Where is India Headed in the 21 st Century?

Conference by H.E. Mr. Deepak Bhojwani, Ambassador of India
at the University of Los Andes, Merida – Venezuela
27 th June 2006

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To postulate India 's march into the 21 st century, it may help to go back from the point of reference of 0 AD, to 21 st century BC when, in that land, schools of thought and a civilization was in process of formation. A civilization which created many of the strengths that today hold that nation together and impel it forward.

2. India has gone through tectonic upheavals socially, politically, economically, linguistically, and even in civilizational terms. It could be said that India in the 21 st century lives in many different dimensions and has many forms: from the ancient city of Varanasi to the software parks of Bangalore .

3. While India's foundations were laid millennia ago, there is no denying that the 20 th century, particularly the second half after Independence in 1947, brought significant influence to bear, which determined the direction and the velocity of India's progress in the 21 st century.

4. Soon after Independence , the government of the Congress party, which largely personified the Independence struggle, sought to ensure equitable economic development within the democratic context. This led to a policy of planned development through 5-year plans, a process that continues today. Lack of experience and an idealist mindset, however, made it difficult for the economic managers then to fully utilize India 's resources and talents to ensure its sustained progress.

5. A largely agricultural economy was forced into planned industrialization, directed by the State, while rural development through community development programmes and national extension schemes, all officially sponsored and run by a bureaucracy poorly paid and increasingly less motivated, struggled to feed a growing population.

6. To complicate matters further, India 's social fabric was extremely fragile, with caste distinctions, religious and ethnic tensions, and a variety of regional influences which forced the reorganization of the federation into States based on language to a great extent. We also must remember that the Indian federation took its inspiration from, and relied on the experience of, Great Britain , with a far more unitary structure. This created complications, given differences in territory and population.

7. Soon after Independence , the Indian Republic had to integrate over 500 princely states, which had known only a feudal order, apart from large provinces with different language, background and character – from Punjab in the north to Tamil Nadu in the south, Gujarat in the west to Bengal in the east. To these were added the conflict in Jammu & Kashmir, and the extremely complicated integration of the States of the North-East.

8. The principle of democracy, which has always served India well, prevailed over seemingly unsurmountable obstacles and we can say with justifiable price that the nation State prevailed over centrifugal and fissiparous tendencies.

9. It is no wonder that the slogan of the Department of Tourism today is “Incredible India”.

10. Economically, however, matters were not so simple. The desire for equity, based on the highest ideals of the freedom fighters who included the first Prime Minister of India, Jawaharlal Nehru, born into an aristocratic family, which had sacrificed all to create the nation, led to the creation of what was referred to as the “ Socialist State ”. We must be careful in defining India , which has today created a very dynamic edifice of public sector competence in industry, banking, public distribution, energy, science and technology, etc. These were the fruits of the endeavours to establish a more just social and economic order. Certain steps, however, such as industrial licensing, which determined allocation of resources through a flawed licensing procedure; outrageously high tax burden which amounted to 97% for the highest slab upto 1974, descending to 30% only in the 1990s; bureaucratic inefficiency and corruption, could have been responsible for what was referred to as the “Hindu rate of growth” of approximately 3% for decades.

11. Onerous taxation and tight economic policies depressed development of industry and hampered export growth, even as a dedicated mass of scientists, technicians, and public functionaries managed to establish an incredible infrastructure in areas as diverse as atomic energy, space, biotechnology, accomplished the white (dairy) and green (cereal) revolutions, and a host of other achievements. The inevitable process of globalization exposed India 's vulnerabilities, which were compounded by fundamental political changes, particularly the loss of political domination by the Congress party and the advent of coalition politics. By 1991, the country was on the verge of bankruptcy and was forced to devalue its currency severely as well as to introduce a series of economic policies – referred to as reforms – to open up the economy for domestic and foreign private sector, and loosen up several controls. In many ways, this reform process turned out to be a blessing and the suppressed dynamism of the Indian genius surfaced rapidly, resulting in a sustained growth rate of over 6% of the GDP over the last 10 years.

12. Today, the Indian Rupee is floating almost free, and has, over the past 3 years, actually appreciated about 5% against the US Dollar. The stock markets are booming and foreign investment is climbing. A country almost bankrupt in 1991 today boasts of US$160 billion in foreign exchange reserves. Several Indian business houses have turned multi-national, and are present all over the world. The largest steel manufacturer in the world is an Indian, and several Indian companies are in the top 100 worldwide. Although poverty is far from abolished, programmes such as the 100-days employment guarantee scheme, launched this year, will make a difference. The government has also had to maintain subsidies for essential commodities for the poor, despite pressures to the contrary. The most important efforts towards reduction of poverty, however, will be in faster economic growth through job-creating enterprises such as services utilizing information technology.

13. Another achievement has been the liberation of the Indian economy from indebtedness and the re-course to international financial institutions. Today India is a net creditor of the International Monetary Fund and in future will be playing a more active role in the international financial arena.

14. The question is: where is India heading in the 21 st century?

15. I must admit those of you who have studied India from Venezuela could answer the question as well as I could, although we could all agree on certain common parameters.

16. Democracy can be expected to remain the defining characteristic of the Indian nation. The failure of politicians to consolidate a two party system could be a natural outcome of the nation-building process, as regional parties assert themselves. Forces which were latent in centralized political parties and governments now express themselves through movements and institutions that only a self-confident democracy can afford to sustain. A strong constitutional framework, guaranteeing an independent and pro-active judiciary, will ensure that narrow and parochial political interests do not hold back progress.

17. Social progress is inevitable despite the seemingly calamitous state of so many regions of India , which the media never hesitates to focus on. Here, too, the democratic framework permits a free flow of ideas, and even conflict, which sometimes tragically overflows into the realm of violence and civil strife, although the most severely affected regions and communities eventually revert to the rule of law and order and co-existence. Of particular interest will be the national programs of positive discrimination for members of hitherto backward castes, such as reservations in government jobs, education, etc. Also interesting will be the role of NGOs in the areas of environment, women's rights and several other issues of daily concern. Extremist religious forces will also have to give in to more progressive social trends with increasing urbanization, open media and inter-marriage.

18. Consciousness of fundamental rights and the need to resist the ever present evils of corruption, nepotism and other afflictions will continue to increase. The media in India is perhaps one of the most powerful and independent in the world. True, it frequently appears very opinionated, but continuously serves as a watchdog over citizens' rights. The prevalence of at least half a dozen newspapers and several TV channels with national reach ensures equilibrium in the projection of views.

19. The political structure will continue to fascinate analysts and political observes even as we see shifting alliances between regional and national parties. It is a tribute to India 's quest for its destiny that today the Communist Party of India has been re-elected to two States, far apart geographically and ethnically. The Indian Parliament is, more or less, an accurate reflection of the composition of the nation, and will continue to be so. Regional governments, however, may gain more autonomy as the economy expands and the government is forced to decentralize. .

20. India has been described as an Emerging Giant in the world. It is certainly a giant, and is certainly emerging into the consciousness of the world at large. India has begun to engage the world economically, and has become more accessible socially. This process can be expected to continue given the following factors:

(1) The colonial experience, which has left India with the experience of an international language – English.

(2) A massive Indian diaspora of around 20 million ranging from first generation migrants in the USA, South America and continental Europe, to third generation migrants in Africa, UK and elsewhere, to fifth or sixth generation migrants in South-East Asia, Caribbean and South Africa, etc.

(3) A young and dynamic population, with over 500 million under 25 years of age, and over 300 million classified as middle class, eager to reach out and exchange ideas, experience and wealth.

(4)Increase in use and accessibility of high technology, not just in the sector of software but also in Bio Technology, energy and other areas.

(5) The tradition of spirituality which has held India together, and which today manifests itself worldwide and is the source of fascination for the world at large. This tradition has resulted in the establishment of a network of centres of spirituality and yoga abroad, a set up by visitors to traditional centres and modern, such as the Ashram of Sai Baba in India .

21. India 's foreign policy has been consistent and the principles that guided it 50 years ago, such as Non-Alignment and international democracy continue to be valid. India will, therefore, never give up its commitment to the South, nor its opposition to domination by the established powers. Hampered over the past half century by problems in the neighbourhood, India has taken effective steps to rise above petty quarrels and, in the 21 st century, will pursue a far more harmonious and constructive policy with its neighbours. With China it has already established an extremely fruitful relationship with bilateral trade this year, expected to cross US$15 billion. Pacification of the regional environment and normalization of political, economic and social interaction in South Asia will enable India in the 21 st century to enhance interaction with the rest of the world.

22. While in several countries with traditional contacts, cultural and economic links are very strong, as in the case of USA , UK , Malaysia and South Africa , the 21 st century, I sincerely believe, will be witness to India 's adventure in hitherto less explored regions such as Latin America .

23. Already, universities in India and in Latin America are preparing to meet the social and economic demands that are appearing from the rapidly increasing commercial and economic activity; increase of tourism and even migration between these two parts of the world. We can expect more extensive and intensive establishment of infrastructure through transport and travel links between India and South America , which will help transport cargo and persons; translations of each other's literature and other texts for a more intense appreciation of ideas; a far higher degree of political understanding through multilateral and bilateral contacts and, who knows, perhaps the emergence of an India-Latin Society through greater inter-marriage.

24. Latin America has seen the arrival of Indian manufacturing and services companies in the sectors of steel - Jindal, which has been selected by the Bolivian government last month to exploit the Mutun steel mines with an investment of over US$2.3 billion over 10 years; TCS, which this year will earn US$140 million through its Latin American offices; Strides, a pharmaceutical company which has factories manufacturing generic medicines in Mexico and Brazil and distribution network of that in Latin America; Reliance, which is buying and selling oil and petro-products in Latin America worth over US$1 billion every year, including in Venezuela; and several State enterprises such as Ircon in the railways sector, and ONGC in oil and gas sector.

25. India has already taken steps in anticipation of this coming reality and it expects the same from its Latin American partners. With the consolidation of relations with countries such as Venezuela , Brazil , and others, we have reason to believe that this reciprocal process will lay the foundation for a new paradigm.

26. It would be impossible to go into further detail within the constraints of time at our disposal. We could, however, take satisfaction from the fact that India remains as open to the world as it has always been. It is a tribute as much to the wisdom of that ancient civilization as to the sagacity of those in Venezuela and elsewhere, who have surmounted linguistic and cultural barriers to investigate its idiosyncrasies in order that we can come closer and make this world a better place.

27. I should like to take this opportunity to convey my humble appreciation to the University of Los Andes and, in particular, the dedicated group of academicians and individuals who will steer the Catedra Libre in this noble institution, which will increasingly define the ideal we have set for ourselves and continue realizing it in the process.

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