Written by : Umakant Sir (Ex-OAS)
Gen Z toppled governments in Nepal and Bangladesh. Many people now ask if India is next. The honest answer is no. It will not even create a dent here.
The world has a leadership problem
Try a small test. Name the top three leaders in the world whom you truly like. Most people struggle after one. That is the sad state of the world we live in. Trust in leaders is low almost everywhere. Anger is easy to find. Anger is also easy to spark.
India is different in one important way. It has enjoyed political stability for more than a decade. That is not a small thing. Without political stability, there is economic chaos. Remember the 80s and the early 90s. Governments changed often. Policy changed with them. The economy paid the price. By 1991 we had to pledge gold to stay afloat.
No investor puts money into a country that may change its rules next year. Factories need years to pay off. Capital does not wait around for the street to settle. Stability is the first thing an investor checks.
Regime change is not economic change
The protests in Bangladesh did bring regime change. But will life improve for the people of Bangladesh? Not soon, and not yet. Economic damage is quiet. It does not show up on the day of the protest. It shows up in the factory that never opened. It shows up in the investor who chose Vietnam instead. It shows up in the young graduate who still cannot find a job.
An economic dent is usually invisible. It takes decades to recover from. By the time people notice, the damage is already done.
What instability already cost us
We have paid this price before. We lost ground to China because of two decades of political instability. We lost another two decades because we opened our economy about 20 years later than China did. So in essence, China is nearly 40 years ahead of India economically.
That gap is not just a number. It is a lesson. Every year of confusion at home is a year of growth handed to someone else.
This matters more because of geography. The USA is a superpower. It was never a big bother for India. India tolerated it because India was barely touched by American hegemony. It was far away. But think about a superpower as your neighbour. Think about a neighbour you have fought wars with. Think about deep distrust on both sides. That brings perplexity and paranoia. In that situation, India cannot afford to be weak or divided at home. A slow economy is a security risk too.
A lesson from Animal Farm
George Orwell wrote Animal Farm in 1945. The story is simple. The animals on Manor Farm are tired of Mr. Jones, the careless farmer. They rise up and drive him out. The mood is joyful. They believe a new age has begun. They write seven commandments on the barn wall. The most important one says all animals are equal.
Then the pigs take charge. Napoleon and Snowball lead the farm. Snowball is driven out. Napoleon gathers all the power. The pigs start to drink the milk and keep the apples. The farm starts to run worse than before. The animals work harder and eat less. One by one, the commandments are changed. In the end, the wall reads: “All animals are equal, but some animals are more equal than others.”
The last scene is the saddest. The animals look through the window at the pigs and the humans. They cannot tell who is who.
The lesson is not that rebellion is always wrong. The lesson is that a revolt without a plan only changes the faces. The animals knew what they were against. They did not know what they were building. Energy without direction is easy to capture. Clever people with ambition simply take it over.
Ask the same question about every regime change. Who sits in the chair now? What is the plan? Who pays the bill? The crowd that makes the change is rarely the crowd that gets the reward. Bangladesh and Nepal are still answering these questions.
Who is the real Gen Z?
Now look at who Gen Z really is in India.
Gen Z are ones who are guarding our borders, providing better civil services to masses, took part in OP Sindoor and creating start ups that employ people. So the rioting, street dancing and making reels bunch are anything but Gen Z.
The way forward
None of this means India should stop asking questions. A healthy democracy needs criticism. It needs a free press and honest debate. Young people should demand jobs, fair exams and clean governance. They should use votes, courts, and civic work to do it. Anger can be useful if it has a direction.
But burning the house to fix the roof is not reform. A country is not a reel that goes viral and fades. It is a long project, and the benefits come slowly.
India has stability. It has a young and skilled population. It has a growing economy and a place in the world that people respect. The job of this generation is to protect that base and build on it. Do not trade it for a moment of noise.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.