Tough Choices & Hard Decisions: Rebuilding India – The Next 25 Years
Prof. Rajendra Pratap Gupta, a public policy analyst and author of three best sellers, has come up with his new book discussing the ways to rebuild India in face of turmoil in the economy and employment owing to COVID-19 pandemic. In an interview done by Pradeep Baisakh, Gupta discusses various aspects of his book titled, ‘Tough Choices & Hard Decisions: Rebuilding India – The Next 25 Years.
Q: Your book starts with a quote on making a “Self-Reliant” India. Prime Minister Modi announced his vision of making India Self-Reliant while announcing the Rs 20 lakh crore package on May 12. Do you think that your book influenced PM’s new economic vision or you would call it a coincidence?
It could be either, but, yes, I did send the book to the hon’ble Prime Minister.
Many of the ideas discussed in my book on exponential growth, MSMEs, strategic PSUs, herbal farming, logistics, etc. all find a place in the recently announced Economic Package. The Finance Minister also talked about several points I mentioned in the book. Also, the book was written with that intent. I am happy if it served the purpose.
Q: COVID-19 has inflicted unseen misery on people, and the lockdown has resulted in an unexpected slump of the global economy. The current time is marked by grief and demoralisation. But you have started your book with an optimistic note— “It’s a new dawn for a new world”! Can you explain the reasons for your optimism?
COVID is not an ordinary crisis; we have still not gauged what this crisis means for humanity and our country. But as I write in the book ‘Greater the crisis, better the opportunity to transform.’ From that perspective, it is a new dawn for a new world post-COVID. In some ways, India is back to 1947. So, now, it depends on how we utilise this opportunity.
Q: The main challenge for the economy now is its revival. Do you think adequate measures have been taken by the government under the recently announced Rs 20 lakh crore package to make the country self-reliant? Do you have any major suggestions?
There are two aspects to addressing the crisis. That’s where my suggestions on Tough Choices & Hard Decisions.
On one side, we need to address the ‘urgent,’ i.e., which is short-term, which is the migrant crisis, the crash landing of the economy, business closures, job losses, and for that, we will need a stimulus.
On the other side, we have to address the ‘Important,’ i.e., long-term issues, which include moving to the new economic model, investing in science and technology, fundamentals, research, innovation and development, investment in health, education and infrastructure, and most importantly, innovatively financing growth. There is a lot of noise about the stimulus, but, equally, we need a new system, besides the economic stimulus. I have not analysed the stimulus as it is coming in tranches, so I cannot comment on that.
Q: You prefer economic development to economic growth. Can you please explain it?
Economic growth is only monetary, and economic development is a broader term that includes social indicators. Without economic development, we may increase our GDP, but we will definitely increase the divide and disparities. That’s where I recommend replacing GDP as an indicator with the Health Index.
Q: You are similarly leading the readers to a different contour altogether challenging the traditional ways we understand things, e.g., your discussions on globalisation or glocalisation, GDP or GDP per capita, investment deficit or fiscal deficit, etc. What’s the rationale behind these new terminologies?
We have to keep in mind that India is a vast country with 1335 million people, and 65 per cent are below 35 years of age. Also, we are in the middle rung of the Lower-Middle-Income Country (LMIC) as per World Bank classification. If we have to become a middle-income country, we cannot continue with the same policy and programmes. Rating agencies like the Moody’s and the Standard and Poor of the developed world should suffocate our growth by threatening to downgrade our ratings. I am fine with fiscal deficit, but not with investment deficit. We need massive investments and so, we need to change our thinking, our economic model, and our growth indicators to reflect the aspirations of this nation. Current indices don’t do justice or give a direction for a bright future. We need to rework the entire thing and go back to the drawing board.
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Q: You are suggesting that India needs to grow at 16 per cent. What is the basis?
I analysed the data. If we need to move from the current status of being a LMIC country to a middle-income country in the next five years, and then become a developed country, India will need to grow annually at 15.81 per cent for the next 25 years.
Also, I analysed that for every percent growth in GDP, we create 7.5 lakh jobs, so if we need to create 1 million jobs per month, we need to grow at 16 percent per year.
So, for India, growing less than 16 percent per year is a Hobson’s choice. We have no alternative.
Q: Can India grow 16 per cent per year, given the fact that our GDP has been trailing at 4–5 per cent over the past two years, and now we are projected to grow at zero percent due to COVID?
Ans: Yes, we can grow at 16 percent per year. I have discussed the detailed way forward in my book.
Q: How confident are you that India can achieve what you have written, and what are the fundamental structural changes you feel must ensure that the vision is achieved.
Critical structural changes include reforming the judiciary and bureaucracy. Else, we will keep taking one step forward and three steps backwards. Also, technology has to be used extensively and productively. We have to become objective and be result driven at every level and become ruthless to non-performers. We need a massive cultural and mindset change.