by John Elliott
3. Arvind Virmani, ‘Policy Regimes, Growth and Poverty in India: Lessons of Government Failure and Entrepreneurial Success!’, October 2005, Working Paper Series, Indian Council for Research on International Economic Relations (ICRIER); this paper traces and tabulates the history of India’s economic restrictions and reforms from 1948 to 2004; http://icrier.org/pdf/WP170GrPov11.pdf He has a blog ‘Dialogue with Virmani’, http://dravirmani.blogspot.co.uk/
4. ‘30 Years of Change, and Status Quo’, Business & Economy, 16 February 2012, http://www.businessandeconomy.org/16022012/storyd.asp?sid=6746&pageno=1
5. JE, ‘Telephone Links for Commonwealth Talks’, Financial Times, 8 September 1983
6. Robert Lloyd George, North-South: An Emerging Markets Handbook, Probus Publishing, Cambridge (UK), Chicago, 1994
7. Parts of these paragraphs appeared in a report I wrote in 1995: ‘India and China – Asia’s New Giants: Stepping Stones to Prosperity’, Rajiv Gandhi Institute for Contemporary Studies, Delhi, 1995
8. Told to JE by the bureaucrat, July 2012, non-attributable
9. Montek Singh Ahluwalia in conversation with JE, June 2013; the article was headed ‘Towards a restructuring of industrial, trade & fiscal policies’, Indian Express, 11 July 1990, extracts courtesy of The Financial Express archives, 1990
10. Conversation with JE, December 2013 after the article was retrieved from The Indian Express archives
11. Policy Making for Indian Planning: Essays on contemporary issues in honour of Montek S. Ahluwalia, Foreword p. 17, Academic Foundation, New Delhi 2012, http://www.academicfoundation.com/n_detail/645.asp
12. Conversation with JE, December 2013
13. In conversation with JE, August 2013
14. In conversation with JE, June 2013
15. Shankkar Aiyar, Accidental India, A History of the Nation’s Passage Through Crisis and Change, p. 69, Aleph, Delhi 2012; the first chapter, ‘Bonfire of the Vanities’, of this book goes into some more detail on the history and politics of the reforms; http://alephbookcompany. com/accidental-india
16. Trade Policy Reforms http://tradeportalofindia.com/contentmgmt/Desktops2.html?itemcode=I212&compid=itpo
17. Conversation with JE and also recounted in detail by Ahluwalia in an essay, ‘Policies for Strong Inclusive Growth’, in An Agenda for India’s Growth: Essays in Honour of P. Chidambaram, Academic Foundation, Delhi, 2013, http://planningcommission.nic.in/aboutus/history/spe_strong1402.pdf
18. Manmohan Singh made a fulsome tribute to Chidambaram at the launch of the Festschrift in Delhi on 31 July 2013, http://pmindia.nic.in/speech-details.php?nodeid=1334
19. P. Chidambaram told the story at the launch of Accidental India (see footnote above), 23 October 2012; also see ‘Statement on Industrial Policy’, Government of India, Ministry of Industry, New Delhi, 24 July 1991, http://dipp.nic.in/English/Policies/Industrial_policy_ statement.pdf
20. JE, ‘India and China – Asia’s New Giants: Stepping Stones to Prosperity’, Rajiv Gandhi Institute for Contemporary Studies, Delhi, 1995
21. Arvind Virmani, ‘Policy Regimes, Growth and Poverty in India: Lessons of Government Failure and Entrepreneurial Success!’, October 2005, Working Paper Series, Indian Council for Research on International Economic Relations (ICRIER); this paper traces and tabulates the history of India’s economic restrictions and reforms from 1948 to 2004; http://icrier.org/pdf/WP170GrPov11.pdf He has a blog ‘Dialogue with Virmani’, http://dravirmani.blogspot.co.uk/
22. ‘The trouble with coalitions’, The Economist, 22 November 2001, http://www.economist.com/node/875011
23. http://ridingtheelephant.wordpress.com/2011/12/01/wal-mart-co-fuel-indian-political-crisis/
24. Non-attributable conversation with JE, London, June 2012
25. http://ridingtheelephant.wordpress.com/2012/08/15/has-india-abandoned-economic-debate/
26. ‘Licence raj has been replaced by land mafia raj’, interview with Raghuram Rajan, DNA, 30 October 2010, http://www.dnaindia. com/opinion/1459666/interview-licence-raj-has-been-replaced-by-land-mafi a-raj
27. ‘Report no. 6 of 2013-Union Government (Ministry of Rural Development) – Report of the Comptroller and Auditor General of India on Performance Audit of Mahatma Gandhi National Rural Employment Guarantee Scheme; http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_6/Report_6.html
28. Text of the legislation, http://www.prsindia.org/uploads/media/Food%20Security/Bill%20with%20Amendments.pdf
29. Minutes of the 24 July 2013 Meeting of the Technical Advisory Committee on Monetary Policy, http://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/IEPR370TAC0813.pdf
30. Surjit S. Bhalla, ‘Manmonia’s FSB: 3% of GDP’, Indian Express, 6 July 2013,http://www.indianexpress.com/news/manmonias-fsb-3--of-gdp/1138195/0
31. http://ridingtheelephant.wordpress.com/2013/08/28/sonia-gandhis-2bn-bid-for-political-security/
32. ‘India rejects WTO proposals on food security, trade facilitation’, The Times of India, 4 December 2013; ‘For India, food security is non-negotiable. Need of public stockholding of foodgrains to ensure food security must be respected. Dated WTO rules need to be corrected,’ Anand Sharma, commerce minister, told a WTO meeting in Bali, http://timesofi ndia.indiatimes.com/business/india-business/India-rejects-WTO-proposals-on-food-security-trade-facilitation/articleshow/26829962.cms
33. This news report lists pending reforms: ‘More reforms initiatives in next 2 to 4 months – P Chidambaram’, PTI, 24 April 2013, http://articles. economictimes.indiatimes.com/2013-04-24/news/38790562_1_ opposition-party-finance-minister-p-chidambaram-executive-actions
34. http://ridingtheelephant.wordpress.com/2009/04/01/manmohan-singh-marks-the-limits-of-liberalisation/
35. Gurcharan Das, India Unbound, p. 247, Penguin Viking, Delhi 2000
36. India’s Economic Reforms and Development: Essays for Manmohan Singh, Edited by Isher Judge Ahluwalia and IMD Little, Second Edition updated as part of Oxford India Perennial Series, OUP Delhi, 2012. Texts and videos of the evening’s event at http://icrier.org/page_book.asp?MenuId=25&SubCatID=1004
37. Adam Roberts, ‘India’s economic reforms: Now finish the job’, The Economist, 15 April 2012, http://www.economist.com/blogs/banyan/2012/04/indias-economic-reforms?fsrc=gn_ep
38. http://ridingtheelephant.wordpress.com/2012/04/19/manmohan-singhs-friends-meet-him-and-say-your-legacy-is-at-risk/
39. http://ridingtheelephant.wordpress.com/2011/07/23/india-lost-for-words-20-years-after-its-1991-reforms/
40. JE, ‘India and China – Asia’s New Giants: Stepping Stones to Prosperity’, Rajiv Gandhi Institute for Contemporary Studies, Delhi, 1995
41. The transcript of the 31 March 2009 FT interview is on http://www.ft.com/intl/cms/s/0/7f6fea0e-1bcc-11de-978e-00144feabdc0.html#axzz2XsryNahd; I wrote about it on my blog a day later, http://ridingtheelephant.wordpress.com/2009/04/01/manmohan-singh-marks-the-limits-of-liberalisation/
42. http://ridingtheelephant.wordpress.com/2013/04/10/how-we-launched-thatchers-privatisation-word-in-the-ft-in-1979/
43. Conversation with JE and also recounted in detail by Ahluwalia in ‘Policies for Strong Inclusive Growth’, in An Agenda for India’s Growth: Essays in Honour of P. Chidambaram, Academic Foundation, Delhi 2013, http://planningcommission.nic.in/aboutus/history/spe_ strong1402.pdf
44. A television interview with Ratan Tata on NDTV, 20 December 2010, www.tata.in/media/reports/inside.aspx?artid=+3/rHRSGwIE=, and ‘“Tatas unlikely to do airline business again”, says Ratan Tata’, The Hindu, 9 December 2012, http://www.thehindu.com/business/companies/tatas-unlikely-to-do-airline-business-again-says-ratan-tata/article4181223.ece
45. http://ridingtheelephant.wordpress.com/2009/02/18/india%E2%80%99s-fdi-changes-reveal-weaknesses-in-industrial-policy-making/
46. Montek S. Ahluwalia, ‘Economic Reforms in India since 1991: Has Gradualism Worked?’, Journal of Economic Perspective, March 2002, http://pla
nningcommission.nic.in/aboutus/speech/spemsa/msa008. pdf
47. Manmohan Singh at a P. Chidambaram Festschrift book launch in Delhi on 31 July 2013, http://pmindia.nic.in/speech-details.php?nodeid=1334
7
Unlocking Opportunities
The 1991 reforms had an enormous impact, opening up possibilities that had not existed for young Indians, and older ones too, to branch out into new lifestyles, entrepreneurial adventures and careers. Those already in the middle class, including women, were given job opportunities and mobility of employment that was unimaginable in the economically restricted and public sector-dominated India after independence. No longer was the security of lifetime jobs in various parts of government and the public sector the epitome of success. For many of those not yet in the middle class, there were opportunities for upward mobility to be grasped.
There are thousands of stories of children of poor parents who have suddenly done well in ways that would not have been possible earlier. Ram Lal, the son of a gardener who worked for my family and the FT office in the 1980s, is now a well-paid driver and his daughter is a qualified pharmacist in a government hospital. Dinesh Kumar, the 22-year-old son of a poor farmer on India’s border with Nepal, earns Rs 12,000 a month as a trainee with Tarun Tahiliani, one of India’s top fashion designers. He was a porter on Rs 2,500 a month in the INA market, one of Delhi’s main retail food markets, when he began to go to a nearby night school run by Ritinjali, a voluntary organization. There he did a cutting and tailoring course that led him to study graphic design at Delhi University with funds provided by Ritinjali, and he graduated in 2010.
Slim, smart and smiling, with great yet modest self-confidence, Kumar told me that the best he could have expected at the market was maybe to become a shop assistant.1 ‘Now I’m designing Western clothes and I want to go abroad and become a big designer,’ he said. He might move somewhere else in Delhi first, hoping to double his salary, but his target is Australia because that is where Amar Nath, another Ritanjili student from the same bazaar, is working as a management assistant for an electrical power company. I had interviewed Nath in July 2005, when he was 17, for Fortune magazine.2 He had never been to a conventional school and had just begun to learn to read and write. He told me he had been inspired by ‘meeting high-class people’ in the bazaar and realized that ‘speaking their English was a basic driving force’. He said he wanted to start his own hotel or restaurant and benefit from India’s growing consumerism. His horizons changed to Australia and he is regarded as a role model by those now at Ritinjali.
Life Improves Near Panipat
I went back in October 2012 to Beejna, a village near the industrial city of Panipat, two hours north of Delhi in Haryana on a new highway to see what had changed since I first went there for an FT article in 1987. That visit was to see young women weaving cotton durries for their marriage dowries, and I wrote about Darshan, a slim 18-year-old bride-to-be who was working on a horizontal wooden loom in her family’s small thatched mud-and-brick house.3 She was weaving a light brown and green 3ft by 6ft durrie that was destined for a Habitat home-furnishing store in London, where it would sell for £25–30.
The FT business peg for this rural story was Britain’s fashionable Habitat stores that were run by Terence Conran, a top furniture designer and retail entrepreneur. Conran had spotted the traditional brightly coloured dowry durries when he was taken to Panipat in 1969 by John and Bim Bissell, who ran Fabindia, a crafts-oriented shop (now a successful chain of stores) in Delhi. He thought it might become a trendy item in the UK and shipped over a container load, but in 1987 Habitat was facing a takeover bid that could end the trade and hit the Rs 45 (then £2) that Darshan and others received for three or four days’ part-time weaving.
These young women had virtually no prospects apart from marriage. ‘Between leaving school and getting married, they made the carpets because the Rajputs didn’t like unmarried girls going out into the fields,’ explained Satya Sharma, a local contractor. ‘When they became married women, they had to stay fully indoors, so often they couldn’t even do the carpets.’ Taking durries as part of the dowry was an old tradition and it still continues, though it is now more symbolic because bridegrooms and their families prefer money, motorbikes and electrical goods like refrigerators and televisions.
It was clear when I returned that life had changed dramatically since the 1980s. A seven-kilometre flyover carried a highway through the centre of Panipat that had been clogged with traffic before. In Beejna, there were paved roads, though some were flooded because of a mishandled government project. There were many motorbikes, as well as several tractors that had just begun to appear when I first visited. In the fields, there were some combine harvesters that were unheard of in the 1980s. Cylinders of natural gas had replaced cow-dung patties as fuel in homes, which were now built of concrete and normal-sized bricks instead of more traditional stones, small bricks and mud. Several large ostentatious houses had been erected by the most successful families. Large controlled-humidity tents were beginning to appear on some farms for growing vegetables such as cucumber, brinjal and red pepper. Health care had also been transformed, though, as everywhere else in India, it did not always operate efficiently. Amateur midwives had been replaced by a local clinic that had opened ten years ago, and there was now a gynaecology section with ultrasound and other facilities that had been added recently.
Young women had opportunities to study and work outside the village, while their brothers and husbands could chase jobs and careers in the cities, many created as a result of the 1991 reforms. I met Krishna, a woman in her fifties, whose two sons had successful careers. One was a manager in a cardboard-box factory in the nearby town of Karnal, while the younger one, aged 32, was a manager in Delhi at an outlet of the Café Coffee Day chain, having earlier worked with KFC. His wife lived at the small Beejna family home and was training to become an air hostess in Karnal, while he earned enough for their five-year-old twin sons to be bussed 12 km daily to a Karnal school. ‘We send the boys there so they can be educated in a more promising environment than the village,’ said Krishna. ‘It’s where Kalpana Chawla went,’ she added proudly, referring to a local hero and illustrating how aspirational Indians proudly latch on to accessible icons. (Chawla moved to America in the 1980s, became an American astronaut, and was killed in a NASA shuttle disaster in 2003.)
In a government-funded crèche attached to the village school, Krishna and two friends proudly produced mobile phones from their blouses and said everyone over the age of 16 had one. One of their husbands had a well-connected job as a court typist in Karnal, where their daughter studied in college and hoped to get a job in a bank. At the school, children were being taught under the shade of trees when we arrived. With 400 children of all ages, it was four times bigger than in the early 1980s. The pupils’ horizons had expanded from the village to Karnal’s call centres and shops, and beyond.
Clearly, prospects for the young had been transformed in these 25 years. Not everyone was successful, of course. I met a durrie weaver in Panipat who had set up his own factory but found it tough going, and both he and his wife wished he had stayed as a well-paid skilled employee. But they had consolations that would not have been possible in the 1980s – one son was running a ‘tent house’ business providing equipment for parties and the other one hoped to expand his father’s factory one day.
Despite the enormous changes, old traditions remained. Krishna’s daughter-in-law touched our feet as we walked into the house and when we left, but the daughter did not do so, showing the different status of the two young women in the husband’s home. The daughter in-law covered her head with her shawl as soon as a youngish man walked in, and removed it when he left.
Durries are now mostly made in factories, not in villages, though an elderly woman was weaving one with torn scraps of old material in Beejna, showing that the lifestyle of the very poor had changed little. Durries are also needed less because the charpoys on which t
hey were used as thin mattresses are being replaced by plastic chairs. Bharat Carpet Manufacturers, the Panipat company that handled Darshan’s durrie, has spun off another company, V-Weave, and has grown into a leading supplier to top American stores such as WestElm and Crate&Barrel. Madhukar Khera, who ran the firm in the 1980s, and his son Nikhil who is in charge now, have expanded traditional weaving skills to produce thick hand-spun wool rugs and other floor coverings. So, although the eventual takeover of Conran’s shops did change the demand, and the brides-to-be no longer needed to weave them, the craft that started with the dowries is still thriving.
I found far less progress when I returned to a desperately poor tribal village adjacent to Kanha national park in the middle of India that I had last seen ten years earlier. Here, in this rural community, with the nearest city two-and-a-half hours away, the story was one of change but little progress. A 19-year-old son in the family I knew best had a modern-looking mobile phone, though he only used it for phone calls, and I was told almost everyone had mobiles in the more prosperous villages nearby. There were telecom towers in every large village (there had been two in Beejna). Many tribal people, particularly in the 1970s, had been crudely and insensitively shunted out of their traditional homes inside national parks. Later, when there was a formal resettlement process, they were cheated and harassed by forestry and banking officials on the preparation of their land and the handling of compensation. Most of the men had become heavy drinkers of the homemade ‘mahua’ liquor.
They and the women relied on casual labour for Rs 100 or so a day, working on repairing roads or in the mushrooming tourist resorts surrounding the national park. But few locals had the entrepreneurial drive, or the funds, to start small businesses such as roadside restaurants and shops. That was being done by people who had moved in from neighbouring towns. Many of the resorts catered to the brash new rich from the cities of Jabalpur and Nagpur, 160 and 260 km away, who had little care for the environment or the tribals. The local village market however had grown enormously in the past ten years, though it was still selling old-fashioned goods like plastic shoes, ancient-looking torches and religious posters. In other better-off farming villages, the young had dreams of venturing out to work in offices and call centres in distant towns, but not here.