Decontrol, Privatise, Empower – Finally, The Indian State Accepts Its IncapacityBloombergQuintOpinion
India is inexplicable. Just a cursory look at a few indicators will prove how we suffer at the hands of perhaps the most inefficient state on earth. Too many infants die, many who survive are malnourished, we exploit women citizens, our forests are depleting, our rivers are drying, urban drains stink and overflow, undertrial prisoners languish without bail, minorities ghettoize in dread, and young people remain unemployed in their most productive years. Yet we see a curious paradox. Indians continue to have a touching faith in their state!
I first confronted this paradox in the 1990s, ironically the decade in which India’s private enterprise was unshackled. For nearly half a century, we had been held in thrall by the state. Whether we bought a phone, flew to another city, kept our savings in a bank, bought an insurance policy, or watched television – these routine and everyday activities could only be done via an instrumentality of the state. Sounds weird and intimidating, right? That you just couldn’t walk across to the nukkad (corner) mobile shop to buy a phone? Or trawl through a price comparison website to be wooed by a dozen airlines or banks or insurance companies willing to cut you a good deal?
But Wait. Come 1991, State Monopolies Were Smashed Open...
Suddenly, glossy logos and jingles began to assault our senses. Airtel, Orange, HDFC, ICICI, Jet, Kingfisher, Indigo, Zee, Star, Sony… all private products trying to wean bemused Indian consumers away from dour and dull MTNL, BSNL, Bank of India, Air India, and Doordarshan. Predictably, state-owned brands got huddled in retreat, failing to match the aggressive marketing, branding, or price/value tactics of freshly minted private competitors.
So, you thought that a dazzled Indian consumer would have been thrilled and grateful, right? Well, think again. Every survey in those days would throw up a mysterious conundrum:
- Which airline do you trust most? Believe it or not, Air India and Indian Airlines would win that contest hands down (I kid you not – trust Air India!);
- Which is your preferred bank? Even some of the stodgiest public sector banks would trump the classy ads and artful interiors of the newbies;
- Who would you buy your insurance policy from? Who else, but LIC, GIC, and their likes;
- Now you simply won’t believe this one – even MTNL’s patchy service was preferred over the spanking new technology of the newcomers;
- And yes, only Doordarshan was trashed versus Zee, Star, and Sony (except for in the Ramayana and Mahabharata slots, where DD ruled supreme) – but c’mon, you needed one exception to prove the bloody rule, right?
Why Indians ‘Loved the All-Powerful State’
Frankly, while it may have appeared counter-intuitive, there was a somewhat cruel explanation for this ‘love of the state’. Indeed, it was India’s abiding incongruity – at one level, we suffered under a super-state that had kept us poor, but at another level, that grinding poverty also kept us in bondage to the state.
The Indian state had become a two-headed monster – its bigger, more visible, and ferocious head was vindictive, while its smaller, softer head was also the ultimate anna-data/mai-baap, which also fed and protected the vulnerable. Our state had transformed into a post-independence ‘neo zamindar’, or new-age landlordism, which exploited mercilessly, yet when violence became intolerable, its victims had no option but to crawl before the perpetrator, begging for mercy.
This mindset, the state as Brahma/Vishnu/Mahesh, the creator/preserver/destroyer, that hounds but also has the sole power to rescue, has remained eternal, from the 1950s/60s through to the second decade of the 21st century. Until now. Until a tiny virus has forced the monster on its knees. Today, the Indian state is crumbling under its own weight, unspooling because of its power grab.
Retreat, Surrender, Acceptance
I can almost hear you ask “dude, how can you make such a sweeping assertion?”. Well, look at the government’s ‘welcome surrender’ before the Covid-19 onslaught. One year back, it arrogantly said “step away, ye private guys, only I, the mighty Government of India, have the right to test, prevent, and banish this health/existential crisis”. Soon it realised its severe limitations, capitulated, and opened testing to private labs.
So, the Indian state scampered/retreated to the other end of the spectrum, throwing everything open to the ‘oft ridiculed’ private sector – now anybody in the cohort can walk in at any health facility anywhere in India showing any kind of photo ID to get the jab. From “no, you won’t”, it’s now open sesame, ie “please do anything, dear private people, but save my country from Armageddon”.
I daresay that I am utterly delighted by this retreat of the mighty Indian state. Finally, it’s accepted its incapacity.
And if you thought this was ‘one swallow making a summer’, think again. Exactly thirty days earlier, the Indian state had confronted yet another bitter reality, that it was incapable of running business enterprises, and needed to “aggressively privatise” (to quote our energetic Prime Minister). Just shedding this shibboleth could get the emaciated Indian state over half a trillion dollars of investible resources, provided it acts quick and fast.
So, we’ve seen two massive retreats by our imperious state in a single month. I reckon the Ides of March came early this year, in February 2021, when the Indian state made peace with its incapacity.
Raghav Bahl is Co-Founder – The Quint Group including BloombergQuint. He is the author of three books, viz ‘Superpower?: The Amazing Race Between China’s Hare and India’s Tortoise’, ‘Super Economies: America, India, China & The Future Of The World’, and ‘Super Century: What India Must Do to Rise by 2050’.