This is Democracy – Episode 31: Economic Development in India, and U.S. Policy

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Introduction with many voices: This is Democracy, a podcast that explores the interracial, inter-generational, and inter-sectional unheard voices living in the world’s most influential democracy.
Jeremi: Welcome to our new episode of “This is Democracy.” This week we will have a very special conversation about economic development in India, and the long history of US/Indian partnerships and challenges and opportunities in our current world. We have with us Sajeesh Kumar. He is a Lee Kuan Yew Fellow at Harvard John F. Kennedy School of Government. He’s also an individual with extensive experience in the development sector in India working with various groups. Sajeesh welcome to our show.
Sajeesh: Thank you so much, Jeremi.
Jeremi: It’s so nice to have you here. We of course start with a scene setting poem from Mr. Zachary Suri. Zachary what is the title of your poem this week?
Zachary: Indian Soul.
Jeremi: Indian Soul. Well let’s hear it.
Zachary: Underneath tall trees that sink into the hazy mist, and the dirt grass that seems to fill some of these streets like sandboxes in colorful palaces, tombs to ancient kings, amongst the rivers that flow through the cities of the urban millions with long lines of traffic trying to cross over arched bridges. Traffic that leans out of windows and shouts with the vibrancy of a thousand years, and it is a hopeful traffic that remembers the whole way but not quite the common courtesy of the road. And hidden above the rooftops on stone balconies among monuments and arcs to the peoples who pass around them each day. Within the fibers that stretch through these great expanses of populous modernity mixed with the music, the smell of the historic beginnings. Within these strings across the subcontinent beneath the rising of the sun is a part of me that I know well. It is a part of me that loves spicy food, talks loudly. A part of me that is a quilt sewn in dedication to diversity. A part of me that loves intellectualized adventure, political theory in the sauna of a restaurant. In India there is a section of my soul, a piece of my future, and of the future of us all. It is a pattern hallucinated under these humid clouds that cover a scorching sun reveals itself in the laughs among a babel of cousins along a million suburban yards across continents several thousand miles apart, and it is one square meter of my soul that knows the way the birds sing in the jungle the way the wind whistles along the river deltas in the winter mornings. And it is the part of me which named me, thumb-tacked me to the map of the human race under a thousand categories but the same name. The same name the mountains and the valleys, the stupas and the skyscrapers, the rivers and the deserts. And there is beneath my skin my hair, my breath, some Indian soul that sings.
Jeremi: Wow. Very, very powerful poem, Zachary. What is your poem about?
Zachary: My poem’s sort of about my own connection to India being part Indian, but also how vibrant and colorful India is and how its growth and its momentum is something that’s going to be very important to the entire world in the future.
Jeremi: Right, and you feel that personally don’t you?
Zachary: Yeah.
Jeremi: So Sajeesh, this is a perfect spot to bring you into the conversation. Americans have thought about economic development in India for a long time, and Indians have had a special connection to the United States really since the 1960’s. How has this story changed in the last 10 to 20 years since you’ve been working on the issue? What are the biggest changes you’ve seen in economic development issues?
Sajeesh: I really want to congratulate Zachary, it’s an amazing poem. It kind of captures the essence and the soul of India. I think what’s happening around the world, the economic growth story of India, despite being so fascinating, has been underestimated.
Jeremi: Yes.
Sajeesh: It’s one of the– It is actually the fastest growing logic automated world, and we attract the highest FDI driven economy compared to any other countries [inaudible 00:03:59].
Jeremi: Foreign direct investment.
Sajeesh: Foreign direct investment. And they’ve been doing incredibly, and the admin sector is transforming the cities. You know, we have a hundred small city program. That story has to be told. I think in recent years there has been much more emphasis on [inaudible 00:04:18] in an economy, which all started in 1991. And after that, especially many governments in recent times, the government we have in India has been taking up a lot of things like killing the people for the future. Really look at India’s future in terms of the demographic dividend. There was a time 50 years back we always used to say that its population explosion.
Jeremi: Right.
Sajeesh: Today that is actually getting converted into a greater portrait and we call it as the demographic dividend.
Jeremi: Yes.
Sajeesh: And it has to leverage all this demographic dividend.
Jeremi: Right.
Sajeesh: And the government, especially in recent times, has been doing a lot of things to leverage on that man power.
Jeremi: Right.
Sajeesh: And which we have in plenty.
Jeremi: Right.
Sajeesh: And India’s future will depend on how we leverage on that skill technology and knowledge of this generation to come.
Jeremi: Right. Why has India done so well in the technological areas? Most Americans are quite familiar in Austin, in the Bay Area in Boston, with all of the Indian computer engineers and now CEO’s of technology companies even in the U.S. How do we explain India’s demographic dividend in this area?
Sajeesh: Yeah, isn’t it fascinating that you look at Microsoft, you look at Google because they’re all companies headed by the Indians. I think the Indian school system, going back to the history, we have a tradition of the mathematics, and the science, and exploring the truth through scientific method. Again, that is one part of India which has not been told.
Jeremi: Correct.
Sajeesh: To the westerners has not been explored. So that has kind of lead to this kind of technological supremacy of India in at least some of the sectors.
Jeremi: It seems the English language is also important, right? It’s got a big advantage.
Sajeesh: Oh, it’s a great advantage and also we have some of the incredible institutions in India if you name IIT. Its [inaudible 00:06:13] in India.
Jeremi: India Institute of Technology.
Sajeesh: India Institute of Technology or there is an all in den student medical science and most of the doctors in US they’re actually from the All India Medical Science, and then we have Indian student management, the IAM’s. I think the greatest challenge for India is it’s a country of 1.3 billion people.
Jeremi: Amazing.
Sajeesh: If you really actually pick up the bits and pieces of excellence and the new make and nation, I’m sure it would be bigger than some of those western/European countries.
Jeremi: Of course.
Sajeesh: But we need to actually do it in a much more inclusive way. You need to provide some of those basic services in a much more universalized way.
Jeremi: Right.
Sajeesh: That’s the greatest challenge. We require a lot of reforms, we need a lot of institutional capacity to be built, we need rigorous finances, and these are all the great challenges, and I’m sure that India is actually in the right direction. Like Peter Bluesy report states that by 2040 India is going to be the second largest economy in the world after China. Like [inaudible 00:07:19] the innovatability may not happen always but unexpected does so we need to get that process–
Jeremi: Classic John Maynard Keynes, yes, yes. So why is it that China has seemed, at least in the short run, to be more successful than India? Many would say if you look at where China was in the late 1970’s and you look at where China is today it gets much more attention, and some have argued, contrary certainly to my point of view, some have argues that China has the advantage of not being a democracy and that India has the disadvantage of being a democracy. How do you react to that? Clearly you see democracy as a strength for India in the long run. How do we understand the opportunities and the advantages democracy provided vis a vis China?
Sajeesh: Oh, you know, I will not forgo my democracy for anything else in the world. I think I’m quite proud to say that the democracy has been the strength of India. It’s about 70 years since we got independence, we had a different administrative political system compared to China, but at the end of it, in 70 years, what we could achieve compared to any other nation– And I would actually put it even in comparison with China but yes, in the recent years China could actually leapfrog some of their advantages to take the economy to different level, but we are also catching up. I think India’s progress has been slow but steady. So if you really extrapolate that digitry it’s very certain that in 2025 years, India will have its legitimate place in the commentary of nation in terms of the economic development. Yes, we are more democratic and the freedom of expression, the liberty, and the values we endear to our self we need to consider that as the basic principle and then to weave the development story [inaudible 00:09:17], and that process is happening in India and it’s just a question of time.
Jeremi: But does democracy help development, or is democracy an obstacle? How do we think about–
Sajeesh: I would always say that there’s no trade-off. There’s a complimentary to each of them. You may actually think that in the short term you may have certain gain then you will get carried away by the fact that democracy may hamper your development, but in the long term, and you have the example of the United States, and India has gotten incredible democracy and I’m sure that that’s India’s strength. And also in term of the economy, you know, how to be inclusive and how to actually bring the interest of the larger group, and sections, and the marginalized into the development story and we’ve been doing well. But having said that, we need to learn a lot of the things from other developed countries and go out and try it, and to give one example…
Jeremi: Please.
Sajeesh: India started off as an agricultural society and then most our GDP used to come from the agriculture sector in 1950’s, and from there we transformed into the manufacturing. But that process we couldn’t handle well so India didn’t become a big manufacturing sender unlike China which could leverage that. But today, in case of the service sector, the leapfrogging we are doing in the service sector– and I remember that. You know when I was a child to get a telephone connection somebody has to wait for one year or two years.
Jeremi: I remember that too, yes.
Sajeesh: And today India has got actually the largest internet connection after China, and how from the not having the telephone connections to having universalized telephone/internet connection to the whole society that’s an incredible story. So we need to now take that to the next level, and for that the most important thing is actually how do you leverage your own human capacity by providing the greatest education to them and the skill to maneuver those kind of things in the world.
Jeremi: The traditional argument would be, and I think you’re voicing this, that authoritarian societies like China can move more quickly to adopt new technologies from somewhere else, but democratic societies will be more innovative because they will encourage creativity and free expression, correct?
Sajeesh: Absolutely, and that is one of the reasons why the Indians actually do very well. Not only in India, even outside India.
Jeremi: Precisely.
Sajeesh: And most of the technological innovations which has propelled the economy of the world into the next level has been from some of the Indian [inaudible 00:11:45] and you need to give credit to that.
Jeremi: Absolutely, no doubt.
Zachary: So we see India getting more on the global stage as a large democracy that is doing very well economically and politically, but how come India has not yet broken into some of these large institutions as a leader like the UN Security Council for example. Do you think that something like that is necessary for continued growth and continued acceptance around the world?
Sajeesh: Yes, I think India has always taken the global leadership position. It’s not only about the institutionalization of that power [inaudible 00:12:24] but in terms of moral leadership positions I think there has been an incredible power, and the world affairs India has been trying to voice its profundities and then trying to align its own objectives with that of the universal principles. So to that extent, yes, India has been a global power. I think the world has to look at India in a different way and that’s very important because most of the growth stories in India has not been well understood.
Jeremi: Right.
Sajeesh: I think the media around the world also has to now give more importance and then try to understand that at the end of the day you’re actually talking about 1.3 billion people.
Jeremi: Sure.
Sajeesh: And one of the most strong democratic nations on earth. So that story needs to be told.
Jeremi: It’s quite interesting because I think for many American, especially those around universities and cities that are involved in the technology sector, they see Indians as highly skilled, often quite articulate and eloquent speakers of English, but they view India as a poor society at the same time. What’s your reaction to that?
Sajeesh: Oh, it’s not. We also have nowadays maximum millionaires and billionaires coming from India. This is the same thing I told. I had actually a couple of my single boy friends in my program so I’ve been telling them that if you create a city or a nation with the best of India put together.
Jeremi: Yes.
Sajeesh: That would be one of the richest, in fact the most sophisticated nation on earth.
Jeremi: Sure.
Sajeesh: Yes, the greatest challenge is that since I told you it’s a country with 1.3 billion people, and how do we do it in a more inclusive way? In [inaudible 00:14:14] for example, India even today has the second largest railway connection. We have actually the second largest network of roads. We have the second largest internet connection. So you have the basic infrastructure but from there to actually bringing those technology innovations to improve the quality of life of people and that’s a great challenge, and you need to do it in a more inclusive way. Always, and I’m emphasizing this fact because in India the greatest challenge is how do you actually provide that 1.3 billion people good quality of life. And there’s been incredible [inaudible 00:14:50] by the government in recent past to actually achieve that political call.
Jeremi: And I think this is the question moving forward. If we understand how India has developed over the last 30 to 40 years and in quite extraordinary ways as you say Sajeesh, the challenge is where to go forward, and traditionally in prior decades of course India had a very centralized industrial planning. This was especially under Prime Minister Jawaharlal Nehru, and of course where we go forward now is an interesting question. This is the question our student Eddy Santos has asked and let’s hear his words for this question.
Edson: What industrialization routes is India taking to convert their economy into a world power?
Jeremi: So how do you see India in an environment now where it’s clearly not going to be one person at the very top who makes all the decisions much broader more open society. How do you see economic policy moving forward?
Sajeesh: Yeah, so I think the question was about the industrializations like I pointed out in the earlier question. India’s story was actually a transformation from an agriculture society, and generally if you look at any of the western nations you’ll find that from the agricultural societies they’ll say transformation to the manufacturing and the industrialization, and from there to the service sector and the knowledge [inaudible 00:16:10] based industry. But in case with India it’s a very unique story from the agriculture based economy we actually [inaudible 00:16:21] the second level of manufacturing and industrialization to the third level of service sector [inaudible 00:16:26]. So if you look at India’s economy even today, about 60-65% of the total GDP is from the service sector.
Jeremi: Really?
Sajeesh: So–
Jeremi: What percentage is agriculture?
Sajeesh: It would be about 30-35%, even slightly less than that.
Jeremi: Really? I would’ve thought it was larger. Okay.
Sajeesh: So about 60, 65% are coming from what you call the service sector. It’s incredible. Now how you leverage that is going to be the challenge. And having said that, and there’s been a lot emphasized on manufacturing also. The government has come up with the Make in India program where we want actually to give [inaudible 16:59] to the medium and small-scale industry. Because at the end of the day, a country like India is a vast country with 1.3 billion people can be uplifted only through an [inaudible 17:10] based on the small and medium manufacturing sector. And that process is actually currently underway in India. So I would say that we have to understand India is going to have the median age of 31 years by [2030]. And that’s the kind of demographic difference we are talking about.
Jeremi: A very young society.
Sajeesh: It’s a very young society. And this is not what you’re talking about of 1950s when India had less than 20% of literacy. These are the people who are actually coming out of engineering college, having the technical know-how of how to get things done very innovative. And when that generation actually take up the leadership and the prominent position, and then India is going to be at a different level. And I’m very confident of that growth story of India.
Jeremi: I think it’s an incredibly powerful story. How do you make sure all those young, well-trained engineers and scholars, hopefully also some historians– How do you make sure that they have opportunities?
Sajeesh: Well yeah. So we have always followed a mixed economic growth model where the private sector has its own place to be, generally at the medium and the small scale industry level. This was the growth story of India in 1950’s and ’60s when you can criticize whether that has given the dividend which was supposed to be achieved. And then there was an importance of the public sector. So the public sector used to invest mostly in the large scale industries.
Jeremi: Public sector meaning the government.
Sajeesh: Yeah, the government. And today, the government is actually facilitating, you know, so providing the skill, providing the healthcare, providing the infrastructure in terms of the road, in terms of the railway network, in terms of the educational institution, providing the universal coverage of health. So that is the role of the government increasing in any modernized world. You need to be a facilitator rather than dictating what kind of growth it should take. And then to allow the young generation to come up to take up the innovative startups and stuff like that, and do that innovation and then convert that into a business enterprise. So how the government is actually going to create that kind of an ecosystem is important. And that kind of a role is also taken up by the government recently. And if you want to look at the Startup India–
Jeremi: Yes.
Sajeesh: –and some of the innovative programs, the skill development programs–
Jeremi: Smart cities, as you said.
Sajeesh: Tens of thousands of the people have actually been [inaudible 19:37] in consonance with industry [inaudible 19:40]. And that kind of a transformation is actually happening. The financial inclusion, and we have one of the static benefit transfer scheme, which is a technology marvel, you know? We have one unique ID program in India called Aadhaar. All the services to citizen is actually delivered through that particular unique ID number. So there’s an interesting story happening back in India.
Jeremi: Sure.
Sajeesh: I think the world has to be much more aware of what is happening there. And then the people will start understanding, you know, what is India, and what is the place of India in the near future.
Jeremi: Yes, very compelling. What role should Americans play? Particularly Americans like Zachary who have a familial connection to India? What’s the best way that we can see the future of Indian American partnership? These are two countries that work together very closely, and will have to work together even more closely in the future, yes? So what do you envision?
Sajeesh: Yes. Yeah, I think India and U.S. relationship has been always based on the mutual trust, and we always know that these are the two largest democratic nations in the world.
Jeremi: Yes.
Sajeesh: We have a lot of shared interest, shared goals, and we’ve been working together as countries between the people to people. I would request all the [inaudible 20:53] generation of the America to know more about India and what an incredible story it is, in terms of the culture, in terms of the history, in terms of people, the diversity, you know? I belong to a place called Kerala, which is the southernmost part of India, and I speak a language called Malayalam. And my wife is actually from northern part of India, and she speaks Hindi. And most of us actually know more than four or five languages.
Jeremi: Right.
Sajeesh: You know, your kids growing… the kind of the culture…
Jeremi: I have seen you know how to curse in many languages, yes.
Sajeesh: (laughing) Yeah. So I think the younger generation of America, or anywhere else in the world I think should at least try to know more about India. And then also this incredible growth story and all that. I think that– the aspiration of the younger generation anywhere, like in India, it is the same. You know? You want to achieve great in your life, you want to experience the life, how beautiful it is. Yes, I would only say that I’m sure that both governments are working together, and they have become closer in recent past. And that’s a strategic relation. It’s a long-term relation which is going to be stronger and stronger in future.
Jeremi: Right. So one final question on this. How can young citizens– students, those in their 20’s and 30’s– how can they get more involved in India? Many will go and visit, but as we’ve talked about elsewhere, you and I Sajeesh, many who visit India, they go to the very traditional places. And of course the traditional places are beautiful, but that’s not what you’re– you’re not really talking about the Taj Mahal, right? You’re not talking about the Red Fort. You’re talking about a different India, an India that’s often not in the normal tourist pattern, right? So how do– how can young, eager, aware Americans learn more and connect more with the exciting India, the dynamic, forward-looking India?
Sajeesh: Well, I think the Indian students community, the people of Indian origin who are in different parts of the world, and there are many, and in almost all the countries. I think they need to reach out to respective societies, and then try to tell that incredible growth story. And I’m sure that what happens, that everybody who comes from here, even today, they just want to see the Taj Mahal or they try to explore the mystery about India. And beyond that, India has grown in incredible ways in recent past. They should also– I mean, one of my cousins who actually came and [inaudible 23:13]. So she also went to one of the city councils and then had interaction with the mayors and some of the officials. And then she was really fascinated, and she could find a lot of similarities between Austin and that Indian city, so for example, Pune. But lots of the people were actually going from U.S. or other foreign countries, they actually tend to go to [inaudible 23:38] in stereotypical place, and they just create that impression. But that’s not– and India has, you know, it’s been growing economically in amazing ways.
I think Indian community in other parts of the world also have to reach out to the other societies and communities and tell this story. And we have an amazing story. And the government has recent past, has done amazing well to actually tell that story. So where would I go even now? You know, people ask about that story, and I very proudly try to project what a wonderful country it is.
Jeremi: Right, right. Well certainly this captures one of our central themes, which is the power of democracy is a story. And democracy can be a force not simply for spreading hatred, but a force for bringing people together around possibilities and opportunities, especially young people. And the power of student exchanges, the power of connecting university students, and businesses, and sister cities and things of that sort, these exchanges often look like they’re not very serious, but they might be the most important thing we do.
Sajeesh: Absolutely, I totally agree. Totally agree, Jeremi.
Jeremi: What do you think, Zachary? Are young people interested in this story of India?
Zachary: Yes, I really do think so. And I think part of it is that a lot of our– a lot of people of my generation are growing up with Indian friends in areas that have large Indian populations, and I think that can only help. Like, most of my friends who aren’t Indian or have no connection genetically to India, they know people who are Indian, and they know something about Indian culture. And I think that can only help when we’re talking about this on a global stage.
Jeremi: I think that’s a wonderful note to close on. A world where Indians and Americans, and those from other societies are coming together, learning together, doing business together. That’s a world that sounds not only more economically dynamic, but also more peaceful and cooperative. Sajeesh Kumar, thank you for joining us today. Zachary, thank you for your wonderful poem.
Sajeesh: Thank you so much.
Jeremi: My pleasure. Thank you for joining our episode of “This is Democracy.”
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>> The music in this episode was written and recorded by Harrison Lemke, and you can find his music at harrisonlemke.com.
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