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    India Looks to Finland for an Effective Educational Model

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      in World Politics

      Industrialization and Innovation Could Make the Indian Economy Takeoff

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      Labor-intensive manufacturing has historically been the best-known recipe for driving economy-wide productivity enhancement. Over time, several countries, notably those in East Asia, managed to move unskilled workers from farms in rural areas to factories in urban settings. This transition increased both individual incomes and national GDPs, ultimately boosting productivity.

      Not all countries have taken to manufacturing, though. Some of them have experienced premature deindustrialization, which economist Dani Rodrik has analyzed extensively. India’s manufacturing sector never reached full potential because of this phenomenon.

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      Instead, India ended up with the “premature servicization” of its economy. This diminished its capacity to create enough well-paying jobs for its large population and did not allow for increased productivity.

      India’s Drive to Industrialization and Innovation

      Services now comprise more than half of India’s GDP. As alluded to above, services do not deliver productivity growth in the same way as industry. Those who argue for free trade believe this does not matter. India can import industrial goods like cars and cellphones while exporting software writing and call center services.

      Such arguments for a trade-based economy fail to recognize, or in many cases deliberately omit, increasing trade deficits when a country has poor manufacturing. In a volatile and uncertain world, these deficits can become a geopolitical liability for any nation because manufacturers can shut off access to the most basic of goods. Manufacturing does not only increase productivity and enhance security, but it also creates jobs and lowers inequality. For these reasons, India has recently embarked on a reindustrialization program. 

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      The new Production Linked Incentives (PLIs) seek to attract the more reputed global manufacturers, the best brains in industry and high-quality, long-term investments to India. Under PLIs, participants can manufacture for the domestic and/or export markets. The government applied these incentives to 14 sectors, of which telecoms, cellphones, electronic equipment and automobiles are benefiting already.

      Many manufacturers station their Global Capability Centers (GCCs) in India, which has become a global base for services operations. A June 2021 report by Deloitte and NASSCOM states that 1,300 GCCs employed more than 1.3 million professionals and generated $33.8 billion in annual revenues in the financial year starting April 1, 2020, and ending March 31, 2021. Another report estimates that GCCs are likely to grow by 6-7% per year and rise to over 1,900 by 2025. It also says that these GCCs are evolving from back-office destinations to global hubs of innovation.

      Digitization is aiding this transformation of GCCs. Now, industrial design is no longer a monopoly of a headquarters in Michigan or Munich. Thanks to fast-speed internet and powerful computers, research, design and development of new machines, goods and consumption articles can take place anywhere in the world. Software is playing an increasingly bigger role in creating new hardware, driving additive manufacturing and automating factories. A process of disintermediation of manufacturing is under full swing, leading to what can be called a “servicization of manufacturing.”

      This trend gives India a unique opportunity. Global businesses need rapid, at-scale and cost-effective innovation. With its cost advantages and services ecosystem, India can provide that innovation to the world. Conventionally, innovation is associated with creating something new such as an iPhone or a Tesla. However, innovation occurs in less flamboyant ways as well. Any change in design or development that creates new value for the firm or provides an operational competitive advantage is an innovation too.

      A Unique Opportunity to Takeoff

      Global companies aiming to operate faster, cheaper and better are increasingly operating in India. The country has become more innovative over the years. India granted 28,391 patents in the financial year 2020-21, up from 9,847 in 2016-17 and 7,509 in 2010-11. Last year, the press reported that India registered as many trademarks in the past four years as in the previous 75. India’s rank on the global innovation index has moved up from 81 in 2015 to 46 in 2021. The World Intellectual Property Organization also recognized India as the second most innovative low and middle-income economy after Vietnam.

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      India missed out on the first and second industrial revolutions. The first one took place in Europe between the mid-18th and mid-19th centuries when India was fragmented and undergoing colonization by the British East India Company. The Second Industrial Revolution occurred in the 20th century, but India was ruled by the British government directly, which had no interest in industrialization. London’s incentive was to use India as a provider of raw materials and as a captive market for finished British industrial goods.

      After independence in 1947, India failed to industrialize unlike its East Asian counterparts. It chose a Soviet-style planned economy that was closed and protectionist. Only in 1991 when the Soviet Union collapsed did India embrace market reforms and liberalized its economy.

      Today, India is growing at 9% and its GDP is about to touch the $3-trillion mark. With strong global tailwinds, India can embrace industrialization and innovation, and finally enter what American economist Walt Rostow has termed the takeoff stage of economic growth.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      The Politics Behind the Hijab Ban

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      Political discourse in India is currently focused on the denial of some Muslim female students to their constitutional right of choosing to wear a hijab in classrooms at pre-university colleges — the equivalent to high schools.

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      The ruling dispensation in the Indian state of Karnataka has invoked Section 133(2) of the Karnataka Education Act, 1983. This section says that the “State Government may give such directions to any educational institution or tutorial institution as in its opinion are necessary or expedient for carrying out the purposes of this Act … [and] such institution shall comply with every such direction.”

      Claims

      On February 5, the ruling dispensation in Karnataka led to a letter being issued by Padmini S.N., under-secretary of the Education Department of Karnataka, requiring institutions to enforce particular provisions.

      First, as per the letter, students must wear a uniform that has been selected by an authority, such as college committees or administrative boards. Second, if the administrative committee has not issued a mandatory dress code, then “clothes which disturb equality, integrity and public law and order should not be worn.” Third, the letter cites the case of Asha Ranjan vs. State of Bihar and Ors in 2017. It claims that the Supreme Court “accepted the balance test where competing interests are involved and has taken a view that individual interest must yield to the larger public interest.” Fourth, the letter says that the ban on wearing a hijab inside educational institutions is not in violation of Article 25 of the constitution.

      Contesting the Claims

      Yet these claims are contestable. First, school management could introduce a uniform for students that is guided by the needs of education and the constitution. Education is concerned with the teaching-learning process. The sartorial choices of students or even teachers do not have any relevance to this process. In fact, preventing students from choosing what they want to wear may impede the fundamental right to education. Further, it cannot be logically argued that the sartorial choice of students impedes the integrity of the teaching-learning process.

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      Second, it is absurd to claim that clothes can impact equality, integrity and public order. Education is concerned with enhancing the ability of students to participate in social life after they graduate. This includes joining the labor force, participating in the political process, and building and sustaining communities. Inclusive development does not require all people to be part of sartorial (or any other type of) homogeneity, but it does need their participation in socially productive activities. Homogeneity is antithetical to equality with diversity. After all, the motto of India is “unity in diversity,” not unity before diversity.

      Furthermore, claiming that sartorial choices such as wearing a hijab will disrupt public law and order effectively serves as a dog whistle for vigilantes. When these vigilantes engage in actions that undermine public law and order, the original claim is thereby validated.

      Third, the Supreme Court, in the case of Asha Ranjan vs. State of Bihar and Ors, argued that there could be conflict between the legal rights of two individuals. In such an event, the interest of the wider community would be used to determine whose rights are prioritized. Yet the individual sartorial choices of students or teachers neither undermine the rights of others nor affect the public. Thus, in this case, the balance test is not applicable since there are no conflicts between individuals with regard to their rights as guaranteed by Article 21 of the constitution.

      Fourth, seeking to relate the ban on wearing a hijab (or the clothing choices of students or teachers) solely with Article 25 is legally untenable. In fact, if this standalone appeal to Article 25 of the constitution is made, then it leaves the door open to define religious or cultural practices as being more or less essential to the definition of a religion or culture. Doing so in this current case would directly impact the right to education of some Muslim female students.

      The key issue is whether the sartorial choices of students undermine the integrity of the teaching-learning process. The only logical answer is no. The choices of students and teachers are connected to the right to seek education under Article 21-A and the right to dignity under Article 21 of the Indian Constitution. The right to practice religion or culture, as guaranteed by Article 25 in the present case regarding sartorial choice, does not subvert the teaching-learning process. Therefore, Article 25, when read with Articles 21 and 21-A, demonstrates the legal untenability of the ruling dispensation in Karnataka.

      Why Now?

      But there is a fundamental question that arises from the ban on wearing a hijab. Why are such issues being raised in the first place? On the one hand, it is undeniable that the ruling dispensation in Karnataka seeks to trigger political debate over social issues, since it may deflect public attention from evaluating the state government’s record over other matters.

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      On the other hand, we believe there is a broader background to such moves. Policy initiatives that favor elites and put others at a disadvantage require the latter to provide at least implicit “consent.” This may be problematic if the interests of elites are equated with “national interests” through the deployment of ultra-nationalism. This process of “consent” may be reinforced if divisions emerge among non-elites by stigmatizing and labeling a section of non-elites as the “other.” In India, this process of stigmatization involves the furthering of communalism, which is the political manufacturing of social divides along religious lines.

      This manufactured rise in social divides, coupled with other factors such as the impact of the COVID-19 pandemic, has led to an economic crisis. Rising unemployment, inequality and inflation cannot be overcome with the “toolkit” available to the government. This policy toolkit involves the use of ultra-nationalism and communalism where the pot is always set to boil, causing social tension. The repeated use of such measures has started yielding diminishing results for the government, but it appears to have no alternative policy available.

      The way out of this impasse requires a different framework. This needs to involve public investment, fiscal policy undergirded by progressive taxation, and industry policy backed by mobilization and allocation of resources by the government. Such policies of inclusive development must be part of a process of recentering the constitutional imperatives of secularism, gender and social justice, and democracy.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      India Disappoints Its Friends and Admirers

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      India’s abstention in a recent vote at the UN Security Council over Russian threats to Ukraine raises serious questions over India being a key ally of the West in the years to come. Indian leaders failed to stand up for Ukrainian sovereignty because of India’s close relations with Russia, a major supplier of military equipment.

      For anyone who wants to explain away India’s conduct at the United Nations as an act of national interests, there is more to consider. India is sliding deeper into Hindu — as opposed to a diverse Indian — nationalism, diminishing its ability to be a long-term partner for Western nations.

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      India’s slowing economic growth, declining investment in its military capabilities and social unrest have prevented the country from modernizing its army and fulfilling its strategic goals. But it is the ideology of its current leaders that is jeopardizing the notion of India as a dependable partner of the US in the Indo-Pacific region. 

      Instead of investing in human capital and health care, the focus of Prime Minister Narendra Modi’s government has been on rewriting history through crowdsourcing. Instead of further opening the Indian economy through policies and reforms that would boost growth, protectionism and regulatory policies are rising. India is slipping on the global freedom and democracy indices, with Freedom House downgrading it to “partly free.”

      “Undivided India”

      Leaders of the ruling Bharatiya Janata Party (BJP) continue to mobilize India’s majority Hindus to vote for it by targeting religious minorities, particularly Muslims and Christians. They describe Hinduism as an Indian religion, while Islam and Christianity are denigrated as “foreign” faiths transplanted onto India’s soil. Extremist Hindu leaders, including some from the ruling party, have even gone so far as to call for genocide against 200 million Indian Muslims. 

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      A 2021 Pew Survey on “Religion in India” demonstrated that tolerance for other faiths remains strong within Indian society. But a larger number of the majority (Hindus) now see religion as the core of their identity and support calls for a Hindu rashtra (state). This creates a dilemma for relations between India and other countries.

      For example, Pushkar Singh Dhami, the chief minister of the state of Uttarakhand, which borders Tibet and Nepal, was embroiled in controversy for something he posted on Twitter six years ago. The tweet showed a map claiming South and Southeast Asia as part of an “undivided India,” known as Akhand Bharat. In December 2021, an Indian broadcaster showed the entire region from the Middle East through South and Southeast Asia as belonging to Akhand Bharat, representing the reunification of territories influenced by India during ancient times.

      This undermines India’s projection of itself as a pluralist and open society, where minorities were respected, not just tolerated. For six decades after independence in 1947, India’s pluralism created a groundswell of respect, goodwill and admiration throughout the free world. Even India’s non-alignment during the Cold War did not interfere with its positive image. Most Americans appreciated Indian democracy and diversity and showed understanding when poverty-ridden India preferred not to side with the United States against the Soviet Union.

      Things Have Changed

      But things have changed since the end of the Cold War. India has made significant progress in reducing poverty. For two decades, there has been talk of India as a rising power. Americans have expected India to boost its economic growth, modernize its military and play a bigger role in confronting China. In 2010, President Barack Obama declared relations between India and the United States as the “defining partnership of the 21st century.”

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      That desire keeps getting thwarted by India’s leadership, particularly Prime Minister Modi and his allies in the BJP. Thus, India’s economic growth has slowed down, even before the impact of the COVID-19 pandemic, and is unlikely to recover quickly. More significantly, India continues to expand trade with China, reaching $125 billion in 2021. This is despite China’s military pressure on India along their disputed border. That should lay to rest the expectation of India confronting China anytime soon.

      Moreover, the commitment to democracy, human rights and liberal values, which made India a natural Western partner, appear under increasing threat.

      Americans who have spent the last few years praising India also need some appraising of India. It might be time to acknowledge that India’s performance has been underwhelming to merit the kind of expectations that have formed the basis of recent US policy.   

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      India’s Highway Construction Is in the Fast Lane

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      When experts look back at the early 2000s, they will observe that India embarked on a construction spree to develop its transport infrastructure. The country is emulating what the United States and Europe did in the previous century and what China and East Asia have done more recently. Traditionally, India focused on railways. For the last 20 years, roads have been the priority. Now, the country is also focusing on its 116 rivers and long coastline to develop commercial waterways. 

      As is well known, various factors contribute to a nation’s development. The most fundamental is the availability of food and water for the population. Here, India has had some success since its independence in 1947. In health care and education, India can and must do better. India also needs to improve safety and security for its citizens and improve the rule of law. The factor most important for India’s development is perhaps transportation because it has the greatest multiplier effect on the economy. As a result, transportation has the greatest potential to improve the lives of ordinary citizens.

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      Transportation infrastructure, such as railways, roads, air traffic and waterways, are the arteries of a country’s economy. The German economy was built on the backbone of an outstanding railway system and the legendary autobahn. The US is knit together by a crisscrossing network of freight trains, interstate highways and airports. Advanced economies like Japan, South Korea, Switzerland and the Netherlands are known for their evolved infrastructure.

      In recent years, China has set the standard for implementing infrastructure at a scale and speed unprecedented in history. Most economists credit spectacular rates of economic growth to Chinese investment in infrastructure. India is betting that building good infrastructure will boost growth, create jobs and raise the standard of living for hundreds of millions.

      Railway and Highway Infrastructure

      According to a 2018 report by NITI Aayog, the premier policy think tank of the Indian government, 59% of all freight in India is transported by road, 35% by railways, 6% by waterways and less than 1% by air.

      On March 31, 2020, India’s railway track length stood at 126,366 kilometers and, on March 31, 2019, the length of national highways was 132,500 kilometers. Per 100 square kilometers, India has more railway tracks and highways than countries like the US and France. This does not necessarily mean India is doing well. South Korea and Japan have over four times the highway length per 100 square kilometers.

      Instead of the density of infrastructure per unit area, density per population size seems to be the more accurate metric. When it comes to infrastructure per million people, India fares very poorly. For instance, Indonesia’s population is merely 20% of India’s, but its highways are twice as long as India’s. South Korea’s population is a tiny 4% of India’s, but its highways are thrice as long as India’s. The top two stars on the infrastructure front are the US and Australia, followed by Japan and France.

      India’s highway network is inadequate for the country’s needs. Highways comprise 1.94% of India’s total road networks but carry a staggering 40% of total road traffic. This means that not only do they suffer high wear and tear, but transportation continues to be a big bottleneck for the economy. It is little surprise that India is finally investing in transport infrastructure.

      After independence in 1947, India underinvested in infrastructure. Two centuries of colonial extraction had left the country with limited resources and almost unlimited public needs. In its early years of independence, India struggled to feed its masses. There was little money to build railways, roads, ports, airports and transport infrastructure.

      India also lacked the expertise to build such infrastructure at scale. Planners, engineers and skilled labor were all in short supply. The nation did not have enough knowledge of transport technology either. There was another challenge in a densely populated democratic country. Infrastructure projects result in the displacement of large numbers of people. Many resist, others negotiate hard and still, others approach their local politicians who start resisting these projects to win votes.

      India’s varied geography also imposed daunting challenges for developing infrastructure. Largely flat countries like Australia and France could focus on railways, which run twice as long as their roads. Mountainous countries like South Korea and Japan have built more roads than railway lines. While plains and plateaus in India are crisscrossed by railway lines, roads are the means of transportation in its extensive mountainous regions.

      A New Focus

      Over the last 20 years, India’s focus has shifted to roads. This began under the coalition National Democratic Alliance (NDA) government led by Atal Bihari Vajpayee of the Bharatiya Janata Party (BJP). Although this government lost the 2004 election, NDA’s vision set in motion transport infrastructure development. In 2014, the BJP-led NDA returned to power and accelerated the building of highways across the country.

      NDA-initiated highway construction was kickstarted by the Golden Quadrilateral, a project connecting India’s four biggest cities: Delhi, Mumbai, Chennai and Kolkata. This boosted economic growth. Since NDA returned to power, India has embarked on Bharatmala Pariyojana, an ambitious project to connect the entire country through a network of highways like the fabled interstate highway system of the US. Even remote regions such as the northeast and Jammu and Kashmir will be covered.

      In the past, India did not measure highways as per international standards. This meant their growth could not be measured and compared easily. To quote management guru Peter F. Drucker, “If you can’t measure it, you can’t improve it.” Since 2018, the measure of highway length in India has been aligned with international standards. While impressive figures on the growth of national highways have been published, their interpretation now is clear and consistent.

      There has also been a steady increase in highway construction rates. In March 2021, it reached 37 kms/day. For the 2020-21 financial year — India’s financial year begins on April 1 and ends on March 31 — road construction averaged 29.81 kms/day. In 2014-15, the rate was 16.61 kms/day. Six years on, the road construction rate has almost doubled and is the fastest India has achieved since independence. The credit goes to Nitin Gadkari, the minister for road transport, one of the star performers of the NDA cabinet. In March, he claimed that India had secured the world record for fastest road construction.

      India’s Evolving Waterways Make a Big Splash

      The oldest civilizations have originated and flourished near major rivers for a simple reason. They provide fresh water, a fundamental human need. Rivers also provided an easy way to travel and transport goods before the advent of roads and railways. Even today, commercial transport of goods via rivers, lakes and oceans continues to cost less than via land. While container ships regularly carry goods across the high seas, most countries no longer use their rivers very well. The US, Australia, Japan, Russia and China are among the few countries that use their rivers and inland waterways well. 

      India has 116 rivers. Potentially, these could provide 35,000 kilometers of waterways and should be tapped. The government set up the Inland Waterways Authority of India in 1986 for “development and regulation of inland waterways for shipping and navigation.” In spite of tremendous cost advantages, waterways’ commercialization received little attention over the next 30 years. In 2016, the NDA declared 111 rivers across India as national waterways, a quantum leap up from five. By 2020, the government operationalized 12 of these waterways. The journey to suitably develop the remaining 99 will be a long and expensive one. However, this investment will cut logistics costs tremendously in the long run and boost India’s competitiveness.

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      Gadkari points out that the cost of logistics in India is 18% of the total cost of production. For China, this figure is 8-10%. Notably, waterways account for 47% of total transportation in China, compared to 3.5% in India. As waterways develop, so will commercial activity along their banks and lead to job creation.

      India has another major underutilized natural resource. It has a long coastline of 7,500 kilometers spread across 14 states. To develop ports and coastal transportation, the government has launched the Sagarmala project. This could achieve what the Golden Quadrilateral did for roads in the past. By 2025, the government aims to increase the share of waterways transportation from 3.5% to 6%, reducing logistics costs, boosting exports and generating 4 million new jobs.

      The Road Ahead

      About 53% of India’s population is under 25 years of age and many of them need jobs. Employed young people are more likely to send their children to school. They are likely to eat better and live longer. So far, India’s growth rate has not exceeded the job creation rate. For social and political stability, the government needs to create jobs. 

      While India’s economy continues to grow, the pace of growth does not match the employment needs of India’s young population. Building infrastructure is one of the best ways to generate employment because of its massive multiplier effect in an emerging economy like India. The country needs competent ministers and bureaucrats with domain expertise such as Gadkari. Key ministries overseeing power and finance in New Delhi and India’s state capitals should emulate this model.

      Along with building infrastructure, India must reform its arcane laws of colonial and socialist heritage to boost economic activity. The government must also reform education and vocational training in collaboration with industry to raise the skills of the workforce, improve employability and increase productivity. This is a tall order, but if India can get its house in order, then domestic and foreign investment would flow in. Then, the country would finally be able to join the Asian tigers as one of the world’s fast-growing economies.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More