India’s Two Futures (Part 4)

We were already killing our future selves even before the virus attacked us. By not adequately educating our kids, by not providing skills to our youths, by limiting the jobs for people entering the workforce, by trapping farmers in a web of interventions, by making cities hard to live in for the working. In every case, a set of government actions deliberately hurt us. In doing so, they made the future an extension of the past that killed our prosperity. We let our future be strangled by our politicians for the past 70 years.

India’s present should have been very different. Every one of us should have been at least 10 times richer. There is nothing in the Indian DNA which forces us to be poorer than the average American, German, South Korean, Singaporean or Chinese. It is the rules we live under that have prevented Indians from being prosperous. These are rules made by kakistocratic governments, who see themselves as legitimate successors of the colonial British rulers. Unless we understand how our present has been damaged, we cannot hope to restore our future and rise from the ashes of the virus.

This is the choice we face as citizens of India. We can continue to struggle through our daily lives. Or we can imagine an alternate future. A future in which freedom and prosperity go hand in hand, where the chains are on government and not the people, where every voluntary exchange is not seen with suspicious eyes, where every new-born has an opportunity to dream of success, where wealth creation is celebrated and not taxed, where cities are celebrated as job hubs and not starved of infrastructure.

Are we ready to imagine such a future? If so, are we ready to rise and demand this future?

Tomorrow: India’s Two Futures (Part 5)

India’s Two Futures (Part 3)

To understand India’s post-pandemic future, we will need to delve into our post-Independence past. We chose a path – the British parliamentary political system and the Soviet socialist economic system. Did we have a choice then or was that the only option? Think back to the 1940s when the 2nd World War was ending. Germany, Italy and Japan had been vanquished. Even as Britain and the Soviet Union fought back in Europe, it was the might and innovation of the Americans that tilted the balance in favour of the Allied powers.

The America of the 1940s was already the strongest economic powerhouse in the world. Yes, there had been the Great Depression starting in 1929. But before that, for over 50 years, America had been transformed by entrepreneurs. Central to this period of economic growth was the American Constitution of 1789 which gave maximum freedom to the people and put severe constraints on the government. The American Presidential political system with its exquisitely crafted balance of powers and free-market economic system with its focus on free enterprise had created the world’s richest nation.

India in 1947 had just attained independence as the British left in a hurry. India was a very poor country. A new leadership took over in India. And what do they do? They created a Constitution which borrowed 242 out of its 395 Articles from the 1935 British-written Government of India Act, an act meant to enable a colonial power to keep the people enslaved.

The British Raj 2.0 leadership took India down the path of collectivism that was prevalent in the Soviet Union. India’s leadership chose a future – one which condemned future generations of Indians to perpetual poverty. Even after more than 70 years of Independence, 40% of Indian households are almost entirely at the mercy of government handouts.

What would India’s future have been had we chosen a different path – the American governance system that split powers between the three branches of government, and the American economic system that prioritised personal and economic freedom by limiting government action?

We will never know the answer since we didn’t choose that path. The virus has once again brought us to the crossroads where we need to make a similar choice. Will we make another mistake or will we choose wisely this time around? Which future will we select – suicide or rebirth?

Tomorrow: India’s Two Futures (Part 4)

India’s Two Futures (Part 2)

The India that we will have to live through in the near-term will be very different from the one we were living in till just about a month ago. That’s not the India I am asking us to imagine. I want to focus on a slightly longer horizon. What will India be in, say, three to five years?

There are two futures possible.

The first future is one in which the government becomes even more domineering and overpowering. This is a future in which people rely on the government for everything – our food, home, education, house and even our jobs. The politician becomes our God as lives and livelihoods come under the control of the government.

For those in power, this is nirvana – an opportunity that has come after a couple of generations. Even now, a set of people are already deciding who can travel and where, which industry can open, which item is essential, who should get what. Do we really want this kind of micro-management of our daily lives?

This is like the India of the 1950s, 60s and 70s when the licence raj was at its peak, when central planning ruled the roost. Few of us remember that world, but our parents lived through it. For those in power, this is the India that they would love to recreate.

There is a second future possible – where we determine our own destiny, free from the control of the politicians. It is one which we have seen just glimpses of. It is a future some of us experience when we visit free and rich nations like the US, UK, Germany or Hong Kong. It is a future built on the classical liberal principles of limited government, protection of individual freedom, economic freedom, property rights, rule of law and free trade.

Many will tell us that such a future is no longer possible given the human and economic devastation that we are likely to see in India. They are wrong. India can indeed craft such a future – however impossible it may seem today.

Indians, like people everywhere, respond to the rules and incentives. Striving to better one’s own condition is inbuilt in all of us. The question is will we be able to imagine and work towards this future – because that will pit the people against the politicians.

Thus there are two mutually exclusive paths for India. One is the path of planned poverty, the path that the politicians would take us on; the other is the path to pervasive prosperity, the path that we will have to fight for and create ourselves. Which path would you choose?

Tomorrow: India’s Two Futures (Part 3)

India’s Two Futures (Part 1)

A morbid fear has gripped the nation that anyone can be a Covid carrier and therefore potentially a killer. This has led to imposition of local quarantines – households, buildings, societies, villages, districts and states. What started at the national level (closing of borders) is now happening at the smallest possible level of homes. Even though fatality rates are very low, the “Laxman Rekha” has imprinted itself in the collective psyche of people. Only when we start rising above that will we be able to look ahead.

What is clear is that winning the war against the virus will take time – until we have herd immunity, or a vaccine is created. Either way, there are no short-cuts. Life is not going to return to normal any time soon. We will operate at sub-optimal levels for many months if not a year or two. Many industries will face significant downside going forward, even as new opportunities arise.

This is not just like a tsunami or earthquake which is a one-off event, and then one can get down to the rebuilding process. This is more like being attacked by a distributed guerrilla force with outbreaks here and there which will need to be suppressed as and when they emerge.

At some point in the future, the fear and devastating impact of the virus will pass. While the government actions in the near-term will determine the duration of the pain, what is clear is that there will be a time when the focus will shift from lives to livelihoods. That has not yet happened in India. Most minds are focused on the healthcare supply chain. I think it’s time for some of us to start thinking forward to the India that emerges on the other side of the pandemic, and imagining the India that will emerge from the ever-increasing lockdown carnage.

Like 1947, we face a fresh start. There is a fork in the road – a choice between two futures. We chose the wrong path then. Will we make the same mistake again?

Tomorrow: India’s Two Futures (Part 2)

Unlock India (Part 5)

The world after Coronavirus will look very different. Just like wars change nations, so too the virus will change India. It will be very difficult for us to go back to the nation we had before the virus did the damage. People will have been displaced, jobs would have disappeared, companies will look different, behaviour of consumers will have changed. Many industries will be transformed beyond recognition – for example, in travel and tourism, what will many months of zero revenue do? These are questions no business plan ever factors in. Whatever fiscal stimulus the government provides, it will never have the knowledge to restore India to the pre-virus state. A glass once broken cannot be made the same given. This is not something anyone could have planned for. The impact of the virus is likely to last for some time.

I have always believed that every crisis is an opportunity in disguise – if one is willing to look at it the right way. For India, we can make this the turning point in our economic history. No amount of handouts will be enough given the constraints we face. This is a moment in time to throw out the old rules that have governed India and create a new India – truly.

Here is a 7-point action plan that can get “The Indian Revolution” underway – a transformation that will put the people on an irreversible course of freedom and prosperity:

  1. Start by returning every Indian family Rs 1 lakh every year for the next 10 years. No distinction is to be made between rich and poor – the cost and time of figuring that is simply not worth it. As they spend, we will see jobs getting created and industries humming.
  2. This will require about $4 trillion dollars. Here is the calculation. 26 lakh crore a year equals $350 billion a year. Factor in some population growth, and that comes to $4 trillion. Where does this come from? From the people’s assets that are controlled by the government – land, minerals, PSUs, whose total value we had estimated at $20 trillion. Since these are new assets being brought into circulation, there will be no inflation.
  3. Commit to spending an additional $1 trillion dollars for the right infrastructure in India – hard (roads, railways, ports, airports) and soft (defence, police, judiciary).
  4. Cut all taxes to sub-10%, to leave money in people’s hands and make India an attractive investment destination in the world.
  5. Focus on the core things that a limited government should do – ensuring rule of law, protect economic freedom, property rights, free markets, free trade, decentralisation, and so on. All one has to do is to look at why some countries became rich – and replicate the ideas. Embed these ideals in a brief, new Constitution of India.
  6. Government should get out of the way of people. Let trade and voluntary exchange flourish. Let the entrepreneurs take over the task of creating wealth. They will find ways to solve problems.
  7. And finally, for all of us: for 10 years, forget about everything that divides us, and let us all unite for a single mission – to rebuild India from the ruins of the virus, to make India the nation it was once destined to be, to make every Indian free and rich in our lifetime.

These are ideas I have discussed at length in my earlier writings, and I will do so again on this blog. We need to start thinking of the future – one which is not riddled with fear, but filled with hope. We need to imagine a new India – the way a sculptor sees a rock and imagines a finished sculpture, the way an architect sees an empty tract of land and envisions a completed building.

Are we willing to think different to “Unlock India” not just once, but forever?

Additional Resources:

Unlock India (Part 4)

There is a second meaning of ‘Unlock India’ that we now need to start thinking about. It is about unlocking the true potential of the nation and its people.

The forced lockdown gives us all time to think about our past and the future. We should ask ourselves: Why has India not achieved its true potential in the world? Why has India not become a developed nation? Why is India still poor?

The single, simple answer to all of these questions is that Indians are not free. We have had governments since 1947 that have been extensions of the British Raj. They have kept most of the rules that maximise their power, which therefore minimise the freedom that people have. We rejoiced on August 15, 1947 when we became Independent – not realising that the only thing that changed was the skin colour of our rulers.

The virus era is going to allow the government to chip away even at the little freedom that we have. And in the name of safety, we will keep giving up our liberty. These compromises never end well. The elusive world of prosperity will slip away even further. For those in power, the virus has been a godsend – they get to control us even more, dictating every aspect of our daily life.

That is where we need to step back and think. The immediate unlocking of India so we can get back to economic activity must only be the start. We need to do much more – fight for our freedom so we can get on the path to prosperity. For this, we need to let markets work without government intervention – we are all capable of making the right decisions on our own and that is the only path to prosperity. We need to unlock the $20 trillion of wealth that is being controlled by the government in India – land, minerals and public sector undertakings. If this wealth is returned to the people, they can each chart out their own path going forward.

This virus inflection point must be leveraged to move India towards freedom and prosperity. This is the Nayi Disha India needs. Are we willing to, in the words of Swami Vivekananda, “arise, awake and stop not till the goal is reached?”

Tomorrow: Unlock India (Part 5)

Unlock India (Part 3)

We need to recognise that the effects of the virus will be there with us for a reasonable period of time. It will take time for immunity and/or a vaccine. In the meantime, if we do not take the necessary actions to get the economy moving, we are going to have a very long period of sub-optimal economic activity. This will end up causing more death and destruction than the virus itself. Every human life is vital, but as I pointed out earlier, no society can save every life – and the Indian reality is that 1,000 people die every HOUR.

We must start the debate about freeing people from their homes and getting them back to work. With each passing day of zero or low revenue, more people and businesses will die. We may not see this because unlike the Covid deaths, newspapers don’t count these deaths. Do we know that 2,500 people die on Mumbai’s railway tracks every year? Do we see those on the front pages of newspapers and prime time TV? No decision is easy at this time, but we must start discussing alternatives to what is the most draconian lockdown globally.

Here is a 7-point solution to Unlock India:

  1. All 65+ year olds to be quarantined – families to make the decision for their own safety. Most of the deaths globally have been in the older people with pre-existing conditions. In India, just 5% of the populations is over 65 years of age.
  2. Anyone going out should wear a mask. This is for their own safety and for that of others. We are already seeing the rise of the use of masks. We need to get this going faster.
  3. We need to increase testing, and have people take a simple smell-and-taste test – since the loss of smell and taste seem to be the early warnings
  4. Those who test positive should stay at home to start with – especially if they are below 65 years of age. In most cases, they will recover on their own. If conditions deteriorate in a week after onset of symptoms, they should approach a doctor / hospital. This will also ensure that limited medical resources are used only for the most critical cases.
  5. Each individual needs to improve personal hygiene: maintain some distance when possible, and wash hands regularly. We should avoid crowded public spaces for some more time.
  6. Should outbreaks happen, those areas will need to be quarantined – think of this as a “Local Lockdown.” Instead of unlocking areas selectively and keeping a national lockdown, we need to unlock India nationally and then make decisions on which areas to lock based on the cases that emerge.
  7. We need to decentralise decision-making about lockdowns to the lowest level possible. Every elected representative (MPs, MLAs, corporators) should be “quarantined” in their constituency instead of the safety of capital cities. They have been elected by the people and are close to the ground. They should be the “chief ministers” of their neighbourhoods and make decisions on which clusters to quarantine should outbreaks become severe.

The rest of us need to get back to work, and move India forward.

Tomorrow: Unlock India (Part 4)

Unlock India (Part 2)

The economic projections for India are going from bad to worse with each passing week. Migrants are ‘locked’ up in camps, employees ‘locked’ up in their homes, and goods are getting ‘locked up’ in – well, they are not even being manufactured. Of course, the government will print money and promise succour to many – like many governments are doing globally. Printing money without production will have serious consequences down the line which can plague Indians for many years to come. At a time when India needs to accelerate growth to put its people on a path to prosperity, the lost decade will become a lost generation.

So, what are we to do? We have a government almost entirely focused on the aspects and neglecting the economic aspectsSome handouts have been offered to selected sections of people; and more will come. There is never any free lunch – if something has to be given to someone, it has to be taken (by force) from someone else.

We are also back to the era of Soviet-style central planning where a few ‘quarantined’ bureaucrats decide on who should get what – they are already playing God defining what is an ‘essential service’. We are creating new processes (e-curfew passes) and trying to do efficiently things which we should not be doing at all.

That is what those in power have done for times immemorial. Every crisis becomes an opportunity to grow the Leviathan that is the government. And with that, the future prospects for both freedom and its twin, prosperity, will recede even further. In 1755, one of the Founding Fathers of the United States, Benjamin Franklin wrote, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

What’s the solution? We need to “Unlock India.” The politicians and the elite aren’t going to do it – most of them are in the segment most at risk because of the virus (over 65 years of age, and with pre-existing conditions). We need the people to demand that we be allowed to work. We have to take care, but life has to go on. Else, the India that will emerge on the other side of the virus is one which will be a nation we will not recognise.

So, what do we need to do? How can we unlock India?

Tomorrow: Unlock India (Part 3)

Unlock India (Part 1)

As the Coronavirus spreads globally and through parts of India, we are seeing a second pandemic accompanying it: economic destruction in the form of broken supply chains, job losses and business closures. At some point, the world will come to grips with the virus – through a combination of masks, testing, some form of distancing, personal hygiene, vaccines and immunity. The two questions to ask: how long will that take, and what is the economic cost that will be paid? A related third question is: can India afford the economic cost?

Let me start by saying that every life is important. As family members and citizens, we are duty-bound to take care of our near and dear ones, and others around us by following rules. Yet, despite all this, 9 million Indians die every year. That is about 24,000 daily, and 1,000 every hour. Let’s say that again – 1,000 Indians across the country die every HOUR. Some die of natural causes, others in accidents, and so on. We do not and protect every one of those deaths. We do take care – we have home care, medicines, hospitals, seat belts, helmets, and so on. And yet, the reality is 1,000 Indians die every HOUR.

What research has shown so far is that Coronavirus can be fatal for about 5% of those infected. It is especially dangerous for those over 65 years of age and having pre-existing medical conditions. The virus also spreads rapidly – it has a reproduction factor of 3-4, meaning that one infected person can infect 3-4 others, leading to exponential growth in infections. Many of those infected may not even show any symptoms – they are asymptomatic. A small percentage will need medical care, and an even smaller percentage will require hospitalisation.

To put this in context, the impact of the virus will lead to an increase in deaths over the next year in India. Even at the upper end of estimates, this is still expected to be much lower than the 1.5 million deaths each year from cardiac arrest. One more disease, some more deaths. We could lose a near or dear one also. We will be angry if they could not be saved.

The question to ask is: given the high rate of infection and spread (which will probably be hard to stop given that we may see multiple waves), and low fatality rate – can Indians afford to sit scared at home for the next many months and avoid all contact with each other when there is no guarantee that the virus itself will disappear even as medical science makes the best efforts? If so, why don’t we sit at home to avoid possible deaths on train tracks and on the road? Can we really afford to harm our own future in the way we are going about it right now? Even as we try and save lives from the virus, what about the lives, livelihoods and futures we are destroying because of the economic pandemic? Are we making the cure worse than the disease?

Tomorrow: Unlock India (Part 2)

Nayi Disha for India with Dhan Vapasi

In the post-Covid world, India is going to go through difficult times – like most other nations. The pandemic is stretching health systems, and also forcing lockdowns which are creating a parallel economic pandemic. The longer the lockdowns go on, the greater will be the damage. Like the coronavirus curve, the economic stress curve will also rise exponentially with each passing day. Flattening this curve and getting growth going again will prove more challenging.

The current period between the pre-Covid world and the post-Covid world gives us time to think and imagine the future. What should India do? How can India rise? Can we use this crisis to give India a Nayi Disha (new direction) – one which takes us on an irreversible forward path towards freedom and prosperity because the two are inextricable intertwined.

During 2017-2018, I had tried to create a movement for prosperity. You can read my writings and see my videos, with more details at the Nayi Disha and Dhan Vapasi websites.The Nayi Disha manifesto encapsulates my thinking.

While I failed then to even make a dent, I think the ideas are even more important now. The temptation for India’s leaders will be to print a lot of money, give it to people and run huge deficits to try and save the economy. This will take us in the opposite direction to both freedom and prosperity.

Instead, there is an alternate path – one which can truly transform our future. This involves combining public asset monetisation with returning the wealth generated back to the people. This is perhaps the only approach that will create lasting prosperity in the shortest possible period for the maximum number of Indians. I will show the what, why and how in future blog posts.