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    Cutting the Gordian Knot: India's Quest for Prosperity
    Cutting the Gordian Knot: India's Quest for Prosperity
    Cutting the Gordian Knot: India's Quest for Prosperity
    Ebook308 pages4 hours

    Cutting the Gordian Knot: India's Quest for Prosperity

    By T N Hari and Hari Menon

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    About this ebook

    Cutting the Gordian Knot discusses India's quest for prosperity through job creation. The underlying pieces of this quest are complex and intertwined-an education system that has outlived its shelf life with misplaced aspiration for white-collared jobs. India got educated before it got skilled. Skilling along with micro-entrepreneurship needs to be rejuvenated. Rapid developments in technology are changing the nature of jobs and employment itself. We are living in truly interesting times. The country's youth bulge makes it one of the youngest nations in the world. A youthful demographic profile is necessary but not a sufficient condition for economic growth. It needs to be harnessed well. Some miscalculations and wrong moves could very easily transform a demographic dividend to a recipe for mass discontent.

    The country has a long way to go, and global disruptions due to rapidly changing technologies are creating hazards on the way. New ways will have to be found, and dominant narratives will have to be challenged. The book presents these views, data and insights with an intent to spark dialogue, awareness and, eventually, change.
    LanguageEnglish
    PublisherBloomsbury Publishing
    Release dateSep 18, 2018
    ISBN9789388038867
    Cutting the Gordian Knot: India's Quest for Prosperity

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      Book preview

      Cutting the Gordian Knot - T N Hari

      Entrepreneurship

      Introduction

      ‘Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I may end up really becoming incapable of doing it. On the contrary, if I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.’

      —Mahatma Gandhi

      Most people who buy a book often skip the introduction and jump straight to the first chapter or the one that they are most interested in. However, we believe a background would really help in setting the context. But keeping a general reader’s proclivity in mind, we’ll keep it really short.

      For the most part of our lives, we have been shielded from the dark underbelly of India. We sought comfort and we were fortunate to have it. However, at Bigbasket we were exposed to an India we were not deeply familiar with. From a purely academic perspective, we had read about this India — often called Bharat — since childhood. Intellectual awareness is never enough to appreciate a problem sufficiently. A first-hand exposure can change your perspectives, but compassion comes only after experiencing it.

      In the past, we had heard and even spoken at conferences, about India’s demographic dividend and employment woes. Frankly, our views were very simplistic and siloed. In the last few years, our work took us close to a category of the workforce that is somewhat pejoratively referred to as ‘blue-collar’, and also to small farmers. We were able to get a much better and more holistic understanding of their problems. This exposure helped us refine our views on India’s quest for job creation and prosperity.

      In the process, we met with an amazing bunch of folks. Every meeting was inspirational. We were touched to see some young and brilliant individuals who had given up bright corporate careers to work on India’s social problems. Their collective efforts are leading to the creation of more meaningful jobs and improving the quality of lives of the underprivileged.

      These meetings inspired us to put together this book. A book that touched on the different sub-themes underlying India’s quest for prosperity by leveraging its youth bulge. We realised that the best way to do this was to get people who had dedicated a significant part of their lives to understanding and working on the various pieces of this complex problem actually write large parts of it. These are individuals who had gotten their hands dirty and elbows greased by years of working in the trenches. The quote by Mahatma Gandhi at the start of this introduction aptly captures what we felt at the end of every meeting with these extraordinary individuals.

      We are grateful to them for agreeing to be a part of this book project and sharing their experiences and insights. The chapters that each of them have written are covered in the ‘List of Contributors’ section.

      We would like to thank our publisher Praveen Tiwari and the entire team at Bloomsbury, especially Shreya Chakraborti and Nitin Valecha for their steady support, sharp feedback and sound advice. We would also like to thank our editor Srotoswini Majumdar. Her edits were invaluable. Our colleague at Bigbasket, Anagha Karvir, helped us with the cover design. She brought the same creativity and passion to this as she brings to everything else at work!

      T.N. Hari

      Hari Menon

      1

      Cutting the Gordian Knot

      ‘The biggest problem in the world could have been solved when it was small.’

      —Witter Bynner (1881–1968), American Poet and Author

      Much has been written about Nehru’s speech of ‘Tryst with Destiny’ and ‘redeeming our pledge…when the world sleeps’. ‘When the world sleeps’ was obviously metaphorical since it was daytime in several parts of the world when it was midnight in India. Continuing with the metaphor, when the world woke up, they were wondering how long this idea of India would last. The events leading up to independence, especially the bitter wrangling in the last stages of the negotiations, had not inspired any confidence. The complexities were far too many to be handled by a nation that had neither the institutions nor the experience. Most of the problems that confronted the young nation seemed unsolvable. The nature and extent of internal inconsistencies and misalignment of interests pointed to an imminent anarchy and implosion. The bloody communal riots that followed in the aftermath of independence and the subsequent challenges in integrating the princely states into the nation state seemed to endorse these fears. In the years following independence, there were many near-death experiences — the disputes following the creation of states along linguistic lines, the secessionist movements in parts of the country, imposition of emergency in 1975 and the near bankruptcy in 1991. Many of India’s major problems in post-independent history have seemed too inextricably intertwined to be ever solved. From time to time, even strong institutions have been subverted and made to operate to the whims and fancies of men and women in power leading to further doubts.

      However, every crisis demonstrated India’s wisdom, resilience and an inherent ability to self-correct even if the self-correction mechanism took long to get underway. Having said this, it seems to have become a pattern that this wisdom has been demonstrated only when things came to a boil. While the idea of India as a nation seems to be well cemented today despite some very intense and visible conflicts between the different constituents that surface periodically, our ability to proactively deal with problems before they take on monstrous proportions is yet to be proven. There is no guarantee that we can always rely upon a crisis to mend our ways and there is always a real possibility that the next crisis may have further long-term debilitating effect.

      Some Initial Missteps Are Still Haunting Us

      The patriotic fervour that ignited the independence movement was redirected to achieving the twin objectives of social justice and equality after independence. The government went about laying the foundation for achieving these goals in full earnest. While no one disputes that these goals were the need of the hour, the way the government went about this by taking on activities that were best undertaken by private enterprise resulted in a long winter of slow growth.

      India had historically been a land of entrepreneurs. Whole communities have had entrepreneurship in their blood. By taking control of the ‘commanding heights’ of the economy, the government slowly but surely stifled private enterprises and made it difficult for them to do business. Private enterprise began to be viewed with suspicion. Over a period of time, ‘profit’ became a bad word. The laws relating to business began getting increasingly opaque, open to interpretation and difficult to comply with. This resulted in a license and inspector raj. The relationship between those doing business and those regulating business became adversarial. Over the years, this took deep root and became a part of the DNA of the nation. These were the lost decades when growth languished at levels disparagingly referred to as the ‘Hindu Rate of Growth’. Social objectives were not achieved either and the only beneficiaries were those who knew how to manipulate the system. Undoing the outcomes of decades of misplaced enthusiasm and pressing the reset button was not going to be easy. It needed an act of God to destroy this complex web and provide a clean slate once again. This act of God came in the form of a crisis in 1991 when the government was on the verge of bankruptcy. This crisis forced a rethink of the role of the government in economic activity. The government slowly began giving up the ‘commanding heights’ of the economy, and disinvestment was initiated.

      The current government is talking of ‘minimum government’ and is working hard to create the equivalence of customer experience for industry and citizens. The primary role of the government being to enhance the ease of doing business rather than doing business is gradually getting wider acceptance. Creating the right platforms and infrastructure (of all kinds) that enhance transparency, reduce friction and minimise leakage of benefits earmarked for social justice objectives were becoming the new norms of good governance. Thought leadership from individuals with non-government backgrounds also added to the impetus. It is gladdening to see India climb from number 142 in the World Bank’s ease of doing business to 100.

      Welfare will always be a pillar of India’s approach to development and therefore India will have to always be a welfare state. Make no mistake about it. However, misplaced concern without thoughtful policy will result in neither social equity nor growth.

      Services-led Growth Got the World to Notice Us

      Towards the end of the last century India morphed into a services economy. Many things came together, including the availability of a young and large English-speaking population, in transforming India into a services powerhouse. The transformation to a provider of outsourced services resulted in a good number of Indians experiencing global standards of living. Suddenly, India’s middle class became a large market for global marketers and India’s metamorphosis from diffidence to confidence on the international stage was evident. India’s young demographic profile, in contrast to the aging profile of the rest of the world, was the new narrative. There was terrific optimism: India was touted as the biggest market after China, second biggest free market after the US, the only country shining amidst the ruins and the aftermath of the financial crisis of 2008, the only country with a youth bulge in its demographic profile, and the potential to become the second biggest economy by 2030.

      But, India’s Youth Bulge Can Be Both a Promise and a Peril

      A friend of ours was once driving from Bengaluru to Mysuru during the Cauvery Agitation and noticed hundreds of youth on the streets with burning tires strewn all over the highway. A casual chat with some of the youth in the local language made him realise that none of them knew what the agitation was about. They were just unemployed/underemployed youth being directed by local politicos. This is being played out all over India. Unless we can rethink employment and employability holistically and quickly, the ticking time bomb would explode some day.

      Mainstream media’s portrayal of the ‘India Shining’ narrative of late has been about the combination of a youthful demographic profile and a high growth rate. At a high level, this is the right perspective, but there are several moving parts that need to be well coordinated if we are to capitalise on the opportunities. A youthful demographic profile is a necessary but not sufficient condition for economic growth. It needs to be harnessed well. Some miscalculations and wrong moves could very easily transform a demographic dividend to a recipe for mass discontent.

      To quote from the ‘CII Future of Jobs in India Report’ Part 1:

      The gap between numbers of jobs created and jobs required in India has widened despite strong GDP growth during the decade of the 2000s. Every year, 10–12 million young people join the labor force. Additionally, 2–3 million educated and unemployed workers look for jobs in the industry and services sectors, and 5 million people leave agriculture to join the non-agriculture sectors. Thus, there exists a total demand of 17–20 million jobs per annum. (Our comment: This is a staggering number and finding meaningful employment for everyone will be a massive challenge. To put the magnitude in perspective, this is more than three times the number that the entire Information Technology [IT] and outsourced services industry employs after being around for more than 25

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