Soft infrastructure and a tablet for all can catalyze India’s development


At independence India was a large, poor, illiterate country with disparate religions, languages, races, food and culture, rallying against imperial rule, not much else. He was not expected to survive, let alone succeed. But the 15 years since independence created India’s foundations that have stood the test of time.

A democracy based on the right to vote for adults was institutionalized, a constitution approved, a federal structure created, and an independent judiciary and media were protected.

The state remedied the lack of basic economic infrastructure by creating a capital industry and nationalizing the main pillars of the financial sector, the State Bank of India and the Life Insurance Corporation. He created institutions of higher education, controversially retained the merit-based bureaucracy, subordinated the military to the civil state, and despite his poverty, managed to make his voice heard on the world stage and created the concept of non-alignment. Any fair evaluation of this period will mark it well.

India’s political economy subsumed everything else between 1960-1991. It was time for India to reckon with “full adult frankness” in a poor democracy. At the start of the period, banks were nationalized and forced to open deposit-taking branches in rural and semi-urban areas, with the deposits being used to purchase government securities to finance planned spending. Credit was directed to identified priority sectors, and the industry was granted credit through the credit authorization system.

Government control of the economy was stifling, more sectors were nationalized, and the private sector was hampered by price controls, but supported by high tariffs and barriers to entry at a time called for. rightly the license.raj. Unsurprisingly, the quality of Indian products was poor, we were enjoying the freezing “Hindu growth rate” with massive disguised unemployment, and exports were not sufficient to meet our imports, ultimately resulting in a major balance of payments problem. 1990.

In 1991, India was on the verge of default and the government of the day quickly employed policies inspired by the structural adjustment plan of the International Monetary Fund (IMF), to obtain a Special Drawing Right facility of five billion dollars.

Steps have been taken to unblock the economy. Interest rates have been deregulated, tariff rates reduced and the exchange rate set closer to the market rate. Licenses have been relaxed and barriers to entry have been reduced. The economic unlocking has altered India’s economic growth trajectory, which has averaged 7% for more than 25 years.

Since then, successive governments of different persuasions have pursued economic reforms. Even those with a welfarist orientation (who introduced or continued with the Mahatma Gandhi National Rural Employment Guarantee Scheme and a series of grants) have prevented slippages.

In fact, over the past 30 years, governments have introduced reforms in the areas of direct taxation, telecommunications, labor, banking and capital markets; expanded infrastructure (roads, airports and ports); increased foreign ownership limits in controlled sectors; attempt to privatize state-owned Aadhaar, conceptualized and deployed.

Currently, some notable measures include the tax on goods and services, the insolvency and bankruptcy code, agricultural reforms (which admittedly have met with resistance but are nevertheless overdue) and the consolidation and hygiene.

Yet for me the biggest enabling reform going forward has to be the JAM trinity – opening bank accounts for all Indian households, registering 1.2 billion Indians in Aadhaar, and giving almost all Indians a cell phone. .

To prepare India for the future and provide equal opportunities for its citizens, India needs to fully embrace the technology in the next phase. My five main areas of reform are:

First, tackle digital apartheid. The government must guarantee a “smart device for life” to all Indians, with adequate bandwidth and data. The equivalent of a mini iPad as a passport for equal opportunities with connectivity, giving access to education, health, training, development and financial inclusion. This is the first requirement for atmanirbharta (autonomy).

Second, ensure equal access to education. The virtual school during the pandemic demonstrated the possibility of a much fairer future for our children. The use of digital in education via the smart mini device should be the weapon and all public schools should be taught by the same teachers (per language), and their current teachers should become classroom monitors to ensure the attendance and good behavior.

Third, revolutionize health care. The same device should allow access to health centers. All health records in India should be digitized and centrally stored. We can resolve privacy concerns and recreate our healthcare delivery in India from ‘absent’ to ‘personalized’.

Four, use the water wisely. Environmental management is a complex subject and India is both victim and culprit. Yet the wrong (or free) pricing of electricity and water has led to perversions in agriculture and lowered the water table to unforgivable levels. Exporting energy-intensive rice and sugar is like exporting food during a famine.

And finally, speed up justice. Basically, it means our courts need to work faster and prisons need to house criminals, not people awaiting trial. It is unfair that 60% of prison inmates are awaiting trial.

In the next phase of our journey, the defining objective must be soft infrastructure. We must provide equal opportunities for citizens with basic access to quality nutrition, sanitation, health and education. It will improve our economic productivity. In the unfolding digital age, without access to the benefits of technology for all citizens, our productivity will lag behind global benchmarks. Inequality will be a social threat to our democracy based on universal suffrage.

Digital access must be the weapon to rethink our future. We now have the tools and the poor of India are eagerly awaiting.

Janmejaya Sinha is President, BCG-India

Opinions expressed are personal

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