Economic deforms: Blame the Bentley, don’t fix the road, school or hospital

So, on the fact of this trinity of sins, the Prime Minister is spot on. Greed, ostentation and cartelisation, which is a kind of corporate gangsterism, do not merely exist, they have been growing, as they had always been expected to, in a long growth phase. But while you cannot argue with the Prime Minister on his facts, you can certainly do so with the way he interprets them.

Only in a movie can one afford to look at a bunch of sins as just sins. But since real life is more complex, you need to be less judgmental on our collective failing than Kevin Spacey as the deadpan psychopath in the 1995 classic Seven — where he used a sledgehammer, literally, to make the point. The current interplay of greed, ostentation, ambition — and envy and anger makes for a bewildering, sometimes unnerving mix, which is both a challenge and an opportunity for an instinctive reformer. And since that definition fits the Prime Minister perfectly, it would be disappointing if, pushed around by party men of lesser intellect or commitment, or sickened by a daily dose of pink-paper triumphalism, he were to begin to unravel his post-1991 view of investment, growth, profit and the unleashing of individual and corporate enterprise.

If you’ve known Manmohan Singh long enough, you’d say chances are he is neither losing nerve nor is he making an intellectual or philosophical course-correction. He is expressing political concern at another emotion that is rising in the wake of this greed, ostentation and, I repeat again, pink-paper triumphalism — which is not confined merely to some business newspapers. One look at the faces of business-channel anchors — which are mostly watched in Mute — around 11 am on a trading day and you can tell whether the market is up or down. It is almost as if it is immoral and unfair for the markets to go any place but up, gas balloons, soft toys, high-fives, even specially printed T-shirts, all mark the scaling of each new Sensex peak. The rise in the number of India’s billionaires — all mostly notional since these are purely market-cap-based and can change as fast as the smile on the face of the anchor — is celebrated as a global conquest, as some kind of a cricket World Cup victory.

The emotions this generates at the other, much more populous end of the spectrum, is envy. And that is what the Prime Minister is worried about. He has too much intellect and integrity to either lose it so completely or to make a totally cynical about-turn. As shown by The Indian Express Opinion Editor Saubhik Chakrabarti’s fascinating report today on the themes of the 529 speeches delivered by the Prime Minister in his three years, his belief that economic freedom unleashes enterprise which creates wealth and jobs and ultimate trickle-down, is all there. But he has also said often that the poor in India are far too many and poverty too deep and complex, to be left to market forces. He sees a role of the state there. Three years in the saddle, could it be, could it just be that he is getting so frustrated by his inability to improve the delivery processes of India’s governance and the state’s abject failure in intermediating that trickle-down, that he is now speaking out just in exasperation?

Nobody, definitely not the Prime Minister, doubts that growth is the best news India has had in decades and its benefits are reaching to most sections of our society though in a far from perfectly equitable manner. Our tax collections are at record levels. For the first time in our history, budgeted tax targets are being revised upwards and get surpassed consistently. The Central and the state governments are richer than ever before. It is just that partly because of our inability to cut through a politico-bureaucratic Maginot line and partly because of coalition deal-making, the ability of the state to spend this money has not improved any more than fractionally. And that, too, only in better-governed states.

While India’s resurgent enterprise creates new wealth and fills the state’s coffers with taxes, it is the government that is failing to take the benefits where they are needed. So those left out are angry and impatient and, while you can take a judgmental view on what you may describe as an “insensitive, inadequately socially conscious” media, it does take the images of that fast-prospering, but much smaller India, to the larger Bharat that is languishing and is no longer willing to put up with its fate. The result is anger with the state, there’s why anti-incumbency, and also envy with the new billionaires, ESOPs, Bentleys, $100,000 per year starting salary class. Today’s politics is a conflicting inter-play of two strong emotions, greed and envy. Those benefiting directly and rapidly from growth want the train to only climb higher, and faster. Those not on the train yet, are asking what the hell is going on, and voting with their feet.

What is the answer then? Kill Growth? Re-nationalize wealth as Indira Gandhi did in our Socialist, Stagnating Seventies when growth emerged under 3 and inflation reached 17? Can you decree lower salaries, the size of marriage parties? Can Priya Ranjan Dasmunsi ban TV Channels for “vulgar” display of wealth besides flesh, which usually gets his goat?

The challenge of today’s reformer is to find a balance between these two emotions. To speak to the rich, OK, as the Prime Minister did this week, and to also speak to the poor. But in the latter case, you have to back your speech with actions, improve the delivery of government services, roads, education, health and, most of all, power.

You have to expand the availability of affordable higher education not by 20-30 percent but ten times, and very soon. More than the display of wealth, what causes envy and frustration is the lack of opportunity and the disparity it creates between you and your neighbour whose child may have cracked the lottery of some JEE for IIT or a medical college or CAT for IIM and thereby joined a tiny new charmed circle, its size so severely limited by a criminal supply constraint created by a non- functional state and a divisive, ideological, game-playing HRD Ministry.

Can the Prime Minister, or this government do any of this? It is one thing to lecture the chambers. The corporates turn out in their finery to listen to prime-ministerial sermons twice a year and then go back to their business of competing, investing, growing and creating wealth, and thereby greed and envy. It is the responsibility of the statesman and the reformer to provide the balance and equanimity and to be the honest, and effective intermediary.

PS: To those businessmen who say that the PM’s words were too strong, I can’t help but quote Kevin Spacey’s character in Seven. Questioned by the police on his string of murders of those who have “sinned”, he says, “Wanting people to listen, you can’t just tap them on the shoulder anymore. You have to hit them with a sledgehammer, and then you’ll notice you’ve got their strict attention.”