India’s Big Government

by Vivek Kaul

  In fact, we had seen something similar in the cash-transfer programmes which replaced the public distribution system for the right to food security in Chandigarh and Puducherry. Hence, the rentiers whose rents are reduced because a better system of delivery is introduced are likely to project it in a bad light. This remains the biggest obstacle to any reform that seeks to challenge the status quo of Big Government.

  Also, the question is: How many parallel systems can be created ignoring the existing government which is in place? Furthermore, when the local governments are ignored and their rents come down, there are likely to be political implications. Will politicians and political parties be willing to face the same?

  There are other challenges with using technological interventions which need to be handled with care in order to ensure that the rentiers do not win. In the state of Jharkhand, for example, banks employ banking correspondents so as to ensure that the MGNREGS beneficiaries don’t have to queue up at the bank. In order to make payments to beneficiaries, the banking correspondents essentially authenticate identity through biometric smart-cards. For biometric authentication, the Internet is needed. But an Internet signal is often not available in rural areas, which are at a distance from the block headquarters.912

  There are also cases in which the beneficiaries are not able to establish their identity because of weathered fingerprints or an improper capturing of fingerprints at the time of enrolment in the biometric system. In these cases, the beneficiaries have to go to the bank branch to get what is due to them. Banks only entertain those beneficiaries who have a written confirmation from a banking correspondent about their inability to withdraw money using biometrics. This takes away the option of the MGNREGS beneficiaries going to the branch directly and withdrawing their own payments. This becomes important if the banking correspondent does not visit the villages often enough or is dishonest.913

  Furthermore, there are also issues of bank account numbers or post office numbers having been entered incorrectly. If they are not entered correctly, payments fail, and the mechanism to right these issues is not so straightforward.914

  The point is that any transfer of money electronically will have its own set of challenges. And every challenge that is faced will be used by those who benefit from the existing system to project it as the better one.

  xx This is one of the ironic tragedies of the best social science research carried out in India. It is either carried out by foreigners or by Indians employed in foreign universities or institutions. Hence, the figure is in dollars.

  xxi Using the Consumer Price Index for agricultural labourers.

  14.CONCLUSION: OF GRAY RHINOS, AND NOT BLACK SWANS

  Yes, there were times [when] I was guided by Manmohan and other economists…. There were also times [when] I had to push Manmohan and others. I had to tell them: ‘I will take the political responsibility. You go ahead.’

  – PV NARASIMHA RAO915

  In 2007, a book written by Nassim Nicholas Taleb took the world by storm. The book was titled The Black Swan—The Impact of the Highly Improbable.

  The term ‘black swan’ was coined by the 19th century English economist John Stuart Mill. Taleb’s book brought it back into the public limelight. It has often been used in the aftermath of the financial crisis which broke out in mid-September 2008, with Lehman Brothers, the fourth largest investment bank on Wall Street, going bust.

  Taleb defined a black swan as follows: “Before the discovery of Australia, people in the Old World were convinced that all [emphasis original] swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence. The sighting of the first black swan might have been an interesting surprise for a few ornithologists and others extremely concerned with the colouring of birds, but that is not where the significance of the story lies. It illustrates the severe limitation to our learning from observations or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of white swans. All you need is one single (and, I am told, quite ugly) black bird.”916

  Taleb used this definition of a black swan to define a black swan event. Such an event has three characteristics: “First, it is an outlier [emphasis original], as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after [emphasis original] the fact, making it explainable and predictable.”917

  You must be wondering, dear reader, why we are suddenly talking about black swans in what is the concluding chapter of this book. The point I want to make here is that the problems facing India are not outside the realm of regular expectations (something which is essential to a black swan event), given that they are obvious and we can see them coming or are already facing them.

  Take the case of India’s ‘demographic dividend’ and the number of new workers it is throwing up into the workforce regularly. Given that there are not enough jobs going around for this lot, it is ultimately going to create problems. Or the fact that the learning outcomes of the students passing out of the Indian education system have fallen dramatically over the years. Hence, even if we are able to create jobs, the skills required to carry out those jobs might simply not be there.

  These problems are within the realms of regular expectations. They are what Michele Wucker calls gray rhinos. As she writes in The Gray Rhino: “Like its cousin, the Elephant in the Room, a Gray Rhino is something we ought to be able to see clearly by virtue of its size. You would think that something so enormous would get the attention it deserves. To the contrary, the very obviousness of these problematic pachyderms is part of what makes us so bad at responding to them. We consistently fail to recognise the obvious, and so prevent highly probable, high-impact crises: the ones that we have the power to do something about. Heads of state, CEOs of businesses and organisations, like all of us, are often worse at handling Gray Rhinos than they are at acting swiftly when an unexpected crisis arises seemingly out of the blue.”918

  This is precisely the point that I had made in the introduction to this book about countries and leaders finding it easy to act in the event of an economic crisis, like India did in 1991.

  Meanwhile, Indian leaders are busy telling the world that all is well. In fact, Finance Minister Arun Jaitley has said on a number of occasions that India has the potential of growing at 10 per cent or more.

  On one such occasion, in May 2015, he said: “The country has the potential of taking the economic growth to double digits. The government will take appropriate action in this regard.”919 If there were an award for being the master of banality, Jaitley would have won it hands down. On an earlier occasion, in April 2015, Jaitley had said in Washington: “India has the potential to make nine to ten per cent its new normal in the years to come.”920

  In the same speech, Jaitley also talked about India’s demographic dividend. He said that India was on the brink of a demographic shift. This would lead to the proportion of the working-age population between 15 and 59 years increasing to 64 per cent of the population by 2021. In 2001, this figure was at 58 per cent. Also, 6.35 crore new workers will have entered the workforce between 2011 and 2016, Jaitley said.921

  Of course, the Finance Minister was talking in general terms, like politicians do, and presented India’s demographic dividend to the American audience in a positive way. He did not bother explaining where the jobs for these new workers entering the workforce would come from, or, for that matter, that many of them are unskilled or low-skilled, or the fact that their ability to read, write and do basic maths is, at best, shaky.

  Since then, though, the Finance Minister has revised his opinions. In March 2016, he said: “In the current global environment, realistically speaking, it is extremely difficult to achieve double-digit growth.”922 Nevertheless, his misplaced optimism
still remains intact. In June 2016, Jaitley said that India’s economy was poised to grow at a much faster pace (though, to his credit, he did not say at 10 per cent or at a double-digit growth rate).923

  He also claimed that India would add $1 trillion to the economy every few years. He did not explain how few the ‘few years’ were expected to be. “It’s only a matter of a few years when we will jump from USD 2 to 3 to 5 trillion,” Jaitley said.924

  In fact, this confidence—or should I say overconfidence?—reminds me of a 2012 TV discussion between Ruchir Sharma, who was then the head of Global Macro at Morgan Stanley (and still is), and Montek Singh Ahluwalia, who was the then Deputy Chairman of the now defunct Planning Commission. The discussion was taking place on the NDTV channel, with Prannoy Roy anchoring it.

  Sharma’s first book, Breakout Nations, had just been published. The core point of the book was that economic growth cannot be taken for granted. In the long run, very few nations have grown at a pace of greater than 5 per cent per year on a consistent basis. In fact, only six countries (Malaysia, Singapore, South Korea, Taiwan, Thailand and Hong Kong) had managed this pace of growth for four decades. And only two (Taiwan and South Korea) had done so for five decades.

  This is the point that Sharma was trying to make in the discussion. He was trying to suggest that India should not take economic growth for granted. In fact, 2012 was when things had just started looking bad for India’s economy, after many years of strong growth.

  Ahluwalia, given that he was a part of the government at that time, kept insisting that India would continue to grow at a fast pace and that an economic growth of 7 per cent was a given. Things did not turn out to be like that, and pretty soon India was growing at less than 5 per cent per year, its economic growth having slowed down considerably.

  Jaitley’s confidence, like that of Ahluwalia’s, is similarly misplaced, for the simple reason that he too is taking India’s economic growth for granted. For India to grow at a rapid pace, the biggest Gray Rhino needs to be tackled. And what is that? None other than Big Government!

  ****

  In Chapter 3, we saw that the Right to Education Act has totally messed up the education scenario in India, with the learning outcomes of children falling dramatically.

  The ability to read, write and do basic maths is very important not just to live life but also to find jobs. Take the case of jobs like plumbing or being an electrician or a mason. These are jobs which are very important in the construction sector. None of these jobs can be done without basic learning outcomes being in place.

  Also, as the economist Vijay Joshi puts it in India’s Long Road: “In today’s world, primary education is not enough for employability.”925 The draft New Education Policy of 2016 makes a similar point when it states: “A large proportion of the products of the education system are found to lack employable skills.” This is primarily because learning outcomes are simply not in place.

  At the same time, if learning outcomes are indeed in place, they make life generally easier. Sometime in August 2016, I happened to be at the passport office in Mumbai. There was a young, well-dressed gentleman sitting next to me. He also happened to carry a smart phone and was wearing a pair of dark glasses. Nevertheless, he was requesting people to write an application for him by saying “Main zyada padha-likha nahi hoon” (I am not so well educated).

  The point here is that one doesn’t have to be a graduate to write an application. Given the hopelessness of the situation, I finally wrote the application for that youth. Having done that, I asked him till what standard he had studied, to which he proudly told me: “Matric kiye hain” (I have done my matriculation).

  If an individual cannot write a simple, basic application in his or her own mother tongue (in this case, Hindi) after having passed the tenth standard, there isn’t much value to his/her education. While this is just a one-off example, it shows how important it is to have some basic educational learning outcomes in place in order to be able to do the most basic things in life.

  In fact, almost all the data cited in the third chapter, which dealt with the Indian education scenario, came from the Annual Status of Education Reports (ASER), which were regularly published by the ASER Centre, an autonomous unit of the NGO Pratham, between 2005 and 2014. The point being that almost all the data cited was not from government documents.

  In late March 2016, The National Policy on Education 2016: Report of the Committee for Evolution of the New Education Policy was submitted to the government. The Committee was led by the former bureaucrat TSR Subramanian. The Committee’s findings were similar to those of ASER.

  Here are a few points that the Committee made:

  a) The quality of education in terms of learning outcomes is undeniably poor, particularly in the government school system. This is a matter of serious concern, since approximately 80 per cent of all recognised schools at the elementary stage are government-run or supported.

  As the Committee points out: “Available data indicates that, in 2014, nearly 20 per cent of the children in Class 2 did not recognise numbers from 1 to 9 and nearly 40 per cent of the children in Class 3 were unable to recognise numbers till 100. More disturbingly, these proportions have grown progressively and substantially since 2010.” (The Right to Education Act was implemented starting from April 1, 2010.)

  b) Teacher absenteeism, estimated at over 25 per cent every day, has been identified as one of the reasons for the poor quality of students’ learning outcomes. It has plagued our school system for many years. Teachers are unionised and politically influential, as a result of which there is neither political will nor administrative initiative to remedy the situation. Some states are trying to address this malaise by strict vigilance and monitoring, and the use of mobile phones and biometric attendance recording, but the situation is far from satisfactory.

  c) The National Achievement Survey identifies poor learning outcomes as the biggest challenge facing Indian education. Poor quality of learning at the primary school stage naturally spills over to the secondary stage, where the gaps get wider, and continues on to the college years, leading to very poor outcomes in the higher education sector.

  d)Children from historically disadvantaged and economically weaker sections of society and first-generation learners exhibit significantly lower learning outcomes and are more likely to fall behind and drop out of school.

  e) While the infrastructure facilities in the school system have significantly improved, there has been little corresponding impact on the quality of instruction or learning. On the contrary, repeated studies have indicated a worrisome decline in learning outcomes in schools.

  f) The perceived failure of the schools in the government system to provide education of minimal quality has triggered the entry of a large number of private or aided schools, even in the rural areas. Concurrently, there has been a mushroom growth of private colleges and universities, many of them of indifferent quality.

  g) The Committee’s experience is that, by and large, the teacher community consists of sincere persons with potential, where most teachers would perform with dedication, but a small proportion among them takes advantage of the lack of supervision and uses political contact to gain proximity to power, and thereby, exercises influence on the majority of teachers. This results in standards of discipline and pride in belonging to a noble profession giving way to apathy and the negligence of core responsibilities. Ultimately, this adversely affects the quality of teaching and learning outcomes.

  h) When children are assured of promotion to the next class regardless of their performance, they become non-serious, inattentive to studies and irregular in attendance. For many students, the mid-day meal is the only incentive to go to school. Teachers too soon lose interest in teaching such non-receptive and unmotivated students. Consequently, while the no-detention policy has certainly resulted in a significant increase in student enrolment, there has been little or no improvement in academic standards or the quality of education. />
  i) School education in India is provided mostly in small schools. Nearly 33 per cent of all schools taken together have less than 50 students and 54 per cent have less than 100. About 77 per cent of schools have less than 200 students. The proportion of small schools in the government sector is relatively higher than in the private sector. The preponderance of small schools not only affects the quality of teaching and learning, but also makes school education inequitable and expensive in terms of per pupil expenditure. Such schools are neither academically nor financially viable.

  These points are more or less similar to the points discussed in Chapter 3 on the basis of the ASER data. With the Committee making these points, it is safe to say that the government is now also aware of all that is wrong and what needs to be corrected. In fact, the Committee made some recommendations on this front.

  Here are a few recommendations that the Committee made:

  a) The RTE Act requires that even a student who scores zero in all subjects or has not attended school for even a single day be promoted to the next class. It is important to maintain the link between promotion and learning outcomes, objectively measured through criteria such as attendance, test scores or examinations at the end of every class.

  Since children who are assured of promotion to the next class regardless of their performance become non-serious, the Committee has recommended that the no-detention policy should be continued only up to Standard V and exams need to be introduced after that by suitably amending the Right to Education Act.

  The Committee has recommended the amending of the Right to Education Act to provide, in addition to infrastructure requirements, norms for learning outcomes which directly affect the quality of education. Furthermore, teachers “should be held accountable for failure to achieve learning outcomes within a prescribed time frame”.