In a country that has been stung by experiments with race-to-the-bottom socialism for decades, advocating a greater presence for the state can be a lonely cause. Yet, in my view, perhaps in a country like India that is making the transition from socialist poverty to capitalist nouveau riche prosperity (for a few), the role of the state becomes ever more important. Not least because the state then becomes the only benefactor of those disenfranchised by the process of development (which, even in the most benign, inclusive of models can often be skewed). Ironically, then, socialist welfare policies must be perpetuated, even expanded, not culled in the name of 'less government is good government'.
First, the rise in individual wealth in a nation also often comes with a concomitant bulge in state coffers. Even with a 5% fiscal deficit, the Indian government today is far richer in both absolute and relative terms than it was as in its socialist heyday. This gives the government a far greater ability (and responsibility) to spend more and to spend on more causes. Agreed that this model has gone horribly wrong in Europe and America - but that is only the other extreme. The 'reform-minded' economists and right-leaning policy hawks will cry foul and say that the profligate Indian state already spends far too much. Wrong. The Indian state wastes too much. Subsidies are large, not because they are unnecessary, but because they are targeted ineffectively. The poor still need cheap kerosene and rice. It is electoral calculations that hold the government back from targeted subsidies. It is often said that a 'benefit' once doled out in India, can never be revoked - be that a subsidy, a reservation or an entitlement. However, it is easier to refine a benefit by targeting it correctly than to rescind it completely.
The vastness and sheer socio-cultural diversity of India necessitates a state that reaches out to parts of the country and to people that corporations would never find economical to serve. There is either no money to be made in these transactions, or the wait for returns can be longer than a for-profit entity can be answerable to shareholders for. In all such cases and more, the state must step in and provide. It has a moral duty and responsibility to, irrespective of the economic policies that it espouses. In the farthest corners of the Himalaya mountains in Kashmir, the remotest villages of the North-Eastern states and in the densest jungles of central India, the state must extend its arms and reach out - build schools, roads, provide medicines for free and transport services for cheap. Because someone has to, and no one else will. What every newspaper in the country will tell you is the story of mainstream India. Either the India that is in the thick of the action on growth, or the India that is poor but has a political voice to matter enough. There are hundreds of untold stories from another India that a welfare state does reach out to, but one that is never heard by the rest of its fellow-countrymen for the simple reason that it does not pay anyone to hear it. This is where the state must step in and hand-hold the development process to mainstream entire populations. Even if there is no economic or electoral reward to be reaped.
First, the rise in individual wealth in a nation also often comes with a concomitant bulge in state coffers. Even with a 5% fiscal deficit, the Indian government today is far richer in both absolute and relative terms than it was as in its socialist heyday. This gives the government a far greater ability (and responsibility) to spend more and to spend on more causes. Agreed that this model has gone horribly wrong in Europe and America - but that is only the other extreme. The 'reform-minded' economists and right-leaning policy hawks will cry foul and say that the profligate Indian state already spends far too much. Wrong. The Indian state wastes too much. Subsidies are large, not because they are unnecessary, but because they are targeted ineffectively. The poor still need cheap kerosene and rice. It is electoral calculations that hold the government back from targeted subsidies. It is often said that a 'benefit' once doled out in India, can never be revoked - be that a subsidy, a reservation or an entitlement. However, it is easier to refine a benefit by targeting it correctly than to rescind it completely.
The vastness and sheer socio-cultural diversity of India necessitates a state that reaches out to parts of the country and to people that corporations would never find economical to serve. There is either no money to be made in these transactions, or the wait for returns can be longer than a for-profit entity can be answerable to shareholders for. In all such cases and more, the state must step in and provide. It has a moral duty and responsibility to, irrespective of the economic policies that it espouses. In the farthest corners of the Himalaya mountains in Kashmir, the remotest villages of the North-Eastern states and in the densest jungles of central India, the state must extend its arms and reach out - build schools, roads, provide medicines for free and transport services for cheap. Because someone has to, and no one else will. What every newspaper in the country will tell you is the story of mainstream India. Either the India that is in the thick of the action on growth, or the India that is poor but has a political voice to matter enough. There are hundreds of untold stories from another India that a welfare state does reach out to, but one that is never heard by the rest of its fellow-countrymen for the simple reason that it does not pay anyone to hear it. This is where the state must step in and hand-hold the development process to mainstream entire populations. Even if there is no economic or electoral reward to be reaped.
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