The expansion of aspiration is accompanied by another remarkable fact. India is one of the youngest countries in the world. This is both an asset and a challenge. It is an asset because a potential demographic dividend is in India's favour. If properly educated and harnessed, the supply of a talented labour force could propel India to great heights. On the other hand, if the education system does not meet this growing demand, India could face a potential social catastrophe. Societies are most vulnerable to social convulsion, not when they are poor, but when they are unable to manage the expectations of change. As policy makers we can have complicated arguments over all the things India needs to do to achieve its full potential. But the truth is simple: education, education, education. This is not the occasion to go into a detailed discussion of kind of education Indians will require. The challenge for Indian education will be to cater to different kinds of needs: basic skills that can allow millions of Indians to make the transition from agriculture to non agricultural employment; skills that enhance the average quality of our workforce; skills that produce innovation at all levels, but also skills that scale the highest peaks of knowledge.
The language of power is always fraught with difficulty. But if there will be any true measure of India's power it will be this: Can India move from being a consumer of knowledge to being a producer of knowledge? Winston Churchill rightly said that the Empires of the future will be the Empires of the Mind. Is India equipped to rise to the challenge? But there is a point that needs to be emphasized. When we think of excelling in the domain of knowledge, we have to think of two ends simultaneously. Much of our discussion is focused around producing world class knowledge. When will we produce more Nobel Laureates? That question is important. But also bear in mind the countless faces that remind us of our knowledge deficit. The person spraying pesticide in your fields, or doing pest control in your homes, has no means to protect himself from the ill- effects of the chemicals he is spraying. His employer seldom cares. He himself has few options, but also little knowledge of how to protect himself. Or think of simple questions like: Why do our construction workers put themselves at more risk than is necessary? Why are they not using wheelbarrows instead of their heads? Why are they not using brushes instead of their bare hands? Why do villagers in some parts of West Bengal not know that their water has been contaminated with arsenic? In short, knowledge processes need to be internalised at every level of our existence. It cannot remain confined to simply what happens at elite institutions.
If education will be one mechanism of realizing our potential, our approach to inequality will be another. We are often sceptical about discussions of inequality, because we associate our past failures with hypocritical talk about equality. What did years of socialism give us but poverty and state control? Did not state policies to produce more equality amongst regions only produce more inequality? There is an important lesson to be learnt from our recent history. We will have to address inequality without stifling freedom and innovation. But addressing inequality is important for political stability. Today India's politically most vulnerable regions are those where groups like Adivasis have been marginalized. They cannot fully enjoy their traditional rights, but nor have they been given the skills and resources to take advantage of the modern economy. Other vulnerable groups like the Dalits are finding powerful expression through politics. The sense of empowerment and dignity amongst Dalits has been growing. There are interesting measures of this. In many cities, the marginalized, even those in a relationship of servitude, assert a sense of dignity in one crucial respect: by their refusal to clean toilets, at almost any price. In some ways this is an astonishingly encouraging phenomenon. To invert Gandhi, the revolution is not how many upper castes clean their toilets; the revolution is measured by how many lower castes have the option of refusing to clean other people's toilets. This change is not as widespread as one would wish, but it is clear and palpable. But it is precisely this moment of rightful reclaiming of dignity that also makes the question of social relationships across caste and class divides tricky. If the hopes of the poor and most marginalized are disappointed, India could have renewed social conflict. Several countries in Latin America experienced a couple of decades strong growth, only to be pulled down by growing inequality and class divides. Gandhi is out of fashion. But his yardstick for India's success remains relevant: how will the poorest of the poor fare?
India has an unprecedented opportunity to address issues of equality. Our social contract has to be that government will create a conducive environment for entrepreneurship and growth. We will now have to imaginatively think of how we can incorporate environmental concerns in our growth path, and treat that as an opportunity, not a constraint. The gains from the growth will be reflected in rising government revenues, even at lower rates of taxation. These revenues will then be used to empower the poor through investments in health, education and social support programs. To some extent this is already beginning to happen. Government revenues have been experiencing unprecedented growth over the last decade; and will continue to do so if we maintain a growth rate of seven per cent or higher. Indeed, India has a low tax to GDP ratio, and if we introduce innovative taxation measures like GST, our tax to GDP ratio can go up to 16 percent without raising rates. That will make enough funds available, to redeem the promise of our social contract.
But, it could be argued that the problem is not lack of funds, but corruption and poor delivery. This is true to a certain extent. For complex reasons, we are not likely to see a diminution in corruption any time soon. But what may, in the end, matter more is not the fact of corruption but the structure of corruption. There are three reasons to think that this structure is changing. First, the scale of government spending is altering the incentives for politicians. Till the late 1990s, even the best performing government could not make much of a difference in the lives of the poor. A scheme worth a thousand cores used to be considered a big scheme. Now schemes are of an order of magnitude bigger; in some cases over hundred thousand crores. This is leading some politicians to the conclusion that if they perform well they will be rewarded by the voters. Think of the turnaround in Bihar for example, a state we had written off. The scale of government spending is making possible a shift away from the politics of identity to the politics of development. We have a long way to go, but this change has been made possible by growth. Second, our infrastructure is woefully inadequate. But again, compared to a decade ago the quality of our roads, ports, airports is improving. There is a real revolution in rural roads, thought the energy scenario remains bleak. It is not that corruption has come down. But politicians have found innovative ways of extracting rents at the same time as ensuring that quality of construction improves. Third, the main source of corruption in services to the poor was that the state simply did not have instruments to identify who the poor are. For the first time in India's history, if the universal ID scheme is successful, will the states have the means to identify the poor. This will enable better delivery of social services and subsidy. I don't want to minimize the challenge of corruption. But now all the elements are being put in place that can help mitigate its ill- effects.
The last phase of the deepening of India's democracy cantered on greater representation for marginalized groups in politics. India will not need a different kind of deepening. India remains amongst the most centralized societies in the world. Just as the lines of all our development challenges pass through education, the lines of our governance challenges pass through decentralization. Decentralization is important for a number of reasons. First, it is a much more effective mechanism of accountability. Our experience with decentralization has been mixed primarily because we have not properly decentralized. Proper decentralization requires devolution of powers, finances and building capacity. Despite the 73rd Amendment we have not done any of these things properly. Second, decentralization is a better way of accommodating identity aspirations. Third, the biggest challenge we will face is coping with rapid urbanization. Global experience tell us that unless there is clarity over what functions of government should be performed at which level, it is very hard for societies to manage rapid urbanization. The deepening of our democracy will require a debate over the proper functions of different tiers of government.
Education and Equality are central to India's future because they not only define the content of our power; they are also the instruments to achieve it. It is often argued that the character of our politics will remain central to India's future. In a sense this is true: a politics that is divisive and corrupt is not likely to serve any of our aspirations. But the one thing that recent history has taught us again is that politics often improves through indirect channels rather than political reform itself. Some would argue that security concerns and India's external environment remain our primary challenges. They are important challenges, but if our internal institutions are in order, we can withstand them. The one heartening feature of Indian politics has been that all attempts to derail it through the politics of identity have failed. The great Hindi writer Hazari Prasad Dwivedi one said, "bharat ka lok nayak vohi ho sakta hai jo samanvaya kar sake" [India's hero can only be one who can establish harmony]". India has time and again proved that it prefers a politics of synthesis, not polarization. If India remains true to its values, it can surmount any challenge. Now it also has the aspiration and energy to propel it.
Pratap Bhanu Mehta is President of the Center for Policy Research in New Delhi. This piece originally appears in the January 2010 issue of Outlook Saptahik