Global Economics

Do Not Reinforce Two Indias


Quotas will only enshrine caste differences in the constitution and prevent India from reaching its full potential, says Pace University's Surendra Kaushik

"What a country! Part Silicon Valley; part Stone Age" is how Steve Hamm, author of Bangalore Tiger (and a BusinessWeek senior writer), describes India. In a recent visit to India an American friend asked to know my views on India's future, to which I replied "mixed", in terms of progress and poverty. She thought so also.

Another friend on the same trip concluded on her return that after seeing India for the first time she is "not worried about competition from India." These and other increasing numbers of visitors to India may not be the de Tocquevilles of their time, but they are good observers of the present and a reasonably distant future.

Clearly, there are two Indias—the India of the successful nonresident Indians around the globe, the India of the elite in government, top universities, and business. This is the group that has become known to the outside world as the English-speaking, university-educated, software-writing engineer, entrepreneur, and exporter of call center services, pharmaceuticals, leather and silk goods, and movies. This group has demonstrated what a mere 4% of the population with college education can do in a short period of less than 20 years of lower taxes and a more open economic system, when allowed to be entrepreneurs, innovators, and professional competitors inside India and to function around the world as exporters, importers, manufacturers. This is the source of progress and great prospects for India.

Keeping India Poor

And then there's the other India of some 800 million in big cities, medium-size towns, and villages. They are promised everything by some 70 or more political parties in a continuous democratic exercise at the polling booth in numerous and shifting vote-getting political alliances. This is in a country where only 1.5% of women have college education and which has a gross underinvestment in education. The government's focus on socialism and distribution; caste-based politics; religion-based rights; corruption; and broken-down infrastructure (roads, water, housing, electricity, schools, digital divide) in Bombay, Bangalore, or any village across the country— all these factors keep India poor.

Consider recent news items in the global press: Among 119 countries, the rates of child malnourishment in India are near the statistical top of the world, below only Nepal and Bangladesh. India faces a great shortage of drinking water, while the India Corruption index of 2.9 out of a possible score of 10 ranked it at No. 88 among158 countries. Adult literacy, higher-education enrollment, the ease of doing business, foreign direct investment—India lags badly behind in these categories as well.

Yet, India aspires to be counted among world superpowers today, wants to sit on the Security Council with a veto power, fields a candidate to be Secretary General of the U.N.—a good one—considers itself a rising and shining powerhouse economically and strategically, has even coined the term "ChinIndia" to show that the two most populous Asian countries are as large as the European Union and the U.S., as if India and China are one economy.

Like the Soviet System

The most damaging thing India is currently doing to stay poor and divided instead of realizing its great potential of being a superpower is its politics of creating a new caste system and enshrining it in its constitution. The original constitution in 1950 created a secular and equal India for its people, except the Muslim minority. As a result of social reformers who had been speaking against the caste system for some 500 years, a superb achievement of the constitution was to deny it any legal standing.

Unfortunately, the current government in Delhi is trying to enshrine a caste-based quota system in the educational system of India where your categorization based on the caste you were born into in pre-Independent India will give you a certain quota in higher education. This is in addition to existing job quotas based on similar considerations, different standards of your qualifications and performance in tests as well as your current economic status. In other words, an attempt to bring about forced equality of result instantly.

It may be called creation of a new Soviet-type system of equal distribution based on your caste. One cannot imagine a worse selection of historically failed ideas and social and political systems based on them. This is something India should do without if it wants to be a powerhouse economy and a great society in the future. Equal opportunity in building human capital is what is needed, not forced equality of result through discriminatory quota systems for various castes and religions that would inflict much harm to the future of India.

Merit As the Measure

A much better and positive alternative is to create educational opportunities for all regardless of caste and history. An educational system that gives a full range of choices where equality of opportunity in a merit-based system leads to realization of one's potential. That is the vision of the future India deserves and not a divide-and-rule caste-based potential to break up India.

Surendra K. Kaushik is professor of finance at the Lubin School of Business of Pace University in New York and founder of Mrs. Helena Kaushik Women's P.G. College in Malsisar, Rajasthan, India.

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