I was still in civil services when economic reforms were introduced in 1991. A more dramatic event around that time [1992] was the demolition of Babri Masjid. In retrospect, one realises how important 1991 was and how much it would transform the destiny and course of this nation.
The idea of a good state, when I joined IAS in 1980 and right up to the mid-1990s, was that it stood on the side of the poor, a state which was for the marginalised people. That was the yardstick. But 1991 was acknowledged as a deviation from that goal.

In popular imagination, a state is an institution which works best for the big businesses. It is not for all businesses, say for street vendors. The poor has been forgotten more and more in that re-imagination; the demolition of the Permit Raj has not happened for street vendors.

As the initial imagination turned completely on its head, the culture of the government changed too. For instance, in my time no official would be seen spending time with businesses. If an official socialised with the rich and the powerful, the official was considered someone who lacked integrity. Today you can claim to be doing it in the name of nation-building and advancing the economy.

The expectation that the demolition of Licence Raj would also lead to greater transparency in government operations has been completely belied. The size of scams has increased manifold. In the 1980s, the Bofors scam was to the tune of Rs 64 crore. Today the amount in a corruption case runs in several thousands of crore.

On the ground I see a genuine confusion among conscientious officials, for example district magistrates, when they are confronted with a battle between poor communities and big businesses – on whose side they should stand. Earlier, there was no doubt that an official’s duty was to defend a tribal community from expropriation, land dispossession. They had to protect the forest at all costs. At least as civil servants, you were clear whose side you were standing. Today when I go to areas with coal reserves and other mineral reserves, the genuinely conscientious and self-motivated young officials don’t know whether they should be implementing the Land Acquisition Act or the Forest Environment Act in letter and spirit. They are indecisive whether to be facilitators of businesses or protectors of the poor.

I think economic reforms have done many things but one of them is that they have entirely transformed the culture, the functioning, and the moral yardsticks of a good government, in ways that could not have been imagined in 1991.

It is needless to say that economic reforms have improved people’s lives; to what extent it has done so for the marginalised communities is a separate argument. But the pace of percolation of the wealth created has been low.

The primary expectation was that growth would mean jobs for millions which in turn would bring enough money in people’s hands to buy all things from the market to meet their needs including those related to health and education.

The usual argument given by proponents of the percolation theory is that the private sector should provide for healthcare and education as the government is not efficient. That’s what is happening.

But what India is trying to do – have this pace of economic growth without a foundation of universal healthcare and education – is something no country in the world has done in history. Look at South Korea or China. Both of them have had universal healthcare and education foundation. They built a business-led growth model on top of these universalised services. Now when you compare the cost of inequality, you can argue that India and China have similar levels of inequality today. One may contest how one measures it, but the point is that even those in China who are at the bottom of the economic strata do have state public healthcare and a good public education system.

Even market fundamentalists in other countries are recognising that they were wrong about the idea that healthcare and education should be bought from the market and these are my two most fundamental concerns, among other things.

Even in hospitals and schools where a few beds and seats, respectively, are reserved for people from the lower income group, we know how disrespectfully they are treated. That’s why we need social protection for all.

Another concern I have is that this growth is producing fewer and fewer jobs. Half of the country’s population is in agriculture, the growth of which has gone down to zero. If their economic conditions are not improving then where is the wealth that you [government] are talking about?
When you ask neo-liberals when poverty will end, they say “by 2040”, which means that you are telling a poor person today that there is no way you can promise that their life would change until then. What we will eliminate by the year 2040 is not really poverty; it is only desperate poverty that may get eliminated.

But if we equitably distribute the wealth and if the state takes greater responsibility to guarantee a basic minimum social protection, then the consequences would be very different.

India has the third largest population of billionaires. At the same time, every third child malnourished in the world is also an Indian and we are comfortable with that anachronism. I strongly feel that there is a different imagination of growth, which is bubble growth rather than trickle-down.
Look at a modest programme like MNREGA. Where ever it has been implemented, it has put money in people’s pocket. They are able to save more money, and spend in market. If we create a model which is far more equitable then it will not only be just, but the growth will also be sustainable.
There are evidences that show an improvement in people’s life conditions but it has been much slower, especially for the tribal and Muslim communities. This again reflects the fact that it is not just income inequality but also other social burdens that they carry.

What worries me is our collective indifference to inequality. The middle-class feels that this inequality is not only tolerable but justified and legitimate. So the sense of moral outrage against suffering and injustice around us has sharply declined and that is what worries me even more than the material aspects of inequality.




As told to Pratap Vikram Singh


(The column appears in the August 16-31, 2016 issue of Governance Now and is in continuation of our special edition on the 25 years of economic reforms)