If India makes poor use of its talent pool, its growth prospects are dimmed, warns Anirudh Krishna, Edgar T Thompson Professor of Public Policy and Professor of Political Science at Duke University, US.

Krishna, who visited the Madras Institute of Development Studies recently for the launch of his book The Broken Ladder: The Paradox and the Potential of India’s One Billion , says the book “is the examination of the contradictions we see all around in India.”

Explaining the paradox

In an interaction with BusinessLine , he said: “What explains the spectacular GDP growth, and at the same time the existence of almost two-thirds of Indians under the $2 poverty line: that’s what the book sets out to explain.”

About his motivation to write the book, Krishna says, “After serving in the IAS for 14 years, I became a full-time academic researcher. I spend several months each year living in villages in different parts of India, and in slums. It’s the human stories from these places that form the bulk of the book. These stories are backed up by research.”

Five factors explain the paradox between growing wealth and persistent poverty, he notes. The first is the urban-rural gap in education, healthcare and other factors, which has worsened over 20 years. “Half of Indians live in villages, where chances of talented children coming up are stunted because of the undersupply of preparation, due to lack of achievement in the past and a steady erosion of the resource base,” he points out.

Most rural families send at least one member to urban centres to supplement the family income. “But due to poor quality education in villages, these youngsters are unable to tap the opportunities in cities.”

The second factor relates to changes in technology and production processes. Given these rapid changes, people from rural India, with their skill sets, are unable to get high-paying city jobs.

The downward spiral

The third factor is “the high degree of vulnerability in downward mobility that lots of Indians experience.” Krishna says 3-5 per cent of people fall into poverty every year in India “because their lives are very precarious and risk-prone” as almost 90 per cent work in the informal sector, with no job security or social-security benefits. In an earlier book, Krishna showed that up to a third of the currently poor people were not born poor, but have become poor.

The poor quality of grassroot governance is the fourth factor that accentuates the urban-rural divide.

“For 95 per cent of the people, interaction with the government happens with low-ranking officials, who have over the years become so demotivated, they blindly implement policies handed down to them,” says Krishna. The challenge, he adds, is to add meaning and prospects for creativity to the jobs of grassroot-level bureaucrats to turn them into a higher performing force.

The fifth factor, says Krishna, relates to the attitudes, beliefs and values that hold people down, such as caste and gender inequalities.

The ‘real’ India

“India is being cleaved into the ‘dollar economy’ and the ‘rupee economy’. The dollar economy serves urban professionals and business people, based in big cities, who make up just 5 per cent of India but believe that theirs is the real India. The rest are from the rupee economy, and there is very little movement of people from the rupee economy to the dollar one. That ladder is broken, which the book title points to.

“I don’t think there are any magical solutions to these problems,” says Krishna. “But the capacity to continually deliver solutions needs to be created.”

In India, he notes, ‘space-age wealth’ co-exists with ‘stone-age poverty’. Along with solving 19th-century problems such as building toilets and housing, India also has to grapple with 21st-century challenges such as investing in space research and biotech hubs. India, he points out, is at once a rich country solving rich-country problems, and also a poor country solving poor-country problems.

There are no standardised solutions to these problems, but empowering decision-makers at the grassroot level will help. The ladder that connects the ‘stone-age’ and the ‘space-age’ parts of the economy needs to be fixed if India is serious about harnessing its talent pool, says Krishna.

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