INDIA: DEMOCRACY VS DEMOCRATISATION
The shrill debate over democracy in India is drowning out the transformative democratisation of access to basic services. EPISODE #15
Hi Everyone,
A very happy Monday to you.
Last week was the first official anniversary of the covid-19 pandemic, which originated in Wuhan, China.
The bad news is that the virus is reviving once again in India. To a large extent it seems to be due to people cutting corners on personal safety—particularly with respect to wearing a mask. The vaccine seems to have lulled most into believing that all is well, when the reality is that the vaccine is not an anti-dote but merely reduces the probability of an infection from this remarkably resilient virus. Keeping fingers crossed.
This apart, Indian democracy has been brought under the scanner by some voluble critics. The debate is driving social media at the moment. I weigh in on this vexing topic in this week’s post and argue that all of us, including the critics, may be missing the woods for the trees here. The spotlight should be on the democratisation process the outcome of which is democracy. Not the other way round.
A big thank you to Rahul Sharma for this week’s picture. He is gifted with a remarkable eye. More power to him.
Once you read this post, please, please do drop me an email with your thoughts or ping me on twitter at @capitalcalculus.
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Read on
New India, New Access
Over the last few weeks India has been called out, both internationally and domestically, for what these critics believe is an apparent erosion in accepted standards of democracy.
Without being drawn into this deeply ideological and binary debate I would just like to flag three points: One, not to paper over the warts but perfect democracy exists only in theory. As long as fundamental freedoms are not jeopardised (like it did when Emergency was imposed in 1975) it will always be a work in progress; check out the ongoing upheavals in the oldest democracy in the world. Second, one of the best measures of a democracy at work is the conduct of free and fair elections—and these continue to play out to schedule at various levels in India, including states and municipalities. Thirdly, the dharma of democracy is enshrined in the Constitution of India, which till I last checked is very much alive. Yes, it can always be better. But it is certainly not MIA.
Drawing on my eternal optimism about India, the stand out issue is the growing democratisation of access to basic services, which in turn ties into a demographically youthful India realising its aspirations.
To me it is this new idea of India, which holds a mirror to the rapidly transforming polity of the country. One which prefers empowerment over entitlement: Give a person fish and you feed them for a day; Teach a person to fish, and you feed them for a lifetime.
Exclusive to Universal Access
To support my argument I will focus on the access enabled to three such services and its transformative impact: access to electricity, drinking water and credit.
Through painful personal experience (which mirrors what most of us baby boomers experienced growing up in India) one has come to realise how denial of access to these basic services put one back so many years. Worse, it equated access with privilege which only further reinforced the social and economic inequalities. Together with low levels of literacy, especially given that we still have a large numbers of first generation literates, it is easy to imagine how the dice is loaded against those living at the bottom of the pyramid. Particularly when you are denied access to basic services.
Electricity
It was only in 2018 that all the 597,464 census villages in India were finally electrified. This D-day in the socio-economic history of India happened when Leisang village in Manipur was added to the national power grid.
The big question to ask is not why it took so long. Instead it is what it cost those who were denied access?
In Pre-Independence India electricity was a privilege. Nothing changed dramatically after 1947 either. Like our erudite Prime Minister Manmohan Singh who had to study under a village street light most of my generation born in Independent India too had to battle similar conditions. Even New Delhi, the country’s capital, had to constantly live with power outages. (In fact, it created a business model for gen-sets and inverters as a back-up source of power.)
It is a no-brainer that electricity serves as a catalyst for economic growth: no power, no economic activity. But what is often less obvious is what it does for the empowerment of women. A World Bank study (those who wish to take a closer look at the paper, click here) explored this causality and found:
“In households with electricity, women spend less time on household chores and are more likely to participate in income-generating activities, and girls have higher educational attainment.”
To be sure, like the study concludes electricity is a very important necessary milestone but not a sufficient condition in itself to guarantee empowerment of women.
Drinking water
Like electricity, access to drinking water is another privilege. Needless to say that the odds stack up as you go down the ladder of economic empowerment.
Lack of access to drinking water, as we all know, leads to diarroheal diseases which in turn is one of the primary cause of death, particularly among children. A recent study by the Indian Council for Medical Research uncovered that nearly a tenth of the deaths of children under the age of five in India occurred because of diarrhoea. This could be mitigated dramatically by providing access to drinking water through a tap.
Once again the burden of coping with this lack of access to this basic service falls upon the women in the household. They have to trudge miles in search of water often causing hip and spinal deformities.
We have already seen that access to cooking gas has had a transformative impact on women empowerment. Access to drinking water would generate even greater transformative benefits. More importantly, lack of it exacts a very heavy cost.
Yet the drinking water story is most depressing. The dashboard (to access please click here) maintained by the Ministry of Drinking Water and Sanitation reveals that till two years ago less than 2% of the people living in rural Uttar Pradesh—at 200 million it has the largest population—had access to drinking water through a tap.
Financial Inclusion
This question is to baby boomers: Do you remember the first time you tried to get a bank loan?
I do. The moment left me scarred.
This was when I had just started to work and the salary was in three digits! An opportunity had opened up in an upcoming housing society to own a flat. But the problem was that I didn’t have seed capital. I tried the banks—then almost everything was public sector owned—and was told that I would have to put up a collateral (an oxymoron no doubt). If not I could avail a short-term personal loan with an interest tab of over 25%! Today we call this usurious. Long story short I had to pass on my dream to own a home.
Fast forward to today. I would get that loan in a minute and be off on my aspirational journey. Not because bankers have become reckless. On the contrary they are more conservative. It is just that they have had a mindset rest on the metrics for lending: it is no longer just based on collateral.
The big bet today is the so called flow-based lending. Now AI driven algorithms crunch data on my income streams (which if it is a gig economy will have multiple sources) and spit out my eligibility terms.
And for those starting out, like I was many moons ago, they also resolve the proverbial chicken and egg problem: I couldn’t borrow as I did not have collateral or credit history. Rapidly spawning FinTechs are unlocking small affordable retail credit by tapping flow-based lending norms and customising the ticket size to each individual. Which is how it should be. So no longer does one size fits all.
The Jan-Dhan yojana which has added nearly 500 million to the financial system is only the beginning. As these segments begin to trade-up it is these fintechs who will help them scale their next steps on the ladder of aspirations.
In the final analysis then it is clear that access to basic services is the first step in transforming India. The good news is that it is all beginning to happen. Exactly why our polity is changing too. The bad news is that it has taken us seven decades to realise: another story, another time.
Recommended Reading
There is no doubt that many of today’s social influencers are social media creations. I came across this nice read in the Wall Street Journal which shines the light on their behavioural peculiarities, especially the one’s who drive financial markets. Left me bewildered.
“Many of today’s influencers have appealed to their followers precisely because of their irreverence and disdain for financial-industry norms. Their followers often profess they couldn’t care less about the depth of analysis behind a trade. If their icon is buying something, they will throw money at it, too.”
If you wish to read the piece please click here.
If you reside in North India then it is the time for Holi—the festival of colours. Given the resurgence in covid-19, request we move this year’s celebration to the virtual space, like we have for most festivals in the last one year. Happy Holi!
Till we meet again next week. Stay safe.
We the baby boomers had sacrificed tremendously. We struggled for basically everything. But now we are so fortunate that we can really see the positive transformation of our country. Since 2014 the pace of changed has accelerated. More transparency in Govt/public affairs has been a big boon. Tecnology and social media is contributing immensely. Atleast we are enjoying the exciting times. Wonder if this had happened when we were 20yr old.
Suggestion.....not able to share thearticle through whatsapp....all other modes are popping....is it so or I am missing something