarian East Germany?

India had two great things going for it: its size and the democratic structure of government. So the question that we should ask ourselves is what is the missing ingredient? What is the secret sauce that makes the Indian dish to poisonously unpalatable?

As I had argued previously, explaining away India’s failure to develop by saying “India is a democracy” or that “India is a big country” does not amount to much more than a pile of – to put it most delicately – horseshit.

If instead of India and Singapore, had I compared the success of the US and the obvious failure of some small African nation, the arguments could have been made that the comparison was unfair since the US was, first a large nation, and second, it was a democracy. These “just-so” arguments can be safely ignored.

In light of the facts that India is a democracy and it’s a large economy – both decidedly good for development – India’s failure to develop becomes an even more unfortunate story.

Comparative studies of economies – democratic or not, large or small – have revealed many regularities and lessons. But that is in some sense orthogonal to our main concern. The most important question we should address is this: if it were not its size or its political structure, what other factors can explain India’s dismal failure to develop?

A Question of Life and Death

That question is important not merely as an academic exercise but it is a matter of life and death. If we had some handle on it, perhaps we can figure out how to fix the problem. We would at least have some hope of implementing a solution. Because as matters stand now, if we continue to stumble around in the dark without any illumination, it could be too late for India.

I have my own prejudices, hypotheses and conjectures about what went wrong, and what we need to do going ahead. They all start with the rather distasteful recognition that India is a desperately impoverished country. It does not give me pleasure to repeatedly mention this – and I am sure that no patriotic Indian can even read that characterization of India without feeling a stab in the heart.

Behind all the talk of India being (or becoming) a superpower, of India being a nuclear power, of India straining to get a seat on the UNSC, of India having so many billionaires, of India having IITs, of India being the largest democracy, of India being the a secular (whatever that means) state, of India sending a probe to the moon, of India exporting Bollywood movies, of India being an ancient civilization, of India’s past glories – behind all that lurk the terrible facts that India has the largest number of extremely poor people, that India has the largest number of illiterates, that India gets bullied by a failed Islamic state, that India’s education system is so flawed that its universities don’t rank even in the top 300 globally, that half of India’s children below five are malnourished, that . . . the list goes on.

You will no doubt see the problem differently (if you see any problem at all, that is) and consequently have a different set of recommendations from mine. So allow me to state my point of view here. Everything in these pages has had the implied disclaimer “These are my opinions and you are not obliged to agree with them.” Take it or leave it, is the offer.

I separate the sources of India’s failures into these categories.

* Structure of government
* Economic structure
* Social attitudes

They are interrelated, of course. The binding element is “Indians.” Indian social attitude determine what type of society India evolved, and how that society decided to govern itself, and hence the type of economic structure that the government put in place.

Each of those three deserve to be the subject of a blog post. For now, here are some random thoughts about them.

Structure of Government

India is a democracy. The voice of the people matters. Their votes give legitimacy to the government. That’s all very fine and good. What we have to keep in mind though, is that the people get to choose whom they wish to elevate to which rank. But the electorate does not get to choose what the rules of the game of governance are. Those rules are more or less hardcoded, and that was not democratically determined.

(Like in most cases, the rules are made by a handful of powerful people. Besides these rules are not made from behind a “veil of ignorance”, as John Rawls would have you do.)

Where did the rules come from? Who made those rules? When were they made?

Most of the rules were made by the British. They made them for their own benefit. The rules they made stacked the deck in the favor of the rulers, not the ruled. The British eventually left. But the rules they made suited the new rulers very well.

There was no violent overthrow of the British colonial government. There was no war – or even a battle – of independence. The British simply upped and left. The higher offices occupied by the British were seamlessly transferred to a few high ranking Indians. Gandhi was the king-maker and Nehru became the king.

The lower offices were any way in the hands of the natives. So no changes were required there. A few names changed here and there. ICS, for instance, became IAS. Instead of the queen of England, the president of India became the head of state.

Compare that to what the Americans did when the colonies declared independence. They rewrote all the rules from scratch. That’s instructive.

Economic Structure

The British considered the best way to extract and exploit resources from India was to control all aspects of the economy. And rightly so, since they were in India as colonial masters. They were not on a charity mission, or on a mission to develop India for India’s sake.

Command and control suited the new “brown masters” very well. The brown British intensified their hold on the economy.

(I should mention here that Nehru was not all that brown. Kashmiris are fair-skinned by Indian standards. His progeny continued to be fair-skinned. His grandson, Rajiv, married an Italian – further ensuring fair and lovely skin of his children – which basically means that they have an unfair advantage in a society which implicitly accords god-like stature to anyone white. But more of that later.)

So where were we? Oh yes, the British left. The new rulers intensified their grip on the economy. The license-quota-permit-control raj promoted enthusiastically by Nehru was taken to new heights by his daughter Indira Gandhi.

(I have heard that it was Mohandas K Gandhi who advised Feroze to change his name from Ghandi to Gandhi. Perhaps Gandhi had understood too well that he was like a god to Indians and that the Gandhi name will forever enthrall the Indians into obsequious obedience. Mix that with fair skins — which Gandhi could not have foreseen – and you have a winner!)

Anyhow, Nehru and later his daughter, firmly set the country on – to Hayek’s awesome phrase – the road to serfdom. Indians are economic serfs of their political overlords. Stripped of economic freedom, India slipped further behind in the race to development.

[Abrupt End: This has gotten too long. I will go into the details of this in a separate article. Also, in the next bit, I will explore the third bit – Social Structure – and then wrap up this one. And answer some of the comments that raise interesting questions. Thank you for your patience.]

{Read my responses to the comments to this series of posts.}

Author: Atanu Dey


16 thoughts on “A Tale of Two Countries — Part 3”

  1. Atanu

    Although I disagree with your attribution of all our failures to the Nehru-Gandhi family, I agree with your three reasons of our failure. I say reasons and not “sources” as you do because I think all three are effects, not causes. I don’t have any research to back my hunch but it’s our apathy at the root of it all. The ‘chalta hai’ attitude is what’s holding us back I think.

    And the worst part is that we have no clue how to correct this attitude. I see the passion with which you write and I relate to your frustrations but I wish the problem was structural which could be corrected. How do we correct attitudinal problems? How do we get millions and millions of people to change their attitudes so fundamentally?

    I happened to see an advert for Tourism India where Amir Khan is requesting people not to urinate on a busy road and not to spit on historical monuments… that’s the level we are at right now. All the problems you mentioned seem soo acceptable in light of that!


  2. Although I disagree with your attribution of all our failures to the Nehru-Gandhi family . . .

    So who do you attribute it to? Whose ideology has been controlling India up until now? I think democracy was not such a bad thing until India decided to have one and gave it a bad name. Another party took control for a brief time, but it was too brief a hold on power, they could not maintain it. India’s ruling party seems to have realized that Indians are so pathetic a peoples that the same family has to keep on ruling them just as they had been ruled by the Muslims and then the British. Why not say the truth? Is this not what Congress is telling peoples by their actions, that basically they are sheeple and Congress can do whatever it wants because the people never have the balls to demand accountability? Name one democracy in which the party leaders do not even need graduate from college? India does not even have that minimum, even people with criminal convictions can be in parliament in India, forget about accusation of criminal conduct. Does more need to be said? Given their condition, do Indians really deserve democracy or is democracy criminalizing the culture even more?
    I think V.S. Naipaul said that one has to have a “culture” to be a superpower, once he was invited to India to give a talk and he said there was no intellectual life in India, he said it straight although it was mean. India is a case of democracy gone riot, democracy is for free peoples with self-respect not slaves.
    If Indians do well in systems other than their own, does this not say that Indians might be congenitally incapable of self-rule?
    Either the scenario above or that the ruling party has to be defeated in elections and Indians need to give something else a chance in order for national self-respect to be restored.


  3. How do we get millions and millions of people to change their attitudes so fundamentally?

    You don’t. You need a band of people ruling who are loyal to principles, and they inspire obedience on account of their integrity as they will be willing to take action (stern steps which might be necessary in the case of India) to maintain order and not let things run riot. But they need to have discipline of steel to inspire obedience in people. Discipline in lower levels follows as the top maintains it. But such people requires real men in a nation. Also fellow feeling is necessary for nationhood, a sense of fellow suffering. This is lacking in Indians.
    The criminalization of Indian politics began with Indira Gandhi, as is general knowledge. You had electoral booths in places like UP and Bihar captured by thugs uner her rule, then then thugs realize that they themselves can be politicians as there is nothing to hold them back, and the governing party will support them if it can maintain hold on power through them.
    Now if you remove those with criminal records from politics in India, how less will parliament be?
    So please don’t think that people do not know what to do or what the problem really is, they are just too cowardly to organize and mobilize against the status quo.


  4. To explain away the “failures” (to put it mildly) of communism, the communist claims that socialism continues to be a mighty fine ideology, that the fault lay only with a few bad people (like Stalin). (Communists like Comrade N Ram, by the way, showcase China as a communist success story).

    To explain away the failures of Congress, the dynasty-vaadi argues that the party continues to be the best bet for India, Nehru was a great guy as are his progeny, and that the problem lay with continuing with a few policies that were good in Nehru’s time but no longer are.

    Recently, there was this news item that scientists discovered the “liberal” gene. It has long been believed that leftwingers are hardwired to be so. Scientific evidence apart, I believe that people get attracted to such ideas and ideologies as those that align with their own mental makeup. The founding fathers of America were free-thinkers and truly believed in devolving power to the people. Nehru was a control freak and a power-monger, a second-rate intellect consumed internally by a sense of inferiority, and socialism suited him best.


  5. “Although I disagree with your attribution of all our failures to the Nehru-Gandhi family…”

    “So who do you attribute it to? Whose ideology has been controlling India up until now?”

    Successful politicians do not have ideology. They tell people what people are happy to hear. There is no Nehru-Gandhi ideology controlling India. Nehru-Gandhi exploited their initial family position and people’s stupidity to line their coffers. Who, in a democracy with 90% literacy and 40% college graduates, would hire a family without any college degree for 50 years straight?

    To get the country to 90% literacy and 40% college graduates, we need to scale up school education much faster than birth rates (to cover lost ground). This we have to do without a sufficiently educated adult base to become school teachers! (Anyone good enough to be a school teacher immediately demands IT sector salaries. There’s also an unsurmountable population pyramid effect: the proportion of 0–15 year olds is among the highest in the world. They can only consume, not produce.) The only solution is to import school teachers and bring everyone born under compulsory school education immediately.

    Bloody civil war and genocide lurks very close otherwise!


  6. @larissa

    From your first comment, I sense an anger against the voters (and quite rightly) who elect their leaders to parliament. All these criticisms of the Nehru-Gandhi family would’ve stood had the family been running a dictatorial regime. But that’s not the case. India has had elections every five years (even less than that at times) and the country has time and again voted the Gandhi family to power. I just don’t accept that a country of over a billion people could be bullied by one family to regularly vote for them for over half a century.

    Besides, the Gandhis don’t even always have to aspire to rule the country. Sonia Gandhi avoided politics for many years before she was practically coaxed into taking the Congress leadership. And the Congress was at its weakest when a Gandhi wasn’t at the helm. The impetus that Sonia Gandhi gave them took them on an upswing that’s still going strong. Rahul Gandhi is perhaps the only person in India today who doesn’t publicly talk about becoming the next prime minister. (and I could rely only on his public statements because I don’t have a VIP access to his personal thoughts!)

    So it’s the people who vote them time and time again in power. So if the elected governments fail, the responsibility lies with the people who voted for that government, over and over and over again, and not with those who they elect to fail. Remember, people only get leaders that they deserve! Additionally, a fair share of responsibility lies with the opposition parties who are just poor clones of the Congress party.

    My argument is that we need to take the Congress on and we need to take the Gandhi family on. But we couldn’t do that by pulling cheap tricks. Yes Congress is corrupt but so is every other party! Why single them out?

    I have as much problem with the Congress and the Gandhis as perhaps you all do. But my problem with them is not that some of them were born in a foreign country or that their great-grandfathers took some horribly wrong decisions. My problem with the Congress and it’s leadership is that their ideas are tired and worn out, that they are deeply embedded in socialism, which is proved to have failed, that they’ve had plenty of opportunities to prove their metal and they’ve let the country down more often than not, and that they are not fit to take India where it should rightfully belong.

    I believe that these reasons are sufficient enough to challenge the current administration and their hold on India. And if we offer better alternatives to the voters, I am sure they will give them due consideration.

    But that alternative can’t be the “Hindu rashtra” crap because it doesn’t mean anything, it is more tired than the Congress and because it is a sure shot suicidal mission that India can’t afford to embark on!


  7. This argument that the fault is with the voters, not with the Nehru clan (or rulers in general) is hogwash.

    Telecom minister A Raja’s constituents did not vote him into power to help him mint money for himself, to cite one example.

    The flaw in a similar argument in another context would be readily apparent to us, so for seemingly intelligent people to make excuses for the Nehrus or Congress is pathetic. All opportunists and con-artists tend to shift blame from themselves to their victims. The maker of sleazy Indian films — double entendres, gore, obscenity — claims that viewers want the fare so he is providing it: ie, the blame is on the viewer, not the film-maker. Ditto is the argument of the purveyors of dumbed-down or tabloid journalism. But there are expectations, on the producer and the publisher, that they exhibit a sense of social responsibility, ethics and values. The expectations on politicians are far greater.


  8. @Ashish Deodhar,

    People didn’t vote “congress” to power, people voted their leaders who gave them carrots to power and these people are bought in an auction led by the congress themselves. UPA Govt. led by the Indian National Congress is an unholy communion of rascals led by Antonia Maino. To quote Atanu..leaders who are fed on kitchen scraps of 10 janpath. Over the decades many independent and small local parties have become integral part of congress. The disturbing fact that people have voted congress to power again and again rests on the fact that congress workers have mastered the art of buying votes for as little as a packet of Biryani, a quarter bottle of rum and few hundred rupees cash. Regional parties pay much more to woo voters but congress being the oldest masters, people stuck to congress. The poor do know that they have nothing to gain except for the free booze and money every election. The Govt. servants who constitute the educated chunk understand that their positions, pensions and promotions are safest with congress and hence always voted congress to power. Congress has mastered the art of keeping people clueless. This is no different to the way our British masters have ruled our forefathers. The British atleast built some institutions and infrastructure. Congress is only ruining it further with absolutely zero contribution to further the British model of development and prosperity. Look at South Africa…look at New Zealand, Look at Australia..they were all british colonies who still love British and hence are prosperous.


  9. @Loknath: stop frothing at the mouth and get a remedial critical analysis course.

    “congress workers have mastered the art of buying votes for as little as a packet of Biryani, a quarter bottle of rum and few hundred rupees cash”

    And why are generations of Indians content to be bought that cheap?

    “The poor do know that they have nothing to gain except for the free booze and money every election.”

    And keep procreating, knowing full well that their progeny will be exploited by a similar set of scums.

    The victim deserves to be blamed. Condoms cost 25 paise back in 1980s. Someone who couldn’t afford even that decided to be a parent.

    And NRI bloggers in AC rooms “analyze” the situation and blame, who else, Congress.


  10. In one of the Earlier blogs of Atanu, there was a mention of some Europian political writer, but i can not recall his name but it was quite convincing.

    In essence the writer said (As I understood):

    Tyranny or otherwise, in the long run, people’s acquiescence does matter and no ruler/government can rule with huge antagonism from its subjects for long.

    leaders represent the collective/average citizen’s IQ.

    Indian state of affairs is decided by indians and Congress/BJP are just place holders

    The development can only happen from grassroot levels, only when AAM AADMI wakes up to decide the best. Decentralization of power can help but its not in the interest of beurocrats and/or politicians for free rents. Too much of diversity can not work when aam aadmi is still not close to platonic thoughts. Economies of scale can only be understood by the most erudite and can not be thrusted upon the common folklore



    1. Sriram, the post you refer to in your comment is THE POLITICS OF OBEDIENCE: The Discourse of Voluntary Servitude. Here is a bit from that post — the following quoted material is written by Murray Rothbart:

      This fundamental insight was that every tyranny must necessarily be grounded upon general popular acceptance. In short, the bulk of the people themselves, for whatever reason, acquiesce in their own subjection. If this were not the case, no tyranny, indeed no governmental rule, could long endure. Hence, a government does not have to be popularly elected to enjoy general public support; for general public support is in the very nature of all governments that endure, including the most oppressive of tyrannies. The tyrant is but one person, and could scarcely command the obedience of another person, much less of an entire country, if most of the subjects did not grant their obedience by their own consent.

      The point is well worth bringing up in the context of India.


  11. @ashish deodhar
    I think you like to repeat all that we say on your posts and then add the appendage “But that alternative can’t be the “Hindu rashtra” crap because it doesn’t mean anything, it is more tired than the Congress and because it is a sure shot suicidal mission that India can’t afford to embark on!”
    What is “Hindu Rashtra crap”? Please explain yourself, I do not know what “Hindu Rashtra crap” means, all of your other points have already been mentioned by Atanu, you are merely repeating. Can you please artuculate what exactly this phrase encompasses, then I will tell you whether I agree or not with you as to whether this can be an alternative. No one opposes people like Sonia Gandhi simply on account of foreign origins, or Congress because Nehru took a few missteps (which were disastrous missteps) long ago. People are not as stupid as you think. Remember Nehru’s right hand man Menon turning India’s defense manufacturing to manufacturing pressure cookers? And then they had to beg America to help when the Chinese attacked and Indian army had nothing to fight with! Congress has clearly been a failure for India which today is a basket case after decades of their rule and their failed policies. Lack of social planning under Congress has resulted in quadrupling of population which makes all attempts at change simply terrifying.

    Actually even Nehru noticed that Congress was becoming very corrupt even in his time. He made a lot of missteps, and was clueless as to the realities of the world, but actual criminilization of politics occurred after him during the daughter’s rule and thereafter when the failed policies where not changed.
    Stuffing polling booths began with Indira Gandhi in places like Bihar and UP with the help of thugs. This is general knowledge. Then thugs in these places realized they could themselves win elections, as Congress would support them if it is able to win in these places. Criminilization or goonda politics began with Indira Gandhi. Why do you think there are so many in Parliament with criminal records? Can you tell me one democracy where this is allowed to happen? I am speaking of convictions, not even accusations of criminal behavior.

    “Besides, the Gandhis don’t even always have to aspire to rule the country. Sonia Gandhi avoided politics for many years before she was practically coaxed into taking the Congress leadership.”

    These are just mediocre people, the problem is their enablers in Congress who hold on to power through these people, as they have no other qualities which might make them attractive to people, other than by latching on to these people.
    By the way, what happened to address the numerous corruption scandals that have happened? Nothing.

    From a country which had a huge potential with 1/4 of the population it has today at the time of independence (failure to keep population under control is the biggest of public policy failures, yet there is no accountability for this), India has emerged as a basket case and an international embarrassment with more than 80% of the people living on less than $2 a day. No one respects India on the international scene, no matter if India’s English newspapers say otherwise. Its neighbors such as China started out poorer and with a huge population problem. Today China competes with America. We are simply trying to understand why this happened.
    So please do not say “HIndu Rashtra crap” won’t work, what won’t work?
    Please explain yourself.


  12. “Well, yes, but the argument that scumbags have a right to be scumbags because suckers can’t help being suckers, has no merit.”

    Again, remedial course in critical thinking and reasoning.

    No one claimed that scumbags have a right to be scumbags.

    Because statistically India is almost entirely composed of suckers, there is no one left to make life miserable for scumbags. That’s all.


  13. To make this clearer:

    It’s pointless to blame cholera or typhoid germs for doing what they do to people’s bodies.

    But a society which does not figure out how to beat the germs is backward and prone to epidemics.

    You can desist from blaming them out of some misplaced kindness, but their destiny is set nevertheless.


Comments are closed.

%d bloggers like this: