I was reading a book on India’s economic history when I started thinking about why we took the wrong policy turns we did repeatedly since Independence. My answer: it comes down to the leader at the top and his/her vision. Which, if you think about it, is not very different from what happens in the corporate world also.
A leader has great influence over the economic policy of a country. The mental models of the leader determine the direction of policy. If India has had flawed economic policy through the years, then in stands to reason that the mental models of our leaders were flawed. Also, given the position they were in, it is only a rare leader who is willing to learn and change by listening to others. Most of those around the leader are not forthcoming with dissent. As a result, what the leader thinks generally holds sway.
Look at India through the eyes of its leaders of the Nehru-Gandhi family, since they have ruled India for most of the time since Independence. Nehru had a dislike for being in anyway dependent on anything foreign, even terming it economic imperialism. Instead of integrating India into the world via trade, he cut India off through his policy of import substitution industrialisation. Indira Gandhi had a socialist bent of mind – with a focus on redistribution and equity. The outcome was all the anti-poverty programmes and various measures to ensure forced redistribution of wealth (high taxes, licence controls on big industry). Rajiv Gandhi did have some good ideas, but did not have the full understanding of the need for opening up the economy.Quite obviously, his mother was his biggest influence.
Sonia Gandhi (MMS is quite irrelevant) too has been influenced by her mother-in-law since there have been no other visible influences on her. So, we see the modern method of redistribution – take money from the middle-class and hand it over to the poor. Farms loans, NREGA, and a myriad other social sector schemes with one thing in common – handouts. What makes us think her son (or daughter) will be any different? Is this the India of tomorrow we want?
What India needs is a real leader who lives, breathes and understands development. A leader with vision who can see the future and make things come alive. Until that happens, we are not going to get out of the morass. If anything, we are digging a deeper hole and reaching a point of no return. The only two leaders who did something good were the ones who did not have the legacy of the past and the family – PV Narasimha Rao and Atal Bihari Vajpayee.