Can Manmohan deliver on Montek's vision?

“Let Delhi be, you go ahead,” was the title of the speech that the Late Ganshyam Das Birla gave over 25 years ago. I remember borrowing the transcript from my father’s library and reading it and re-reading it at the expense of completing my homework. In those formative years, the speech was interesting to me due to it rebellious streak. It mocked, albeit politely, Indira Gandhi’s socialist beliefs that suggested that government holds answers to all problems; the business world needs to be viewed with skepticism and distrust; and walling one’s economic boundaries was the right path to development. Mr. Birla’s speech was part response to his frustration with the government, part attempt at inspiring people to be not bogged down by the central government’s red tape.

I was reminded of Mr. Birla’s speech as I listened to the erudite Mr. Montek Singh Ahluwalia as he presented his “Vision for India’s Future” at the Chicago Council for Global Affairs on October 27th, Friday. There were subtle similarities in the message from these two eminent leaders—one a restrained member of the business community speaking in the 70s, another a liberating head of the Indian government’s premier planning group today. Mr. Birla would have been pleased to hear the bastion of Delhi’s elite bureaucratic body talk about the role of the private sector in India’s development.

Mr. Ahluwalia’s talk at the Council was expansive. He proposed a higher growth rate for the Indian economy in the coming years, additional investments in education, and a strengthening partnership between the government and the private sector. He laid out a vision to enhance the infrastructure, and correlated the impending US-Indian nuclear agreement with the needs of the nation’s agriculture sector, thus propagating its social benefits to those who may still have doubts about the country’s intentions. Mr. Ahluwalia’s extemporaneous medley of economic, social and political issues was impressive.

If I had to create a subtitle for the speech, I would call it “Delivering 10 percent growth while being inclusive.” That’s right. Mr. Ahluwalia presented a vision and paired it up with its inherent challenge. He used an example—the gains from an 8 percent or higher national growth rate may be felt in the constituencies of say 340 of the 540 Members of Parliament, but in a democracy the remaining 200 MPs left-behind would be the most heard from as they loudly voice their disagreement with the government’s policies. He seemed to suggest that the challenge for India is less about delivering growth at a 9 and then 10 percent clip, which he sees as an achievable goal, but more about being able to deliver growth in an inclusive manner—such that all constituents benefit, beyond the regional islands that fuel the country’s growth today.

This challenge of achieving pervasive growth requires ambitious programs that address the country’s problems. Mr. Ahluwalia confronted the most fundamental of those problems head-on—the country’s flailing infrastructure. He laid out a vision for a $100 billion investment in infrastructure, of which he suggested almost 80 percent should come from private sources and implying that a portion of it should come in the form of foreign direct investment. He saw investments in infrastructure and the nation’s ability to sustain a 10 percent growth rate as a cause and effect relationship.

The Chicago Council for Global Affairs, founded in 1922, is hosting The Year of India series. The Council has good institutional knowledge and is familiar with India’s economic reform journey that was started by Mr. Ahluwalia 15 years ago. The underlying message to the audience that had gathered to listen to Mr. Ahluwalia was around India’s public-private partnership initiatives. Mr. Tarun Das of the Confederation of Indian Industry followed Mr. Ahluwalia in citing ways in which the government is working with the private sector—both foreign and domestic.

The talk infused confidence around the people I was seated with and I would guess the same across most in the audience. This definitely had something to do with Mr. Ahluwalia’s track record that speaks for itself and leaves little doubt that India’s economic planning is in good hands.

Although, there is the other side—the political reality. One does wonder if Mr. Ahluwalia’s friend, ex-colleague and boss Prime Minister Mr. Manmohan Singh has the political acumen to keep together the governing coalition and cajole his parliamentary colleagues such that the economic plan is given an opportunity to become an “inclusive” phenomenon. One does wonder if the Prime Minister can build institutions to support a governance model that can see through a $100 billion investment inflow towards infrastructure, that too most of it coming from the private sector. In spite of all the good news emanating from India, the day-to-day realities of corruption within and outside the government continue to be the country’s Achilles heel. Prime Minister Singh will need to show the government’s fortitude to fight this malice in order to draw large investments in a sector [infrastructure] where corruption has long been omnipresent.

I left the Chicago event with little doubt that Mr. Ahluwalia seems to have the right vision. But, my skepticism around the realization of that vision is real as well. In 1991, when Mr. Singh and Mr. Ahluwalia were partnering on the reform process the challenge had more to do with the country’s dire economic situation; this time around the challenge to realize the vision laid out by Mr. Ahluwalia seems to be more a political one.

So, can the scholarly Manmohan of bureaucratic origins deliver on Montek’s vision?

(This column was published on www.rediff.com)