ET Bureau
Atul Kohli is the David KE Bruce Professor of International Affairs and Professor of Politics and International Affairs at Princeton University. His latest book 'Poverty Amid Plenty in the New India' is an incisive analysis of the country's political economy over the past three decades, a period that saw rapid economic growth and sharp rise in inequality. He says our "pro-business ruling alliance" and its policies have created a host of new political problems. It is crucial our rulers don't underestimate class anger, he adds. Kohli, who had blamed state intervention for a variety of India's problems in an earlier work written two decades ago, now argues that state intervention is critical for inclusive growth. The Jhansi-born scholar tells ET in an interview that most of the Centre's efforts towards inclusion have been half-hearted. Excerpts:
What prompted you to write this book on growing inequalities and growth in India? Does Mukesh Ambani's mansion amid Mumbai's slums reflect the message in your book?
I wrote the book because it needed to be written and I was in a good position to write it. It needed to be written because India's growth acceleration is admirable and requires understanding. Conventional understanding attributes this shift to liberalisation in 1991. At minimum, this view needed to be qualified, if not corrected. Champions of liberalisation were also too sanguine about the pattern of growth, which was creating very few jobs and leaving many behind. This too needed to be said and explained. I was in a good position to write such a book because in the past I have worked on issues of the Indian state and democracy, politics of economic growth, on problems of poverty and redistribution, and on regional diversities across India. In the present book I bring all these themes together. As to the Ambani mansion amid slums, I suppose, yes, that does symbolise the message of the book (as does the book cover), but please note that the book is a serious scholarly study that stays away from throwing stones at individuals or at specific personalities; it is about general patterns.
Can you name a few incidents that highlight the "new political problems" of India's growth model that you have mentioned in your book?
Among the problems I discuss are cronyism and corruption at the apex, electoral volatility and demagoguery in a number of Indian states, dysfunctional cities in which the solution to public problems are essentially privatised, the Naxalite phenomenon and farmer suicides. A longer term political problem in the making - it is still not obvious how this will play itself out - is a shift in power within India to the wealthier states of western and southern India; over the medium term, this will pitch the power of numbers that favour the Hindi heartland against the power of resources and talent that favours southern and western states.
How dangerous has the "partnership" between the government and Indian businesses become? How subversive is it?
The partnership between the state and business is not so much "dangerous" - such an alliance is at the heart of economic success of East Asia too - as it threatens the possibility of inclusive growth within the scope of a well functioning democracy. Since the Indian state is relatively incompetent and Indian business not all that public minded, the inclusive component of inclusive growth tends to get neglected in India. Power also tends to have increasing returns; those who become more powerful, say, Indian business groups, are likely to tilt the future political process in their own favour. If that comes to pass, who will push for inclusive growth? If growth in India is not inclusive, who would like to deal with the social and political consequences? These are the real dangers.
Why do you say that successive governments in India (over the past few decades) have pursued welfare policies only 'half-heartedly'?
Besides MGNREGA, there are very few real welfare policies being pursued in India on a significant scale. Oh, you can go to a district office and they will have two dozen schemes to benefit this or that group on paper. Some of these are helpful but, on the whole, India does very poorly on delivering health, or unemployment benefits, or pensions, or poverty relief. As to MGNREGA, as you know well, there is considerable opposition to it even within the government (planning commission, finance, etc). While the scheme is impressive and full of promise, implementation has been half-hearted. If the government was really serious about implementing such poverty implementation schemes seriously, it would be focused on how to improve capacity of local governments to deliver such programmes. Of course, these are difficult problems, but there seems to be very little effort to even move towards effective implementation. That is why I say that efforts towards inclusion have been half-hearted.
UPA came under sharp criticism for yielding to the Left in its first avatar (2004-2009) and then for continuing with 'pro-Left' policies even after the Left pulled out of the government. Was this just posturing on the part of the ruling coalition? Is there really a conspiracy of silence in implementing pro-poor initiatives?
That the first UPA government was really Left-leaning is somewhat of a joke. Recall that when the election results came out in 2004 the stock market took a dive, believing that Congress will have to depend on CPM to form a government. (Congress president) Sonia (Gandhi) then quickly announced that the economic team will include Montek (Singh Ahluwalia), P Chidambaram and Manmohan Singh. The stock market quickly recovered. With that economic team in place, the possibility that economic policies in India will tilt to the Left was virtually negligible. It is a myth that the first UPA government was all that on the Left.
Why is it that despite enormous poverty and inequality, India doesn't face more class revolts? Many social cleavages don't become politicised. Are you surprised?
This is an important question. The absence of class conflict in India surprises me in the abstract but not as a serious student of Indian politics; I have studied the subject long enough to know that conflict in India does not readily precipitate along class lines. Caste, regional, and religious identities often trump class identities in India; Mayawatis and the DMKs of India take the steam out of any cohesive lower class challenge. This is not unique to India, however; even in the USA, poor blacks and poor whites seldom cooperate politically. At the same time, it is important to not underestimate class anger in India. The Maoists are an example of rebellion of the poor. There are efforts underway to organise those working in the "informal economy". Organised labour, though relatively weak, is still a force. While none of these threaten the power of the privileged in India, latent class anger exists; even the servant woman in my family home in Lucknow complains : "Of course there are regular electricity failures; all of you sahib log use so many air conditioners all the time."
Which country is more comparable to post-liberalisation India?
I am not sure if it is easy to identify a country that resembles post-liberalisation India. Certainly not China, which shares India's experience of high growth and growing inequalities, but which outdoes India very seriously on early poverty alleviation, and on almost all measures of public goods provision, not to mention its authoritarian and brittle state. Certainly not countries in Africa or the Middle East. Amartya Sen recently compared India to Bangladesh and noted that the latter was doing better than India on many dimensions of human development. While much of Latin America is richer than India, and hence has far fewer poor people, there are certain trends in India - growing alliance of political and economic elite; growing inequalities; hamstrung governments, who make electoral promises but are unable to follow through; social malaise - which make post-liberalisation India appear to move in a Latin American direction. Still, such comparisons are of limited value.
Do you think Prime Minister Manmohan Singh is intellectually dishonest by clinging on in a corrupt government? Are you disappointed?
I do not have strong views on Manmohan Singh. As I noted above, my book is less about individuals and more about trends and patterns. I know that is boring for journalists but where I come from, boring is good. If I have a disappointment it is with the Congress party: why can't they come up with a Prime Minister who has an independent political base?
Recently, Dani Rodrik said that the rapid emerging market catch-up growth "will prove the exception rather than the rule in the decades ahead". What do you think?
It is hard to peer into the future. India's growth upsurge came as a surprise to everyone, including to Indian decision makers. Whether China and India will continue to grow rapidly in the future, or if there will be more Chinas and Indias in unexpected places (Pakistan? Egypt? Nigeria? South Africa?), are issues on which intelligent people can disagree. I do not have any special clairvoyance on such issues, except to note that Dani is often right and I am often in agreement with him.
What are you currently working on?
I am now working on a book on 'informal empires', which will mainly be a book on how the United States wields influence on parts of the developing world and the impact of such influence on patterns of development in these regions/countries.
Has your politics changed dramatically since Democracy and Discontent (1991)?
I do not think my politics has changed all that dramatically. I did blame state intervention for a variety of problems in 'Democracy and Discontent', but I also argued in that book that the problem was not state intervention per se, but the wrong type of state intervention. Before 'Democracy and Discontent' I wrote 'State and Poverty in India', where I worried about failure of poverty alleviation in India. My politics have thus always been social democratic, though scholarly foci have shifted. With changing foci the emphasis of analysis shifts a little more in one direction here and a little more in another direction there.
What prompted you to write this book on growing inequalities and growth in India? Does Mukesh Ambani's mansion amid Mumbai's slums reflect the message in your book?
I wrote the book because it needed to be written and I was in a good position to write it. It needed to be written because India's growth acceleration is admirable and requires understanding. Conventional understanding attributes this shift to liberalisation in 1991. At minimum, this view needed to be qualified, if not corrected. Champions of liberalisation were also too sanguine about the pattern of growth, which was creating very few jobs and leaving many behind. This too needed to be said and explained. I was in a good position to write such a book because in the past I have worked on issues of the Indian state and democracy, politics of economic growth, on problems of poverty and redistribution, and on regional diversities across India. In the present book I bring all these themes together. As to the Ambani mansion amid slums, I suppose, yes, that does symbolise the message of the book (as does the book cover), but please note that the book is a serious scholarly study that stays away from throwing stones at individuals or at specific personalities; it is about general patterns.
Can you name a few incidents that highlight the "new political problems" of India's growth model that you have mentioned in your book?
Among the problems I discuss are cronyism and corruption at the apex, electoral volatility and demagoguery in a number of Indian states, dysfunctional cities in which the solution to public problems are essentially privatised, the Naxalite phenomenon and farmer suicides. A longer term political problem in the making - it is still not obvious how this will play itself out - is a shift in power within India to the wealthier states of western and southern India; over the medium term, this will pitch the power of numbers that favour the Hindi heartland against the power of resources and talent that favours southern and western states.
How dangerous has the "partnership" between the government and Indian businesses become? How subversive is it?
The partnership between the state and business is not so much "dangerous" - such an alliance is at the heart of economic success of East Asia too - as it threatens the possibility of inclusive growth within the scope of a well functioning democracy. Since the Indian state is relatively incompetent and Indian business not all that public minded, the inclusive component of inclusive growth tends to get neglected in India. Power also tends to have increasing returns; those who become more powerful, say, Indian business groups, are likely to tilt the future political process in their own favour. If that comes to pass, who will push for inclusive growth? If growth in India is not inclusive, who would like to deal with the social and political consequences? These are the real dangers.
Why do you say that successive governments in India (over the past few decades) have pursued welfare policies only 'half-heartedly'?
Besides MGNREGA, there are very few real welfare policies being pursued in India on a significant scale. Oh, you can go to a district office and they will have two dozen schemes to benefit this or that group on paper. Some of these are helpful but, on the whole, India does very poorly on delivering health, or unemployment benefits, or pensions, or poverty relief. As to MGNREGA, as you know well, there is considerable opposition to it even within the government (planning commission, finance, etc). While the scheme is impressive and full of promise, implementation has been half-hearted. If the government was really serious about implementing such poverty implementation schemes seriously, it would be focused on how to improve capacity of local governments to deliver such programmes. Of course, these are difficult problems, but there seems to be very little effort to even move towards effective implementation. That is why I say that efforts towards inclusion have been half-hearted.
UPA came under sharp criticism for yielding to the Left in its first avatar (2004-2009) and then for continuing with 'pro-Left' policies even after the Left pulled out of the government. Was this just posturing on the part of the ruling coalition? Is there really a conspiracy of silence in implementing pro-poor initiatives?
That the first UPA government was really Left-leaning is somewhat of a joke. Recall that when the election results came out in 2004 the stock market took a dive, believing that Congress will have to depend on CPM to form a government. (Congress president) Sonia (Gandhi) then quickly announced that the economic team will include Montek (Singh Ahluwalia), P Chidambaram and Manmohan Singh. The stock market quickly recovered. With that economic team in place, the possibility that economic policies in India will tilt to the Left was virtually negligible. It is a myth that the first UPA government was all that on the Left.
Why is it that despite enormous poverty and inequality, India doesn't face more class revolts? Many social cleavages don't become politicised. Are you surprised?
This is an important question. The absence of class conflict in India surprises me in the abstract but not as a serious student of Indian politics; I have studied the subject long enough to know that conflict in India does not readily precipitate along class lines. Caste, regional, and religious identities often trump class identities in India; Mayawatis and the DMKs of India take the steam out of any cohesive lower class challenge. This is not unique to India, however; even in the USA, poor blacks and poor whites seldom cooperate politically. At the same time, it is important to not underestimate class anger in India. The Maoists are an example of rebellion of the poor. There are efforts underway to organise those working in the "informal economy". Organised labour, though relatively weak, is still a force. While none of these threaten the power of the privileged in India, latent class anger exists; even the servant woman in my family home in Lucknow complains : "Of course there are regular electricity failures; all of you sahib log use so many air conditioners all the time."
Which country is more comparable to post-liberalisation India?
I am not sure if it is easy to identify a country that resembles post-liberalisation India. Certainly not China, which shares India's experience of high growth and growing inequalities, but which outdoes India very seriously on early poverty alleviation, and on almost all measures of public goods provision, not to mention its authoritarian and brittle state. Certainly not countries in Africa or the Middle East. Amartya Sen recently compared India to Bangladesh and noted that the latter was doing better than India on many dimensions of human development. While much of Latin America is richer than India, and hence has far fewer poor people, there are certain trends in India - growing alliance of political and economic elite; growing inequalities; hamstrung governments, who make electoral promises but are unable to follow through; social malaise - which make post-liberalisation India appear to move in a Latin American direction. Still, such comparisons are of limited value.
Do you think Prime Minister Manmohan Singh is intellectually dishonest by clinging on in a corrupt government? Are you disappointed?
I do not have strong views on Manmohan Singh. As I noted above, my book is less about individuals and more about trends and patterns. I know that is boring for journalists but where I come from, boring is good. If I have a disappointment it is with the Congress party: why can't they come up with a Prime Minister who has an independent political base?
Recently, Dani Rodrik said that the rapid emerging market catch-up growth "will prove the exception rather than the rule in the decades ahead". What do you think?
It is hard to peer into the future. India's growth upsurge came as a surprise to everyone, including to Indian decision makers. Whether China and India will continue to grow rapidly in the future, or if there will be more Chinas and Indias in unexpected places (Pakistan? Egypt? Nigeria? South Africa?), are issues on which intelligent people can disagree. I do not have any special clairvoyance on such issues, except to note that Dani is often right and I am often in agreement with him.
What are you currently working on?
I am now working on a book on 'informal empires', which will mainly be a book on how the United States wields influence on parts of the developing world and the impact of such influence on patterns of development in these regions/countries.
Has your politics changed dramatically since Democracy and Discontent (1991)?
I do not think my politics has changed all that dramatically. I did blame state intervention for a variety of problems in 'Democracy and Discontent', but I also argued in that book that the problem was not state intervention per se, but the wrong type of state intervention. Before 'Democracy and Discontent' I wrote 'State and Poverty in India', where I worried about failure of poverty alleviation in India. My politics have thus always been social democratic, though scholarly foci have shifted. With changing foci the emphasis of analysis shifts a little more in one direction here and a little more in another direction there.
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