“The eye of the tiger” takes on new symbolism on the cover of this week’s Economist which asks the question: “What’s Holding India Back?”
Using India’s finance minister P. Chidambaram’s recent statement that the “tiger is under grave threat” as a clever segue, the Economist takes a close look at India’s “tigerish economy,” arguing that it’s 9% a year average growth is under threat “because it has failed to reform its public sector.”
Here’s a quickie roundup of the news package to start off your week.
The lead story “India’s Civil Service: Battling the babu raj” takes a critical look at India’s hardworking “armies of clerks” (IAS officers), concluding that “India’s malfunctioning public sector (and civil service adminstration) is India’s biggest obstacle to growth”:
Indeed, all India’s administration is inefficient. According to the Congress-led government’s own estimate, most development spending fails to reach its intended recipients. Instead it is sponged up, or siphoned off, by a vast, tumorous bureaucracy.
This is not new news. Rajiv Gandhi,, as Prime Minister of India, once lamented helplessly that out of every rupee spent for development only 17 per cent actually reached the poor. But the following explanation about the ineffective reforms of India’s bureaucracy from author of an IAS history, Sanjoy Bagchi, certainly caught my attention:
“Overwhelmed by the constant feed of adulatory ambrosia, the maturing entrant tends to lose his head and balance. The diffident youngster of early idealistic years, in course of time, is transformed into an arrogant senior fond of throwing his weight around; he becomes a conceited prig.â€
I can just imagine the reporters writing this piece, going “Wow, we really have to find a way to use that quote!”
Anyway … another point that I found striking was that although the cover story expresses concern that India’s 9% growth rate is not sustainable, India remains one of the world’s four biggest emerging economies which accounts for two-fifths of global GDP growth last year — and is one of four world nations least dependent on the US: exports to America account for just 4% of India’s GDP. This, I did not know. [see “The decoupling debate”]
The entire package on India is worth checking out (and available online). Other pieces are “India’s budget: Write-offs as high as an elephant’s eye” (what is up with elephant and tiger references throughout this issue?!!) which looks at finance minister P. Chidambaram’s fiscal plans, including writing off farmer’s debts and raising the salaries of government employees.
There’s also a review of Columbia University economics professor Arvind Panagariya’s new book India: The Emerging Giant (OUP) which is described as a “comprehensive single-volume chronicle of the history of economic policy in India since independence in 1947 and its role in shaping the country’s fortunes.” The review brings us full circle to the argument that the Indian government needs to go bullish on structural, administrative reforms or else, risk smothering its growth momentum.
This was my favorite quote:
indians deserve much better. we’re a naturally gifted, enterprising, good-natured, and hard-working people. the PPP of india should be at least $15000. currently, it’s $4000. anyways, india could have more of an export-driven economy given the cheapness-undervaluedness of the rupee. moreover, THE POPULATION SHOULD BE CONTROLLED. I’d hate to see India as crowded as a Pakistan (Pakistan has a higher physiological population density, which is based on arability of land) or B’desh. The population of india should be 400M.
indians deserve much better. we’re a naturally gifted, enterprising, good-natured, and hard-working people.
LOL.
reality check: Education and the Asian Surge (PDF).
I’m an ABCD so I don’t really know what I’m talking about but when I was in India a couple months ago I noticed two things. Despite the obvious growth going on, there’s something about the Indian mentality that is different than in the West. There is so much overlapping bureaucracy that you can’t buy a train ticket without going to three offices and filing out five forms. People don’t know how to observe basic decencies, like letting passengers off in the Delhi metro before charging in. I could go on but that’s a huge problem. The other problem is just the population growth. If you have 9% growth a year but your population is growing twice as fast as China then you aren’t making as much progress.
The other problem is just the population growth. If you have 9% growth a year but your population is growing twice as fast as China then you aren’t making as much progress.
let’s keep in mind that there’s a lot of variation within india. eg: The Total Fertility Rate (TFR) in Andhra Pradesh has declined from 4.6 in 1971 to 1.8 in 2005-06, while the all India rate during the same period came down from 5.2 to 2.7.
I’m more interested in saving the actual tiger. The latest (warning: large file) report on the state of India’s tiger population and nat’l parks is a pretty disheartening read. Chidambaran’s double-entendre is apt because the problems are similar — a hazy sense of civic responsibility, be it for tigers or for public service.
2 · boston_mahesh said
how?
Is this a new valuation? From you comment, I don’t think so. But how did you arrive at this particular figure?
we’re good looking and endowed like a moose too. our feces is especially aromatic – like the smell of fresh peanuts and oatmeal.
Sandhya,
Thank you for an excellent write up, I think Economist’s coverage of South Asia has been mediocre at best in terms of quality and there has been a lot of coverage in the past year. These articles are definitely in the same vein.
With regards to decoupling, I read somewhere that more than 60% of the growth in India’s GDP is on account of domestic consumption and I wonder if 7%+ growth for since 2003 is really holding India back. There are positive steps being made and it will be interesting to see how they all translate in the next few years.
FOB Wannabe, I am not sure where you were buying your rail tickets but I have never filled five forms in three different offcies to buy a ticket so please keep it real.
What?? Pakistan is overcrowded ?? Pakistan has only 1 huge city in Karachi. Rest all are smaller cities compared to India. Until 6-7 years ago Pakistan had higher per capita GDP than India. The abject poverty that is seen in India is not seen in Pakistan (as per William Darlymple) which may be due to not having so much strain on resources.
Rc,
I think Boston Mahesh has a history of making such grandiose statements.
Portmanteau,
Sanjay Gandhi’s reincarnation will help complete the task he started and the population will be controlled 🙂
Is this meant to be ironical or are you serious?
2 · boston_mahesh said
400M, are you kidding me? In case you haven’t noticed lately, India has well over a billion people, so how do you go about getting rid of 600 million? I, along with FOB wannabe, am a ABCD, so I know my opinion about India must be wrong, but I am sure that the Economist makes many good points about Indian bureaucracy. The government continuously holds back the progress of the country with needless corruption and wasted money.
A day at the DMV seems like a walk in the park if you have ever had the misfortune of dealing with Indian bureaucracy. Economist is right about the stranglehold of the bureaucracy, any progress India has made in the past decade or so is in spite of any help from the government (local and central) not because of it. In shining India, the infrastructure sucks, this includes roads, electricity, phone service etc. Yes things are improving but a lot still remains to be done.
14 · Jay in the A2 said
Before you get all snarky with the good Mr. Mahesh, you will do well to read up about Chandrayaan. ‘Go to the Moon, you 600 million people’ is how we will get that done.
11 · RC said
Alright!!! Let’s get it on with the ‘my open sewer is better than your open sewer’ logic.
Another piece of the puzzle. PC is such a genius.
This article is one-sided, and doesn’t really paint a full picture. Yes, the Indian bureaucracy is at times slow moving, officious and reactionary. It is also the glue that holds the country together and maintains political stability and economic incrementalism. For a country whose circumstances are as precarious and whose growth is so exhilarating and yet so jarring, having this conservative force is necessary and, in this case, the Economist’s article lacks nuance and full understanding. This was true in the 1950s and 1960s when the civil services were the main reason India didn’t become Pakistan, and its true today.
Moreover, when you meet the new generation of IAS officers (the guys / gals right below the top level), its a very different feel. They are as dynamic as anyone I’ve met in the private sector.
Yep.
Also, growth-growth everywhere without consideration of the environment.
Often they build big fancy condos or apt buildings that look nice from the outside but inside nothing works.
I think this has alot to do with the unskilled laborers who are hired to build things. I am talking about almost zero education for these people, and they are building condos!
The whole place needs a revamp from the top down and bottom up.
What’s that place just outside of New Delhi where they build one multi-story hi-fi AC shopping mall which brought in alot of roops, and then what happened? You now have 20 such malls all lined up right next to each other and more being built, and none bringing in that much money.
No foresight. No planning. Just building, building, building.
What’s the name of that place? Not Gurgoan, the other one….
What about a post about the real Royal Bengal tiger? India is about to lose its greatest treasure. I’d like to see some more blog posts related to nature and enviroment in India.
Please keep it on topic, everyone. Time spent moderating means less posts on everything, not just tigers. Thanks.
true that. these apt buildings are pretty swank, but little things dont work. I kno this guy who lives on the fifth floor of a mid-rise apt building. he has a bidet in his washroom. well… it turns out there is no regulation to the water supply. The water literally falls 200 meters to his bidet. The first time he used it, it nearly blew him another hole. it’s funny when you hear about it, especially when he told me about his hemorrhids getting clocked like snooker balls.
Related to what Razib said, the TFR for the southern states is rapidly falling below the 2 benchmark and the states in the center are also along that route. However, the beemaru states (UP, Bihar, etc) are over 4 for near and mid term projections, I have not seen them falling below the 2 mark. This will result in interesting population dynamics with people from these states dominating the populace and thus development in these states in terms of education and industry will get more and more crucial in coming years.
As for development, a point of consideration is the agriculture sector accounting as the primary occupation of over 50% of the populace. This sector in good years grows at about 3-4% and accounts for about 25% of the GDP. A big problem there, both in terms of actual GDP growth and Gini index concerns. Thankfully manufacturing which can be a viable option for movement of people in the agriculture sector is registering double digit growth figures.
“City Planning”, what would be sweet irony is this additional example in your litany of the backward and wannabe India it was called Pardesi Gurgaon, you know, like your name PG.
srry to nitpick.. but when was this? I am 30-year-old Delhi’ite and in the pre-internet age, i remember standing in line with papa for the annual journey to kolkata one month before the planned date. I distinctly remember that the application was on a small, single form which had columns to fill in the names of the passengers, age, et al. Of course, now I can’t remember the last time I stood in line for a ticket – everybody, i mean everybody does it online or through mobile – even a travel agent will get it online, rather than stand in queue. If you don’t have a computer, the neighbourhood cyber cafe owner is usually the one who books the ticket online for the residents in his colony.
Coming back on topic, I think e-governance is not just a pipe dream, but something which can be a panacea for a lot of administrative issues. For example, land records. If I am not mistaken, land records have been computerised and put online in certain states. That takes out one area for bribe-taking by the local patwaris, as well removes a certain amount of office burden. Then, birth and death records can now be obtained online.
Another personal example is that of property tax that the Delhi municipal corporation levies. The earlier payment by house owners was at the mercy of babus and I am sure that there was a lot of under the table shenanigans going on. Now, it is entirely by self-assesment basis and it has to be submitted online – no hard copies accepted. I did it for the first time last year so its first-hand experience – it was a quick, clean and hassle-free procedure.
I think i am sounding a bit too sunny, but the fact is that I have seen things improve and the administrative process becoming more and more decentralised. Take the local water, electricity and phone bill submission as another example – my mother had to travel to the district office to give them, now it’s just a walk away to the nearest colony office. Therefore, I think the chances of “small” corruption will diminish over time – but at the same time, it will be fascinating to see the response of the entrenched vested interests to such change. I am sure there will be some kind of backlash – at the same time, I can’t foresee it being more than isolated cases like the one by the Rajasthani nurses.
Scribina,
You are right about the rail reservation, although there may be three forms and five office visits for FOB Wannabes that we are not aware of 🙂
An aside, this PG spotting game is getting interesting and I suggest we should start a pool.
Thank god for the bureaucrats that have saved the country and who rule over the ignorant masses who don’t know what is good for them, next up ignorant masses are going to be educated about how the license and quota raj was so great for them as was waiting for months and so times years for something as simple as a telephone while the IAS officers lived in huge apartments/houses and were provided with servants all on the taxpayers rupees.
should read sometimes, sorry for the typo.
you were probably asking around for a train ticket in a circus or something….
You might be right with other things but buying/reserving a train ticket is one of the easiest things to do in India… (even if you buy it at the counter)
Agreed, it was not that hard even ten years ago, I was in India for a visit, just went to the booking office first thing in the morning came home with tickets in less than an hour with the tickets I wanted, this includes the travel time as well.
SM Intern Just to inform. #30 is not me.
FOB Wannabe : What does “ABCD” stand for ?
City Planning :
Its called “NOIDA”.
I saw “Om Shanti Om” at a theatre in that mall during my visit, last December. Except for the hindi dialog, I could have been at any multiplex in the U.S.
just to inform: # 32 is not me 😛
just to inform – me neither. #30, #32 AND #34 is not me.
To make it crystal clear, khoofia is NOT bulbul.
that is all.
In a post that is rife with Sandhyas why is a bulbul not a bulbul? BTW, I am me.
To preemptively clarify things, I am not now, nor have I ever been, PG.
I’m finding this a little tough to believe – it sounds like a scheme out of Spy Vs Spy in Mad Magazine. Which city was this? I’m conditioned by my experiences with Chennai water supply, which would be somewhat incompatible with the concepts of pressure, supply, or for that matter, water.
I said it, and I’ll say it again, “Pakistan has a higher physiological population density, which is based on arability of land“. Please read about “physiological population density” and compare India’s and Pakistan’s. So, yes, PakiNadu is over-crowded, and even more so than India.
Oh yes, you’re 100% wrong about India having a higher per capita than PakiPradesh about 6-7 years ago. It was exactly in ’98 – which is 10 years ago.
And “yes”, I also believe that Indians should have a PPP per person of $15,000. Why shouldn’t Indians have this much of a standard of living? Educate the masses, improve the infrastructure, liberalize the economy, and enjoy capitalistic moksha.
11 · RC said
Serious. Do you not think that your extended family in India, as great as they are, are capable and deserving of a $15,000/year lifestyle?
13 · Yogi said
If they are that great, why are they not in America?
I think if the state were to wither away… India would become a great place to live in… Anarchism is a fast growing ideology in urban areas.
Hah! Sounds like France. The French don’t know about things like standing in line, not interupting conversations and other basic civil things. And even when waiting your turn is cursorily observed, the person at the head of the line thinks that they and everyone else have all the time in the world to exchange general unmeaningful pleasantries. It’s a huge problem and anyone visiting from the Anglo world will notice this sooner or later. Living in France is a huge exercise in patience.
Wow, I’m gone for a day and there’s so much to think and talk about … I think we all agree that the red tape surrounding the administration and state services (including buying train tickets) could use some cutting. There are a few experiences that come to mind:
When I got married in India a few years ago, my husband and I took a trip to the local court office in Coimbatore with my in-laws to get our marriage certificate. We were there for almost two hours watching the clerk type four copies of the certificate, painstakingly fill out the forms by hand, and then, disappear into a back room to get the necessary signatures. I think at some point we went out for a drive and came back to pick up the forms, even. All of this could have taken 20 minutes tops, but you know what? Nobody seems to care and it’s taken for granted that official paperwork should be a lengthy ordeal. I think that civil service officials at the higher echeolons may have access to resources such as xerox machines and scanners and computers, but until that trickles down to the local and city level, we’ve got a long way to go. Then again, maybe in the old days it would have taken a day or two … And maybe a few hours is a big improvement?
Another experience that sticks in my mind: We were in India recently and drove on the national highway from Udaipur to Ahmedabad. I have to say that I was mighty impressed by the roads. They were wide and open, and there were even little gardens in the middle of the highway, of the type that you see on the Garden State Parkway. But, then we got to the tolls and there were a couple of lanes that were marked “Official Cars” or “Government” or some such … And the line leading up to the toll booth was pretty long. Our driver thought that lane would move fast so he queued up behind it … Ah, bad mistake. Some of the “official” cars were probably no more than friends of friends of the officials because they were stopped there for about 5 minutes each, arguing over whether to pay or not to pay … Until finally the booth attendant looked exasperated and waved them on. This just made me think about the perks at all levels make their way to the bureaucratic babus and their circle of friends … and I wouldn’t be honest here if I didn’t admit that on occasion, I too have been the recipient of such favors – for example, getting access to to special movie tickets because someone I know knows the local IAS officer or whatever ..I can’t imagine going to the local Loews and saying, “My cousin is a cop. You have to get me into the 7:30 show of [insert movie of your choice]”!
Overall though, I’m with scribina on this:
41 · serviced apartments bangalore said
yes, my cousins are urban-guerrilla-graffiti-artists, and would not buy into consumerist moksha. their parents, my aunts and uncles, wear only khadi and are totally anti-development-anti-dams-anti-nukes-anti-imports-anti-exports. they are BFFs with arundhati roy. they live in a commune in pondicherry and laugh at the unenlightened hindu-fundies who get hot about PPP, the 9% growth rate, mata-rani, shilpa shetty, and mahindra SUVs. idiots.
i hope boston mahesh soon replaces montek singh ahluwalia, chidambaram, the whole planning commission, and other assorted policy wonks. his vishwa-rupa will undoubtedly solve all the problems of india.
just curious… how did you figure out the reason for the cars ahead of you waiting 5 mins? And why did you get into the official lane?
Hmmm, actually saying “my cousin is a cop” will probably get you a stare in India too… might work only if your cousin directly knows the people involved, etc.
What kind of an improvement do you envision w.r.t train tickets??? (because people commenting above said it was fairly reasonable already)
The rental car driver got into the official lane, thinking that it would be faster. When we pointed out the (to us) obvious error, he told us it would be faster … And knowing that there was little we could do, we sat back and watched all the cars in the other lanes pay their tolls and move on … While the drivers in the cars ahead of us chitchatted back and forth with the toll booth attendant, the toll booth attendant came out, went back in, came out, then they were waved on … You’re right, I’ll never know for a fact who they were or what went down, but I took the driver’s word for it when he said “Kissi official ka dost hoga … Aisa hamesha hota hein…” (must be a friend of the official…this always happens… They don’t pay tolls…)
Point. Maybe cop was a poor comparison … I was thinking more about a high-post official or town personality being the reference point …
For people who have access to the internet or travel agents, buying a train ticket is indeed much easier nowadays. But I was thinking about the many people who have to take a trip to a train station to wait on a long line to buy a commission-free ticket much ahead of time, given how full trains get … I’m sure there are ways to make things easier and more efficient … Like maybe we don’t have to provide all our personal information when filling out a form at the train station just to purchase a ticket – why does anybody need to know how old I am?!! Ever notice those pieces of paper on the outside of the compartment — you can find out a lot about your fellow passengers, much more than I’d want known about me!
I think they’re bringing automatic vending machines to stations this year (or may alredy have) and have introduced mobile phone technology . to purchase tickets, both of which are exciting developments. An interesting chart of the rise in e-sales is here http://www.thehindubusinessline.com/2008/02/27/stories/2008022752600700.htm
Sandhya,
On the issue of train tickets, you are right the mobile phone ticket option is available right now. As far as travel agents, I believe they are in most places and not just large towns. With respect to references working in day to day things, it was definitely all over few years back but is changing, I repeat that public is getting more vigilant and accountability of public officials is being enforced at levels I had never seen in my life.
How does one book a train ticket in India over the net or via mobile phone without a credit card?
Most people in India do not have credit cards, and many do not have mobile phones or knowledge of how to navigate the net.
Anyway, visit any small town/village post office to see how efficient “the system” actually is in India.
Also, try being an ordinary small town Indian citizen and getting a passport! You have to hire lawyers just to get a passport!
Just to correct Boston Mahesh’s innumeracy, but per capita income in India actually only overtook Pakistan in….. 2007!
http://www.imf.org/external/pubs/ft/weo/2007/02/weodata/weorept.aspx?sy=1990&ey=2008&scsm=1&ssd=1&sort=country&ds=.&br=1&c=564%2C534&s=NGDPRPC%2CNGDPDPC%2CPPPPC&grp=0&a=&pr.x=43&pr.y=0
IMF has data and statistics and comparisons for pretty much every country since 1980 at their website. As you’ll notice, actual per capita GDP in India and Pakistan didn’t overlap until 2007. In PPP adjusted per capita GDP terms however, India overtook Pakistan way back in 1993. However, there is a big caveat here as earlier this year the Asian Development Bank adjusted their figures for their PPP multipliers (Not yet reflected in the IMF data) to take into account higher than estimated inflation and price increases. I don’t recall the exact downward revision for Pakistan, but I do remember it was marginal. India’s PPP multiplier was adjusted downards over 36%. What this ends up meaning is that it was only last year that India’s per capita GDP overtook Pakistan’s in exchange rate terms and in PPP terms, Pakistan’s may actually be higher than India now.
How does one book a train ticket in India over the net or via mobile phone without a credit card? Most people in India do not have credit cards, and many do not have mobile phones or knowledge of how to navigate the net.
Not to justify red tapism in India or anything.
There are haazar small time companies (and middle men) who do it for you (get a railway ticket) for a small fee. Also, walk on the railway station counter, and you can get a ticket very easily, and that always been the case. Millions, and millions travel on train every day.
Many things in India are convoluted, but getting a railway is not one of them.
Also, almost every one in India now has a mobile phone.