The last few months has witnessed an unprecedented euphoria over the fact that there has been a queue of visiting dignitaries of the world's largest economic powers, all of them wanting to do business with India. Indian media has been gloating over the fact that these countries are talking about doing multi-billion dollar deals with India.
However, my this blog is not about what is so good about it, but what I perceive is not good with India today. I present a few serious issues that require answers:
- Growth or growth with a purpose? The 8% growth has obfuscated the fact that mere growth cannot achieve anything unless there is a purpose to it. Wealth accretion has become an end in itself. This spectacular growth has been possible on the back of the IT industry which itself has grown based on rate arbitrages. Unfortunately, while quite a bit of this wealth has percolated down to employees, a large proportion has remained with the owners of companies, who have hoarded it or used it to amass personal assets. We have the Ambani brothers competing to spend splurge on needs which are way beyond what even a wealthy person would need. In this entire process, these neo-entrepreneurs have forgotten that money cannot be an end in itself and can at best be a means to something worthwhile. The record of the West speaks for itself. Warren Buffet, Bill Gates and a clutch of American Billionaires have decided to give away in excess of US$125 billion in wealth. This is nearly 10% of India's GDP! Surely they know what is the purpose of wealth.
- Widening disparities between the haves and have-nots: As a country, we have definitely not been able to stand for Socialism as provided in the Constitution (through the 42nd amendment in 1977). The well known Gini Coefficient shows India at a disappointing 119 rank. The income disparities between rural and urban India are particularly discouraging.
- Failure of governance: Companies have rarely given any importance to Governance. The executive-shareholder of companies have failed to make a distinction between the two roles, and this causes a serious compromise of their position. The Satyam Saga that rocked Indian corporate world is symptomatic of what happens through many Indian companies - it is just that they have not risen above the radar. It takes immense courage for a Narayana Murthy to decide to step down - I am not certain whether the remaining executive-shareholders of Infosys have the same courage. The choices are clear - either a governance code should be evolved by the powers that be, or we should, as a Nation, learn to live with continuing episodes such as Satyam. At a larger level, the 2G scam which is now the flavor of town is a reflection of the same lack of distinction between the role a person plays and the possible influence that a decision that he or she takes can play on his or her own wealth or assets.
- Over-reliance on systems at the expense of people: The immense success of IT in being able to assert India's position in the Global order of merit has made us believe that creation of Systems is the panacea for all evils. Every other 'intelligent' person that you talk to believes that he has a solution which is a cure for one of the big problems the country is beset with. Unfortunately, most of this optimism in success of systems comes from arm-chair lotus-eating philosophers who have perhaps been bred in Western world, and see the solutions spawned in the west as the best for our ills. Unless we realize that India is a completely
different Nation, with a different set of problems, the systems approach is unlikely to succeed. India's strength (and its weakness) is its people. Unless we harness this strength, educate the people, convince them about what is good, no system will succeed. Remember the stiff resistance from all public sector banks when the idea of bank computerization was first mooted. Thanks to a steady influencing and education of the banking staff, the situation has completely reversed today. - Measurement metrics: Learning from our western counterparts, we have established measurement metrics which are oriented towards measuring the end result, and not the process itself. One of the major truths about Indians is that unlike the behavior of people (and therefore systems) in the western world, where a direct cause-effect relationship is expected, in India, the path is not so clear. Therefore, the importance of measuring the process is more important. Yet, if we look at all the statistics that are being put out (number of mid-day meals delivered, number of free text books delivered, grants or subsidies given, improvement in health parameters), we either concentrate on input measures or output measures and never the process measures. What is time to impact, what are process losses, what are throughputs? Rarely do we find anyone measuring these, whereas in order to optimize resources this is perhaps the most important measure. If indeed there are leakages in the system (in terms of wealth, or in terms of resources, assets) - Rajiv Gandhi once famously made the statement -"Of every rupee spent by the government, only 17 paise reached the intended beneficiary"; and yet we continue to be obsessed with the measurement of the end result rather than trying to measure the process itself. Perhaps it is a matter of convenience for all concerned.
While I have hope that things will correct (India is one country where there is a fantastic corrective mechanism), the frustration is that we are happy the way things are and do not try to change things. Hoping for a better future in 2011.
