Liberalisation – A True Story

uicy stuff to argue about….
Everywhere you look in life, you can see patterns. Here’s a familiar one:
“Hey Guess What. I heard that there’s <Insert Positive Development> in India”
“Oh yes, but so what. <Insert standard Real India is poor, everybody is dying caste-system yada yada yada yada>”Now This Voice is the top voice., Indian Writing, Arundhati Roy, The Communist Parties of India, Rohinton Mistry, and others belong in the second camp – latest addition is Amit of India Uncut. He writes about The Myth of Indian Liberalisation – Note this has also been published in the Asian Wall Street Journal.

Wha? Myth? Are you trying to tell me my paycheck from the software company I’m working for is fake?

While part of India has benefited from being opened up to foreign products and influences, most of the country is still denied access to free markets and all the advantages they bring.

Ok all those living under the illusion that India has done all the “developing” it needs to – put their hands up please….. nobody? Ummm duh – I think we all know that India has a long way to go in terms of getting better – who is Amit addressing when he states the above obvious-ism?

India opened its markets in 1991 not because there was a political will to open the economy, but because of a balance-of-payments crisis that left it with few options. The liberalization was half-hearted and limited to a few sectors, and nowhere near as broad as it needed to be.

Another obvious-ism. I have never heard any Indian claim that it was through the sheer brilliance and intelligence of the People of India that we started economic reforms. It was the simple fact that Socialism finally came crashing down and left India with little choice. Yes – it was sort of an “accident” – but one that was going to happen sooner or later. You cannot chain 1 billion people, either economically, or politically. Some way, somewhere, the dam will burst. Further, the part about liberalization being half-hearted – another obvious-ism. Isn’t this just more common knowledge?

Next para goes on about the bribes people have to give to set up shop. Again, more common knowledge – but why doesn’t he mention the things you no longer have to pay bribes for. A telephone line – important for economic growth, last time I checked. Bringing many goods into India (I’m talking personal items here, not commercial shipping – which is yet-to-beliberalized).

The vast shantytowns of Bombay–one of them, Dharavi, is the biggest slum in Asia–hold, by some estimates, more than $2 billion of dead capital. For most of the migrants who live in these slums, India hasn�t changed since 1991. As that phrase from India�s pop culture goes, �same difference.�

Proof – I want proof that these people see no change between now and 1991 – it is YOU who see no change. You saw slum in 91, you see slum today. In 1991, maybe these people thought about where they would get their next morsel of food. Today, it might be where they can find a better place to live. That’s a change. For the better. But yes, these people are not out of the woods yet – but they’re getting there.

The socialist left, a natural proponent of such views, believes that free markets are the problem and not the solution. India�s communist parties have blocked labor reform, opposed foreign investment and prevented privatization of public-sector units. They naturally have a vested interest in the �license-permit-quota raj,� as the web of statist controls is called. On all these issues they are supported, surprise surprise, by the religious right.

The Hindu right wing, led by the Bharatiya Janata Party and collectively known as the Sangh Parivar, also fears globalization.

This is incorrect. It is is the extremists – the RSS and VHP which fear globalization (and all things rational and sane, much like the Republican right-wing in USA) – BUT the BJP is all for free-markets and the like – being right-wing means being all for less government. The BJP wanted to privatise, and there was more privatisation under the BJP and MORE economic reform too, than by any of the previous governments post-1991. Note to all – the only ideology of the BJP that I support is their economic one. As a sort of agnostic Arya-Samaji-Punjabi, I don’t subscribe to their views of Hindutva. At all. Yech.

You can read the rest of his article on his blog. I’m unclear as to what the Creative Commons licensing rights are for reprinting his article, so I’ll stop here. But the point is this. I have yet to come across an article written in the any section of the Media which says that India’s liberalisation is whole-hearted, and very complete, and has benefited everybody. So I’m trying to figure out two things:

1) Who is Amit speaking to and
2) How does this make liberalisation a myth?

What one could say is that liberalisation has benefited the Rich, Upper-Middle- and Middle-Class. And saying so doesn’t make it a myth. The Rich and the upper-middle-class will obviously be the first to benefit from a small unshackling of rules. Obviously, they will be the first ones to go out and buy cellphones and snazzy cars. But is that not an improvement? When previously, the elite section of the country was running away to America, and smuggling “Imported” things into the country, it’s now deciding to stay behind and open another bar or restaurant or multiplex, or mall – is that not an improvement? Who pays the taxes in India? The slum dwellers of Dharavi? Apart of from bribes, where else does India pick up its finances from? It is the Middle Class – these are the salaried people of India, the ones who don’t get to hide their money from the Tax-collector, because it’s deducted at source. You have to push the Middle-Class foward FIRST, before tackling the poor. And these people are benefitting. They can afford cars and houses due to the lower interest rates. They can start travelling across country due to the new bunch of low-cost airlines that have sprung up. Telecom is an issue covered a gazillion times already, so I don’t think I need to mention how easy it is to get in touch. Their lives are no longer restricted to Doctor/Engineer/IAS. There are new ways to make money (legally), that did not exist before. In the TV industry, the airline industry, the BPO industry, the Software industry, the Telecom Industry and I’m sure there are others. This IS liberalisation. This IS economic reform. I’m sorry that 800 million out of those 1 billion aren’t dancing on the streets and riding around in their Suzuki Swifts, but they will get there (well most of them), just not as fast as you would like.

This does not make India’s liberalisation a myth. It just makes it slower-than-China.
Sort of. I think Amit’s intent is to say – “can we cut down on the hype and come back down to reality? We have a long way to go”. And I say NO. Let’s NOT cut down on the hype. For once in a very f-ing long time, there are some genuinely positive things to say about India. Yes people are being murdered for their caste in villages, but at the same time, they’re rubbing shoulders and eating in the same canteen in software companies. There was caste discrimination 10,20,30,40,100 years ago too. But there were no software companies (or malls, or cellphones, or TV channels, or radio stations, or low-cost airlines, or New Delhi Metros, or Mumbai-Pune expressways). That’s a change. For the better. These small changes should be treasured – AND TRUMPETED. Very soon, India’s demographic pattern is going to shift towards youth – I think it already has. There will be more people in the 18-24 year old bracket than in any other. If this is going to be the dominant group in the country – how should you inspire them? By telling them their country is hell? They’re going to need role models. Who should their role models be? People telling them that nothing is ever going to change? Or people acknowledging that some stuff has changed for the better, now go out there and finish the job. That would require the role models – and the youth to be less cynical – this hard to do, because I think Cynicism is now ingrained in India’s genes (and jeans?).But some of us are trying….

Oh, and I have one bit of proof that Liberalisation is not a myth.
I want the next person who reads this article to go and download the latest version of Adobe Reader (version 7.0).
Start it up, click on “Help”.
Then click on “About Adobe Reader 7.0″.
When the splash screen comes up, click on credits.
Now sit back, and count the names which look Indian to you. Most of those names belong to people who work in NOIDA, UP, India. Hell, Siddharth Jain used to work in my team before he joined Adobe!
Now answer this question honestly – would this have been possible before the Mythical Liberalisation?


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