As we have chronicled in the past 12 posts, India has a large number of significant and imposing challenges ahead of it — challenges it has to face, and conquer, to rise to the glory it aspires to. Moreover, the identified challenges of:

• Infrastructure
• Energy
• China
• Taxation
• Poverty (as ¹/_8^th of its urban population lives in slums [PressTV])
• Education & Opportunity
• Health Care
• Sanitation
• Behavioural & Social Norms and Castes
• Accountability & Corruption
• The Media
• Politics & Democratic Complacency

are just the biggest challenges that SI has identified as being the most important to solve; they are by no means the only challenges that lie ahead of India. Pick a topic. Any topic, somewhere, somehow, India is facing a challenge. Maybe it’s just minor and restricted to a small percentage of the population or a few states, but it’s there. And until the major challenges are addressed and reasonably solved, progress is going to be slow and India is not going to surpass the US to become the number two producer of GDP as some economists and futurists are predicting. In fact, if it doesn’t make progress on a number of these challenges, India, which was ranked 10^th in GDP production at the end of 2012 (Source Wikipedia), is not even likely to surpass Japan, which currently holds the number 3 slot according to the UN (United Nations), IMF (International Monetary Fund), and WB (World Bank). (However, it is quite likely to pass Italy, Russia, Brazil, the UK, France, and, a few years after France, Germany to take the number 4 slot even if it doesn’t make much progress on the challenges, simply by virtue of the growth that its middle and upper classes, which constitute about 30% of its 1.2 Billion people, can produce on their own.)

But it’s not all doom and gloom! As SI will discuss in a future series, it has as many opportunities as it has challenges and if it conquers its challenges, it will have opportunities that are only equalled by the opportunities before China (and, with China, control approximately 1/3^rd of the global economy in the latter half of this century)! What future lies in wait? That’s up to India to decide, but a future blog series will discuss aspects of one possible future. Stay tuned.

A democracy on its own is not the solution to any of the aforementioned problems. China had many of these problems and solved most of them as a single-party socialist state and Russia as a Federal semi-presidential constitutional republic. Even monarchies, under a benevolent ruler, can solve most of the aforementioned problems. Egypt flourished for centuries as an absolute monarchy, and recent evidence suggests that many of its citizens were much better off than Hollywood would lead us to believe (and that the pyramids were not built by slaves but by farmers who were employed as workers during the off-season).

Like every form of government, democracy has advantages and disadvantages — with a major disadvantage being that a majority of the representatives have to agree before a law can be made or an action can be taken. And when you have a country with six recognized national parties and forty-seven recognized state parties (and approximately twenty more unrecognized state parties), this can be an enormous challenge. After all, the United States couldn’t even keep its government running last fall and it is effectively a two-party system!

Then there is the apparent unwillingness to challenge the status quo, focus on controversial or taboo issues that a country as progressive, modern, and rich as India shouldn’t still be dealing with (such as dalit, a lack of access to modern sanitation for the 55% of households that still practice open defecation, extreme poverty for the 33% of the population below the official poverty line and the 36% of the population that are not much better off, wide-spread under-nourishment and low life expectancies, and so on), or even take on industry (as noted by Dreze and Sen in An Uncertain Glory when they noted that the Finance Minister of India backed off from his proposal to introduce a small excise duty on gold and precious metals used for jewelry when jewellers and other influential people whose interests were effected responded with massive protests). If India wants to become a real first-world country, then it has to be willing to tackle the tough issues, make the tough decisions, and move forward. Populism does not progress make.

Not only does India have the challenge of having to deal with six recognized national parties and forty-seven recognized state parties (and approximately twenty more unrecognized state parties) across thirty-five states and territories, but it also has to deal with the fact that its constitution promotes local control. In some respects, the federal government faces the same challenges as the EU when it tries to standardize trade laws, for example, as India’s constitution (which is the longest constitution in the world at over 117,000 words) allows complete local autonomy in key arenas, with “schedules” (or lists) for the central government, states, and both to share.

And, as noted in William Antholis’ book on “Inside Out India and China”, India’s centralization effort led to the creation of a dark-side in the central government’s efforts to appease the different states and territories that threatened secession in the early days of the union. In particular, the end result was an elaborate system of license requirements and regulations, as well as carefully crafted spoils and quotas to placate different communities. This “License Raj” has helped to stifle the economy and led to massive local mismanagement and corruption at all levels — mismanagement and corruption that has to be addressed for India to prosper.

Again, a democracy on its own is not the solution to any of the aforementioned problems. There needs to be a willingness to accept the problem, address the problem, and work together towards a solution for the common good, regardless of the consequences, for any progress to be made. Until India politicians accept, and embrace this, en masse, progress will (continue to) be slow — and may not even materialize at all in some of the backwater states and territories (which would be happy just to obtain the quality of life promised by an Amish Paradise).

According to Transparency International, in 2013, India ranks 94^th out of 177 countries, with a score of 36, on the Corruption Perceptions Index which measures the perceived corruption in the public sector. In other words, while there are 83 countries that are perceived as more corrupt, there are 93 countries that are less corrupt. In comparison, the US is 19^th with a score of 73, Canada and Australia tie for 9^th with a score of 81, and New Zealand is seen as the least corrupt country with a score of 91. In other words, corruption is still quite bad. In comparison, China is 80^th with a score of 40 and Brazil is 72^nd with a score of 42. Corruption has become such an endemic feature of Indian administration and commercial life that in some parts of the country nothing moves in the intended direction until the palm of the deliverer is greased. (Dreze and Sen, An Uncertain Glory)

In addition, Bribery is a huge problem. In back to back studies in 2005 and 2008, Transparency International found that, despite efforts to curb the practice and corruption, the number of people who had first-hand experience with (and had to pay) bribes only dropped from 62% to 40%. In other words, 2 out of every 5 Indians had to fork over bribes to get a basic service that they were entitled to (such as getting a birth certificate or a passport) from a public official. Corruption is so bad that a NGO (non-governmental organization) by the name of 5^th Pillar distributed over 1.3 Million zero rupee notes (modelled after the 50 rupee notes) between 2007 and 2011 in an effort to fight corruption.

As clearly stated by the Accountability Initiative, spawned by the Center for Policy Research, Dharam, Marg, Chanakyapuri, New Delhi, there is surprisingly little regular, reliable and most importantly, accessible information on the implementation of service delivery programs in India today. And that’s being politically correct to the n^th degree. Dreze and Sen are more accurate when they state that, in An Uncertain Glory, particular to India is the combination of insistence — for entirely plausible reasons — on having a large public sector, combined with a fairly comprehensive neglect of accountability in operating this large sector.

The issue of accountability is particularly important when discussing the many infrastructure issues in India. The neglect of both physical infrastructure (such as power, roads, water, sanitation, etc.) and social infrastructure (education, health care, opportunity for employment, etc.) is extremely widespread. One of the biggest examples failure of public accountability is the crippling power blackout of July, 2012 which plunged half of the country into darkness and earned India the reputation of the blackout nation. This is a prime example of the lack of accountability as even the central guardians of the Indian power strategy at the highest level face little pressure to get things right and are not tasked to take responsibility for the terrible state of power planning in India (where double digit percentages of the power generated is stolen and where significant amounts of generated power is wasted). Consider the story of the National Thermal Power Corporation (NTPC) and the Govind Ballabh Pant Sagar power plant in Uttar Pradesh as recounted by Dreze and Sen. When one of the authors visited the NTPC headquarters on a campus near the plant, he found that a large number of air conditioners were switched on full blas throughout the day, even in the deserted lobby of the guest house. Just outside the boundary walls of the campus, people from the Dom community, working as ‘sweepers’ for the NTPC for twenty five years, live in shacks without any electricity. When asked why they tolerate the situation, they said they feared they would lose their jobs if they complained about their predicament.

It is the lack of accountability that allows corruption, and bribery, to continue to flourish. Corruption flourishes in informational darkness. Until there is more transparency, information accessibility, and accountability in India, it will continue to flourish. This lack of accountability combined with a general belief that certain kinds of bribery and corruption are standard behaviour that is to be expected is posing huge problems for India and limiting its progress. If there was less corruption, there would not only be more accountability, but more money available to address some of the serious physical and social infrastructure problems that we addressed in previous posts.