September 2004 Edition

News analysis and analytical perspectives from India and the sub-continent

Human Development and Infrastructure in the Indian Subcontinent

Views about the progress of India and other nations in the subcontinent range from the pollyannaish "India Shining" to the messianically-distorted view of India's Maoists who continue to see India as a "semi-feudal semi-colonial" nation. The truth is naturally far more complex. For one thing, statistical indicators often mask important underlying variations. And besides, they don't always shed sufficient light on the causality behind the numbers.

While many Indians are justifiably perturbed by the less than satisfactory level of India's social indicators, they are far less likely to be aware of some of the factors contributing to India's nagging poverty. Nor are they as aware of the march of history as they should be because often history can shed valuable light on the experiences of a nation.

For instance, a look at the following table points to certain obvious and less obvious conclusions:

First, one might note a clear and decisive indictment of the two-nation theory. Without exception, India's indicators exceed those of Pakistan and Bangladesh. For all its limitations, India's broadly secular trajectory has led to greater socio-economic progress. The adoption of the divisive and sectarian two-nation theory was not in the general interest of the Muslim masses. If anything, it helped extend the power and influence of the most parasitic forces in society, thus obstructing overall progress.

Secondly, the table appears to reinforce the commonly held notion that social indicators tend to co-relate with rising per capita incomes. By and large, human development indicators such as poverty rates, life expectancy, literacy rates and infant mortality seem to improve with a rise in per capita incomes (although the reverse might be equally true). From the following table (that includes virtually all the major developing nations) there appears to be a fairly consistent relationship between higher per capita income and higher life expectancy and higher literacy. Conversely, poverty rates and infant mortality rates appear to be inversely related to per capita incomes.

However, there are some notable exceptions. Even though South Africa and Brazil are relatively well industrialized countries, poverty rates are relatively high for their respective income levels - in large part due to high levels of racial inequity.

In South Africa, poverty rates are comparable to Kenya - a nation with only a tenth the per capita income. Clearly, decades of apartheid have left a terrible social divide that will not be easy to bridge. In Brazil, poverty rates are identical to those of Sri Lanka - a nation with only half the per capita income. Thus, distribution (or sharing) of the GDP can also matter considerably.

Another anomaly is Egypt whose social indicators are somewhat lower than expected in terms of literacy and population growth rates - perhaps due to cultural factors (such as negative clerical influences, the suppression of women, and a political regime that is dictatorial and generally beholden to the US).

The impact of AIDS can also be seen in the data - in that countries with a high incidence of AIDS are seeing a dramatic decline in life expectancies.

There are also some positive exceptions. Thailand and Sri Lanka's progress in raising literacy and reducing infant mortality somewhat exceed the norms for their respective per capita incomes. However, Thailand and Sri Lanka's progress appears less impressive when compared to their literacy rates in 1947.

Considering their situation in 1947, it is Indonesia and Kenya's progress on the literacy front that is more impressive. Kenya's literacy rate surpasses that of India and Egypt even though its per capita income is almost one-fourth of Egypt's and a third of India's. Nigeria does much better than both Pakistan and Bangladesh in spite of a per capita income that is only half. (It should also be noted that primary school enrolment in Thailand has now fallen to 90% from almost 98% two decades ago - almost comparable to India's 86% present enrolment).

Notes: Data is primarily from 2004 CIA World Fact Book. Some Indian Data is taken directly from Indian Census 2001. Some Egyptian Data is from Egyptian Govt. Agencies as reported by Egyptian Weekly Al-Ahram. CIA estimates can be 5-10% off from local Govt. estimates. For instance, CIA under-reports literacy in Egypt and India, although its estimates for Pakistan's literacy are in accordance with Pakistani Govt. estimates. On the other hand, CIA estimates for life expectancy in Egypt show a somewhat unusual rise from earlier Egyptian govt. estimates.

Although the Nehru faction in the Indian government was no less committed to social progress than Indonesia's Sukarno government (when there were truly remarkable gains in mass literacy), the nation as a whole was weighed down by elements whose commitment to social progress was only partial (or non-existent). The Swatantra Party, the Jan Sangh, and even some influential elements in the Congress did everything in their power to preserve the privileges of the old nobility, the casteist landlords and money-lenders. Clerical elements also had powerful lobbies within the major political parties. The Islamic and Christian clergy held considerable sway over the Congress, whereas Hindu clerical elements had a strong influence on the Jan Sangh.

The Sardar Patel deal with the Princely States had involved significant concessions to the parasitic feudal elite that had mostly sided with the British during colonial rule. The Privy Purses were an unnecessary drain on the national budget, and it was in all likelihood the pressure of the Naxal movement that emboldened (or compelled) Indira Gandhi to abolish the royal privileges and take concrete steps to end the last vestiges of the old Zamindari system.

Thus even though state planning led to a dramatic growth in the scientific and industrial development of the country, social development tended to lag due to political weaknesses. The benefits of science and technology could therefore, not be adequately harnessed.

However, in defense of India, one might make note of certain adverse geographic factors that may have also had an impact in aggravating India's poverty. India was an energy-deficit nation as compared to Indonesia (an oil exporter) and China (which until recently was self-sufficient in its energy needs). Moreover, Indian agriculture required much greater investment in terms of irrigation management as compared to Indonesia (owing to differences in precipitation patterns.)

Unlike India, Indonesia did not have to face serious grain shortages until very recently; neither did it have to expend as much effort on developing local energy resources or managing a serious external trade deficit.

On the other hand, India's early inability to educate its masses to the extent of Kenya (a nation that also suffered from colonial rule) undoubtedly had something to do with Indian society being much more stratified and more weighed down by backward-looking reactionary clerical elements. The conservatism of the traditional feudal nobility was also a serious obstacle to progress.

But apart from these factors, one of the most important and most significant aspect in determining a nation's progress has been the colonial element. Not only did colonial rule devastate the colonies, in many instances it also contributed to the creation of new elites (who along with the old elites) constantly obstructed progress. It is surely no coincidence that the most advanced nations in Asia - namely Japan and South Korea fended off European colonial rule. On the other hand, some of the poorest nations on this list - Nigeria, Kenya, Bangladesh, Pakistan, India and Indonesia - were all colonies - of Britain or Holland.

Thailand which escaped direct colonial rule does much better. So does China which was a semi-colony, but not a full colony, and was thus spared the worst excesses of direct colonial rule.

Although both South Korea and China suffered a few decades of Japanese occupation, it must be noted that Japanese occupation did not result in the kind of economic strangulation and social devastation that occurred in India. In fact, the periods of Japanese occupation in Korea and Taiwan led to considerable expansion of heavy industry and significantly greater investment in education facilities than occurred under British rule - particularly in Korea (as is evident from the table.)

It may also be noted that China's rapid growth rates in the last two decades have in part been account of much higher levels of investment from its more developed neighbors - i.e. Japan, S. Korea and Taiwan. Cultural and geographic proximity to relatively more developed nations has been to China's advantage, and to the disadvantage of nations in Africa or the subcontinent.

India's industrial growth has been relatively modest when compared with China's in the last two decades. This is in part due to Western blackmail that came about in 1990 - when following the collapse of the Soviet Union, and the imposition of an oil embargo on Iraq, India faced a large and unmanageable trade deficit, and was forced to accept the deleterious regimen of the IMF.

However, faulty government policies, economic mismanagement and rampant corruption have also aggravated the problem.

Unfortunately for India, the debate on public policy has been hijacked by ideological zealots who neither fully understand Indian (or world history), nor do they appreciate the dynamics of social progress, nor are they able to distinguish between enlightened state intervention, and pandering to narrow sectarian interests.

For instance, it may be worth noting that Japan - who embarked on a top-down, state-initiated modernization of its economy in 1869 (during the Meiji period) enjoyed some of the highest growth rates in the world in the half-century from 1870 to 1920. This was also true in the post-war period. And much of this growth took place in a highly protectionist economic environment with the state playing an especially activist role in mass and higher education, scientific and technological modernization, and infrastructure development. South Korea and Taiwan (in large part) imitated Japan's state-interventionist model. Although state-intervention has reduced considerably in China, even today, local and state governments retain considerably more ability to manage and expand the industrial infrastructure. (In fact, it could well be argued that China's cities with their dazzling facades are but a by-product of state intervention. Without state-intervention, China's downtown business centers and transportation systems could not have been as rapidly renovated.)

Conversely, countries such as Nigeria, Kenya, Bangladesh and Pakistan have who have been governed by weak states have been unable to add to their scientific, technological or industrial infrastructure in any significant way, and remain considerably poorer than India. Nigeria's example is especially tragic in that in spite of being one of Africa's largest oil exporters, it must import oil for domestic use because it lacks the refining capacity to refine the oil that is pumped from its very own soil.

Those who decry any and every form of state intervention in India are failing to learn from history (or the current world situation) in this respect. Like Japan and South Korea - India is a relatively resource poor nation. The only way it can develop is to develop its human resources and public infrastructure to the maximum possible extent that is compatible with the Indian geographic environment.

Although it can be debated as to whether Japan, Korea and China have followed policies that are sustainable or reproducible in other nations, it would nevertheless be foolish to ignore how enlightened state intervention can at least help in raising the level of scientific and technological awareness in society.

Instead, on the one hand, we have a whole school of self-styled "experts" who believe in wholesale privatization and complete anarchy of the "market", without any regard for how that may impact human development, living conditions, or social harmony. (It is of course no coincidence that these so-called "experts" belong to parties that have been historically aligned with India's pro-colonial semi-feudal elites.)

On the other hand, we have proponents of state intervention who use state intervention to preserve the interests of certain influential private property holders at the expense of the general working public.

We have state interventionists who will protect the interests of small traders who add no value and engage in unfair trade practices. We have state interventionists who will protect the interests of unviable small businessmen who use outdated and inefficient technologies, violate environmental laws with impunity, and mistreat their unorganized workers.

We have state interventionists who will provide free power to farmers without requiring that they invest in water-harvesting structures, or plant trees to prevent soil erosion, or learn about better cropping practices. These state interventionists will not provide subsidies for solar water pumps or drip-irrigation water-saving schemes. They will not invest in developing cooperatives and state farms so that Indian agriculture could become sustainable and viable without constant subsidies. They will not provide the support to our agro-research institutions so that their latest research could have a wider reach. They will not inform farmers about how to utilize fertilizers and pesticides more efficiently by complementing the use chemical inputs with bio inputs. They will not encourage recycling or intelligent energy-management schemes They will take half-hearted steps in encouraging village industries and rural modernization.

Thus we have it: little or no intervention when it could make a real difference. But constant intervention in ways that preserves parasitic and petty property interests that are not only inconsistent with Indian geography and history, but have been seen to be unviable throughout the world.

As can be seen in the following table, every nation more developed than India has a significantly lower contribution from agriculture to their GDP. What India needs to do to modernize is not to artificially preserve the hopeless anarchy of the small or even medium agro-producer, but to instead improve the lot of the working population so that the small farmer loses his fear of joining the working masses. What India needs is much better housing and greater social security for the working poor so that as small farmers abandon their land, which they must, they find an improved life in the city.

This would require much more thoughtful polices in terms of urbanization. Reckless and unplanned urbanization that leads to constant shortages of essential resources or the proliferation of slums is obviously not the answer to the collapse of the small farm. But neither is the answer to artificially preserve the small farmer at the expense of the urban masses, and in a manner that will only slow down the development of other sectors of the economy.

Notes: *Although India's per capita road length doesn't seem too bad when compared with other developing nations, the quality of roads in Madhya Pradesh, Bihar and Northern Bengal (and less developed districts in other states) leaves much to be desired. At least 20 to 30% of India's "paved roads" are only marginally better than unpaved roads.

**On the other hand, even as the length of India's railways is not dramatically higher than Pakistan, or other developing nations, Indian Railways does run many more trains per day than most countries in Africa or Latin America. For instance, frequency of rail services (and passengers carried) is orders of magnitude higher in India as compared to Pakistan due to a fairly expansive network of long-distance trains. However, the frequency of short and medium distance inter-city trains in India is not as impressive when compared with what is typical in Europe or Japan.

However, in spite of its many weaknesses, the Nehru era laid the foundation for India's progress today. India has been able to progress with a relatively low external debt. If India's scientists and engineers are being hired by the world's most technologically advanced companies, it is only because the Nehru faction of the Congress correctly understood that market forces by themselves would not permit India to bridge the enormous chasm that had developed between India and the modern world.

It may be worth reminding young Indian readers about the poverty and misery India had inherited on the eve of independence. Contrary to the uninformed notion that Britain helped to industrialize and modernize India, it should be pointed out that the percentage of population dependant on agriculture and pastoral pursuits actually rose to 73% in 1921 from 61% in 1891.

British spending on India's infrastructure was abysmal. "The single city of Manchester, in the supply of its inhabitants with the single article of water, has spent a larger sum of money than the East India Company has spent in the fourteen years from 1834 to 1848 in public works of every kind throughout the whole of its vast dominions" - thus spoke a concerned British member of parliament in 1858. Needless to say, the situation improved little in the next century. In "Late Victorian Holocausts" Mike Davis reports that Indian life expectancy actually fell by 20% between 1872 and 1921. In 1931, it fell further from 25 to 23. Infant mortality in Bombay was 255 per thousand in 1928. Literacy in 1931 was only 8%, and only 4 in 10,000 were enrolled in a university.

In the last half of 19th century, India's income fell by 50%. In the 190 years prior to independence, the Indian economy was literally stagnant - it experienced zero growth. (Mike Davis: Late Victorian Holocausts)

Given this situation, it was inevitable that only an enlightened state could attempt to remove these enormous deprivations. In a country whose entire savings had been stolen, there was very little scope for the expansion of private capital. Only the state could take the high risks and mobilize the enormous resources necessary to build new power plants, or steel plants, or set up a viable capital goods industry. Only the state was able to take the lead in founding institutions of basic research and higher learning. Only the state could reverse the two centuries of neglect and ruination of Indian agriculture.

While it can be argued that the Indian state could have done a much better job of building and running the state sector, that too often, the state sector was abused by corrupt officials and monopoly (and other) business and commercial interests. That too many bureaucrats were intellectually complacent, scientifically uninformed, and lazy (and nepotistic) managers. But to turn around and glorify the market mechanism when one after the other, private businesses were failing, and heading to the bankruptcy courts (as was the case in the mid 60s and 70s when private airlines, private banks and private insurance companies were collapsing) is to engage in the worst sort of ideological hyperbole.

If state planning during the Nehru years did not have as powerful an impact as it could have, the fault lies with those of India's political factions (such as the Swatantra Party, the Jan Sangh, and some within the Congress) who did everything in their power to stall or undermine India's progress by constantly trying to protect corrupt and backward elements. Conservative and reactionary elements in India's unreformed civil services were tolerated, even promoted by hypocritical politicians. But the solution to this problem lay in serious political and administrative reforms, not in abandonment of an essentially correct policy.

The wave of nationalizations that were carried out in the Indira Gandhi years were a matter of necessity. But what was once a necessity has now become a distorted policy that has been abused to the point that every victim of market forces wants a bail-out. No one wants to take the responsibility for the cold anarchy of the market. But as soon as things go wrong, there is the usual clamor for a subsidy or a bailout.

However, in the past, when the government intervened, there was at least an attempt to run the nationalized business in a manner that was amenable to the broad public interest. Today, those who want the government to intervene, want to nevertheless preserve their property rights and the right to future profits. They want all the benefits of the market, but none of the risks and responsibilities that must go with the potential for profit. Every one wants to dream of the windfall, but no one wants to put aside anything for a rainy day.

Votaries of the market cannot have it both ways - the freedom to do what they wish with their money and property, and yet call upon the same government (that they believe has no role to play in education or cultural well-being or public infrastructure) to then bail them out.

If farmers cannot pay their loans, then the way to rescue them ought to be that the government should step in and set up a cooperative or collective farm, hire a competent agricultural scientist/engineer to manage the unit effectively, and provide the bankrupt farmer with a job in the new agro-enterprise.

Why farmers (especially rich farmers) should expect not to pay any taxes, and get free or subsidized inputs, and yet retain full individual property rights is simply unfathomable - when the working (and landless) poor cannot even be guaranteed a roof over their heads or adequate daily nutrition. It is high time that the working people of India abandon the ideological charlatans that pretend to lead them. Government policies should be geared towards those that make a positive contribution to the economy - not toward those who simply wish to profit from their inherited wealth or property.

Too many people have confused petty sectarian populism with serious and imaginative state intervention. They are also unable to distinguish problems that arise from political failings (as opposed to policy failings).

For India (and the rest of the poor nations of the world) to progress, there must be state intervention, but it must be very enlightened and visionary state intervention - state intervention that is geared towards taking the entire nation on a higher path, not the type that favors this or that special interest.

Related Articles:

Problems of Indian Agriculture

Higher Education in India

Privatization as Policy

Human Welfare, Economic Development and Civilized Society

Liberalization, Infrastructure and Quality of Life

Economic Growth and Social Well-Being

Colonization, "Westernization" and Social Culture

Back for other selections from South Asian Voice for other articles on issues confronting India and the region.

Also see South Asian History or Topics in Indian History for relevant essays that shed some light on the history of the subcontinent.

See for instance The Colonial Legacy and Loyalist Agents in the Indian Aristocracy and the Early Congress

(If you liked our site, or would like to help with the South Asian Voice project and help us expand our reach, please click here)