Agree to differ

Published on: February 15th, 2001

By Gurcharan Das.
Knopf; 384 pages;
$27.50; 495 Indian rupees.

By Dipankar Gupta.
Harper Collins; 225 pages; 195 Indian rupees

A DECADE after discarding comforting but self-destructive ideals of self-sufficiency and economic planning, India is in the midst of a great debate about the consequences. The antis mourn two losses: dedication to equality and an approach to development that was distinctly Indian. They fear, in a word, that India is losing its soul. The pros revel in India's new information-technology prowess, the unshackling of business, faster growth and the hope that it will reduce the country's appalling poverty. They celebrate India's reconditioned body.

“India Unbound” is by an unabashed pro, an ex-boss of the Indian part of Procter & Gamble who has moved into business consultancy and writing (he has done a novel and three plays). Thanks to economic reforms, he writes, “we have glimpsed paradise again and are on our way to regaining it.” The author of “Mistaken Modernity”, a sociologist at Delhi's leftish Jawaharlal Nehru University, is an ambivalent anti. He does not condemn outright the reforms of 1991, which entailed deregulating business and opening India up (partially) to foreign trade and investment. Like many Indian sceptics, he is nostalgic for the days when production decisions “were tied umbilically to national development and sovereignty.”

Gurcharan Das is correct that the umbilicus was strangling the baby. But there is less conflict here than it seems. Both sides in this debate are avowed enemies of what might be called old India, which remains in many respects the India of today. Its features include discrimination against women, caste barriers, Hindu chauvinism, official corruption, advancement based on patronage and, for business, profits without competition. Dipankar Gupta contends, justly, that India's fascination with western gadgetry and lifestyles has not brought modernity. You can subjugate women and make a weapon of religion just as well with a mobile phone as without one, probably better. True modernity, Mr Gupta writes, entails adhering to universal norms, upholding individual rights, making the state accountable. His book pleads with India to put modernisation in place of “westoxication”.

There is nothing here that true globalisers would not support, with enthusiasm. Their argument with the antis is really about money. Mr Gupta and others who are suspicious of reform seem to share the high-minded attitudes of India's first prime minister, Jawaharlal Nehru, who once told J.R.D. Tata, head of the country's most respected business house, that profit is “a dirty word”. To take a more recent example, Arundhati Roy, India's Booker-prize novelist, not long ago wrote a long and impassioned article in one of India's weekly magazines portraying capitalists, especially foreign ones, as plunderers.

Mr Das, on the other hand, thinks that capitalism will cure many of the ills that Nehru's socialism compounded. The cosy corruption of old Indian business habits cannot withstand competition, he suggests. Although the commercial baniacaste was useful in kick-starting Indian capitalism, Mr Das points out that in a liberalised economy governed by rules rather than patronage, companies cannot afford to hire employees on the basis of caste. As for poverty, contemporary India's worst blight, education will spread the benefits of economic growth to the masses.

One problem supporters of reform face is that its effects do not look very egalitarian, especially in an Indian context. Indians disagree whether the past decade of halting reform has reduced poverty. No one disputes that it has thrown up a vulgar, sharp-elbowed new middle class. Mr Gupta, with a tweedy disdain, has made its members the villains of his book, not without reason: many dodge taxes and welcome the stark difference of income that ensures an endless supply of cheap servants. Mr Das nevertheless concludes that “whether India can deliver the goods” will depend a great deal on this new middle class.

Despite its occasional repetitions, “India Unbound” is not only more persuasive but more enjoyable. Mr Das, whose career spanned the darkest and brightest eras in Indian economic policy, tells much of his story autobiographically. When he was manager of the Vicks VapoRub brand in India, flu epidemics posed absurd dilemmas: should he boost production beyond licensed limits (a punishable offence) or leave market demand unsatisfied?

Mr Das looks back to the rise of Indian business families, some of which often began with enterprising young men outwitting British monopolists, and offers management advice to their heirs, many of them now addled by decades of planning and protection. His real interest, though, is in the info-tech companies that sprang up in the 1990s. They are India's chance to achieve the rates of growth and poverty reduction that East Asia accomplished through manufacturing, or so Mr Das and many other IT-besotted Indians believe.

Though Mr Gupta prefers sovereignty to success, he makes good observations about the grip of tradition. India's tendency to throw up humanitarian heroes like Mahatma Gandhi and Mother Teresa is a sign of weak institutions, he believes: where these are stronger, saints are less needed to protect the weak. Women stand out in South Asian politics, he explains, because they are assumed to lack characters of their own and can take on the charisma of their (often martyred) husbands or fathers. All in all, however, his book relies too much on the author's opinions and too little on his expertise.

Mr Das's faith that IT plus education will restore India to greatness and prosperity can sound over-hopeful. And he mentions only in passing the urgent needs of agriculture, which continues to occupy two-thirds of India's people. But his book is informative, entertaining, and basically correct about India's need to embrace capitalism more whole-heartedly, for all the costs and risks.

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