The Hindu Business Line : Governance the key issue

Mahatma Gandhi would have fallen into the last category. His economic model was simple - the village as a self-sufficient unit. There would be no need for inter-village trade or markets except for the very essentials. Gandhi believed in existence with the minimum of wants. The village would produce its own food and energy, spin cloth and build houses with local materials. No risk of economic, business or technology cycles, no booms or busts in the village economy.

We are, of course, as far away from Gandhism as we can be. His most ardent follower, Jawaharlal Nehru, was also the biggest disbeliever of Gandhian economics. But Nehruvian socialism was not the answer either. Rajaji foresaw that it would end in the permit-licence-quota raj. That is exactly what happened.

The scene today is as different as chalk is from cheese. The accent is on "integration". Not just in an economic sense - goods prices in the domestic market should be no different from world prices - but in totality.

Hence, Coke and Pepsi, Starbucks (not realising that South Indian filter coffee is the best in the world), Lay chips, Gucci shoes and Sheraton hotels.

Not that these things matter much. They can be dismissed as the yearnings of a typical consumer society.

The "globalisers" lay much emphasis on foreign investment, not understanding that we do not have a resource gap as far as industry and business are concerned. The top Indian companies are cash-rich or can easily tap financial markets abroad for funds. Know-how and technology transfer are different propositions and if India is an attractive location - if it is not, we must make it so - they could come here under complete foreign ownership.

Our biggest problems seem to lie in governance and institutions. That darling of reformers, disinvestment, is embroiled in scandal involving past cases of privatisation. Most of the funds earmarked and spent on infrastructure - physical and social - go for establishment and into private pockets. There are few cases of quality assets being created or significant improvements in human development indices.

One wishes the globalisers and reformers ask our Government to first emulate the best governance models in the world and lift our primary education, shelter and healthcare standards to levels consistent with minimum human dignity and rights before chanting the oxymoronic mantra of open doors to foreign investment.

At some point, one hopes they realise that the real issues before us are different.

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