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The Rediff Business Special / P V Narasimha Rao

It's time to review liberalisation programme

Part I: The way to globalisation

Part II: Technology, consumerism, environment

Developed countries themselves would have to jettison their polluting technologies and the culture of gigantism earlier than later, for compelling environmental reasons. That would make the interests of all mankind coincide, regardless of developed or developing. The rich and the poor of the whole world are thus locked in a three-legged race and simply cannot break free from each other.

However, whether the developed countries see the writing on the wall just now or are cornered by politicised environmental pressures after some time, India can ignore the need to develop its own R&D in these technologies only at her peril. Power from the solar and wind energies with individualised and widely dispersed units at affordable cost ought to be industry's immediate concern, even more than tomorrow's Sensex figure.

I would be happy to see a prominent reference to this programme in Assocham (industry's) R&D brochures and projects to issue hereafter. For this purpose, Assocham (industry) now has a separate ministry in the government of India, but I am afraid it may be languishing for adequate status and attention -- particularly from industry. I wish it had figured with some promise in Assocham's Action Plan ending in 2005.

This long-term scenario is valid, to the extent leaders of the world decide, and the people who elected them agree, that the world, after all, is worth saving beyond their own generation and that it is never too late to return to sanity.

Employment for teeming millions is an immediate need

In the meantime, India has to find employment for its teeming millions through industrialisation and needs huge investments in infrastructure in power, oil, telecommunications, fertilisers and, of course, agriculture and irrigation, apart from roads, railways and ports. This immediate need makes it unavoidable to follow the present technologies for some time; yet even in this the technology that is flexible enough to admit of later modifications to suit changing considerations, if available, must get reference.

I understand that some such technologies with built-in flexibility are being fashioned today, thus anticipating future trends. India has to be constantly aware of and working with this imaginative approach. But on no account should the long-term vision, so different qualitatively from the present, receive less than full and urgent attention.

Please note that I am not talking about small scale industries here. I am talking about new and very sophisticated technologies that are size-neutral and wholesome for human existence. If I may cite a parallel, may I remind you that after the green revolution in the sixties, one miraculous thing that occurred was that per-acre yields of land in those areas became size-neutral as regards farm extents?

Prospects for human development in the liberalised era

With the huge portion that the private sector promised to share in the outlays on infrastructure as envisaged in the new liberalisation programme, the prospect of the human development sector had brightened immeasurably overnight. Government planned that the national outlay on education in India would be raised upward so as to reach 6 per cent of the gross national product by the end of the century: five years ago, the level was 3.7 per cent.

With government, the universities and industry, jointly and severally, continuing to give a new boost to scientific research and development, a new era of technological breakthrough at the national level appeared to be dawning, along with a massive conversion of unskilled workers into skilled workers in the countryside.

A sleeping giant called Rural India

This, coupled with the highest ever outlays on rural development, particularly rural employment, was to go a long way in waking the sleeping giant that is rural India. These ambitions seemed to become entirely feasible and were actually in sight, solely as a consequence of the private sector stepping in a big way into the infrastructure segment, a prospect that itself presented exponential possibilities at the time.

Liberalisation and unintended consequences

However, I have not been able to assess accurately to what extent this has happened. It appears to me that instead of solid infrastructure, phenomenal multiplication has occurred in the manufacture of passenger cars, televisions and many other such consumer items. This may no doubt be good, but I should point out that this was not basically what was intended when the liberalisation scheme was conceptualised.

The burden of infrastructure development has to be shared

In other words, government's burden on infrastructure does not seem to promise to come down as was expected, nor government's capacity to step up outlays on human resource development. I would heartily and most sincerely welcome any categorical refutation of this rather uninformed statement of mine, from you.

This is why I am making an emphatic suggestion that now, at the first decade point of the liberalisation programme, time has come to have an intensive look-back on its overall results and the benefits that accrued to the people, class-wise and section-wise.

The forgotten innovative principle

Some of you may recall that sometime in 1995, a new idea was adumbrated, based on some distant semblance with Mahatma Gandhi's Trusteeship Principle, but nowhere saying so. It was proposed that where we have a thriving industry or other affluent activity, those who live around could be given some essential items of development, preferably connected with the industry or activity and amenities in general. It was also an extension of liberalisation wherein the private sector takes over part of government's burden in providing development help to the local people so that an essential sense of belonging is established between the industry and the people amongst whom it happens to be located. There was an encouraging agreement in principle at two such meetings, if I am not mistaken. I think time has come to dig up that voluntary proposal once again and to make it a regular conventional covenant.

It can bring relief to needy people and smoothen matters locally, to a large extent. After all, when we champion the cause of reducing the government's participation, some of its unprofitable activity would also have to devolve on institutions where profit-making alone is the sacred duty.

The fallout of the infotech revolution

Right now, I am engrossed in assimilating the fallout of the new information technology and its mind-boggling possibilities in the coming century. In particular, I am trying to understand aspects other than the mind-boggling portion.

Since mind-boggling cannot be an end in itself, it is natural for each society to evaluate the effects of any far-reaching innovation on its own life and future.

In my case, I think I have to take some more time to understand different aspects -- such as knowledge, information, learning, innovative power, anticipation, futuristic vision -- and last not but not the least, the vision of the common good, which this revolution promises to bring. I am sure you will also realise the need to explore the full potential of this new weapon of progress well in advance.

Liberalisation is a means to transform the society, not a business ploy

I want liberalisation to grow as a sturdy child; I look upon it almost with parental affection. But I know that when it was conceived, it was meant as a means to transform the society -- purely as a socio-political process than as a business policy or ploy.

We tried other means for over four decades. If we discovered inadequacies in the means, we thought we should change it, by all means. And change we did, but most certainly, for the same purpose.

So I earnestly request the Assocham and its cousins to think constantly of change of means, but not, in the process, to tamper with the ends. That would lead to a totally new and chaotic ball game, which I, for one, would never agree with.

Former prime minister P V Narasimha Rao delivered the second JRD Tata Memorial Lecture, organised by the Associated Chambers of Commerce and Industry of India, New Delhi, on November 1. The article is based on his speech.

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