The notion of a V-shape economic recovery is an exaggeration, and the informal economy and the poor have been terribly hurt during the Covid-19 period, says Gurcharan Das, author, commentator and public intellectual.

“A V-shape recovery is an exaggeration. The informal economy and the very poor have been terribly hurt in the process (the pandemic period). They will take longer to recover.”

Das was speaking with Kailashnath Adhikari, MD, Governance Now, during a live webcast as part of the Visionary Talk series held by the public policy and governance analysis platform.   

He, however, said that despite the Covid-19 challenge, recovery is happening and once the growth starts happening, all boats will be eventually lifted. In UPA 1, he said, Rahul Gandhi would feel ashamed of jobless growth. But when the figures came out they showed actually wages had gone up during the high growth period between 2003 and 2011 or so for all types of people – urban, rural, formal, informal, unionized or non-unionized.

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“If you have jobless growth, wages don’t go up. These slogans are not fair because then people lose confidence in growth and market. Instead, we need to sell reforms to the people,” he said adding, “I don’t believe in the rhetoric of jobless growth. You can have labour intensive growth.”

Das said during his discussions with PM, Narendra Modi, he said why his government should do reforms stealthily at night. People, he said, believe that reforms make the rich richer and the poor poorer.

“Blame goes right back to the time when reforms took place during the Narasimha Rao government and all the fine people at that time – Manmohan Singh, Montek Singh Ahluwalia who should have been selling reforms, every night telling people about reforms, their meaning that competition lowers costs and prices and improves quality of products …. and people don’t even know the difference between ‘pro-market’ and ‘pro-business’. In fact Licence Raj was pro- business as people cornered licences those days. No businessman likes competition. But that is what liberal economy is,” he said.

Asked how the government will achieve its target of making India a $5 trillion economy, he said the government needs to focus and emphasise on reforms and growth consistently. India needs to get back its growth and return back to 7% growth momentum witnessed between 2000 to pre-2020. He added that the time target for becoming a $5 trillion economy may not be achieved, but the fundamentals and demographics of India are still right.   

He said that UPA 2 missed the great opportunities it had but this government despite demonetisation and other setbacks has commendably done significant reforms and so far not backtracked on agricultural reforms.

Speaking further on reforms, Das said that they should be executed and should not mere policy announcements. “... they should be intelligently executed and not allowed to get into the hand of bureaucrats. PM Modi has tremendous faith in the bureaucracy but most bureaucrats are not trained and behave like district magistrates. We make them regulators of our enterprises, heads of PSUs with a nice cushy job and then they fail. What training do they have to run an economic enterprise? We have very few successful regulators. It will take a lot of effort for Mr Modi.”

He added that 20% bureaucrats are keeping the country afloat when 80% are the biggest obstacles for reforms.

On being further asked how to ensure that policies are actually implemented, the public intellectual gave the example of Mumbai municipal commissioner Iqbal Singh Chahal who, he said, saved thousands of lives through his inspired leadership during pandemic. He also praised former district collector of Nandurbar, Rajendra Bharud, for setting up in-house oxygen plants in anticipation of the second wave in addition to setting up preemptive infrastructure in the tribal district. “The stories of these heroes hide failures of institutions. You shouldn’t have to have heroes in good nations when institutions should quietly do their jobs,” he said.     

While responding to a question on PM Narendra Modi’s promise of ‘minimum government, maximum governance’ and its importance in the Indian context, he said governance reforms are even more important than economic reforms and inability of the state to deliver to ordinary people what they expect is very discouraging and sad.

India is a story of private success and public failure; private success after 1991 reforms and public failure because we have not done governance reforms, he said. One out of four parliamentarians has criminal record, he said. Turning to the judiciary, he cited the case of a man who is asking why it should take 15 years to settle his case when half his adult life is over. With 4 crore pending cases in the lower judiciary, lakhs of undertrials are languishing in jails when their cases are not even heard and their terms are already over, he said.
 
A bureaucrat who works 14 hours a day and does tremendous work keeping the state afloat gets promoted on the same day as his batchmate who works only two hours a day. “The reality of state capacity is a big problem when we should be continuously working on improving the capacity of the state. Bureaucracy below the district magistrate is very mediocre and callous. Unlike China which is top-down success, India is bottom-up success. It has been a weak state and a strong society, unlike China, which has been a strong state and weak society. The fact is you need both.”