India Unbound

Understanding reforms

In other countries, the entrepreneur’s battle is with competitors. In India, the main enemy is the government bureaucracy. Indira Gandhi’s government became even more rigid, introduced more controls, and became bureaucratic and authoritarian. It nationalized banks, discouraged foreign investment, and placed more hurdles before domestic enterprise. In the past ten years, the government has been trying to undo the mistakes of the past.

Das argues that in any society, the top 15 percent of the people will do well and look after themselves. The bottom 15 percent will fail and will need to be looked after by the state. The focus of the reforms must be the 70 percent in between, the vast majority of the people, who in successful economies form the middle class.

Britain gave India the English language. However, Britain also divided India into two nations-the 10 percent elite who learned English and shut out the 90 percent who did not.

Gandhi distrusted technology but not businessmen. Nehru distrusted businessmen but not technology. Instead of sorting out the contradictions, India mixed the two up and created holy cows. Small companies are better
than big ones (Gandhi); public enterprises are better than private ones (Nehru); local companies are better than foreign ones (both). They so mesmerized us that their ideas remained live and kicking even after they passed away.