Making India Great Again: Learning from our history

Sandeep Sinha

The past is glorious, more so if viewed after an interregnum of rule by invaders and colonial powers. But the gap also provides for objectivity, a more dispassioned view of the crest and the trough. The history of India is as much about the rise and fall of great kingdoms as also about the absence of a sense of nationalism in the modern sense for most of the land was divided into fiefdoms and principalities unless united by a strong ruler. The unity was imposed and frittered away once the empire disintegrated for want of enduring institutional mechanisms, the absence of a law of primogeniture or succession in the kingdoms.

The frequent foreign invasions had as much to do with India’s fabled riches as with the desire for expanding territorial limits. The attacks by Ghazni and Nadir Shah were also about the wealth of Somnath Temple, Peacock Throne and the Koh-i-Noor that went on to become the jewel in the crown of the British empire.

Colonial rule saw the economic decimation of India, with British policies taking away its self-sufficiency, integrating it with the industrial revolution in England, taking away its raw material for manufacturing goods in the factories of Manchester that found their way back into India. It was against this backdrop that the call for Swadeshi and boycott of foreign goods was given to awaken national self-esteem and hurt the British economic interests.

The approach to wealth was also shaped by attitudes. Wealth accumulation was not looked down upon in the West and Robinson Crusoe, the desert-island entrepreneur, remained a role model.

The authors say that the ability to create wealth has much to do with building robust institutional networks of information and trust and that the indifference of the state to business communities has been a bottleneck. There has never been any shortage of innovation in India but the ability to learn from own experience has been lacking. A learning ecosystem that could be used to leverage success is what is needed to unlock the huge potential that India has.

Never was the contrast more visible than after the arrival of the East India Company which did not initially have a level playing field but changed the way business was done with their superior systems. They were more systematic in collating information in a scientific manner and using that to optimise productivity.

The book examines how many of the social groups in India had a rather low cost of living — thriving on just daal-chawal and a generous dollop of ghee — and looks at the relationship between information and productivity in modern India and the special role played by institutions in systematising information. The failure to systematise information was directly connected with the famines in Bengal, once the richest provinces.

The authors dwell on the methods of using information in three sectors deemed to be important to any economy — banking, technology for making iron and steel and pure science in so far as the discipline of mathematics is concerned.

The chapter on banking and value creation through the relationship between the Nawab of Bengal, Murshid Quli Khan, and Manickchand, that helped in creating synergies, is fascinating. India’s history tells us that we did not lack capital for economic development but lacked the ability to use capital effectively. The Sri Padmanabhaswamy Temple in Kerala revealed a storehouse of wealth estimated at Rs90,000 crore. Innovations that are institutionalised over time are key indicators of this progress.

The book looks at the iron and steel industry in India, how despite producing some of the best steel in the world, it was unable to scale up production to match the demands of an industrialising world. Also, India was unable to capitalise on its progress in mathematics.

Lack of institutional support is also behind uneven distribution of skills in India. A college dropout like Bill Gates was a success because of institutional support system. Knowledge was important but knowledge systems remained distant for Indians in the past, hampering growth.

Development is an ongoing process with every event having its progressive significance, providing an opportunity to learn, improvise and innovate. It could help meet goals through a planned approach. The authors suggest the following steps: ensuring security of property through systematisation of land records and creation of unique IDs; improving the learning curve; creating a high order of skills among the working population; building resilient knowledge institutions; and improving productivity by scrapping archaic laws and perverse incentives.

In India, the problem is of outreach, how to percolate the benefits to the teeming millions. Systematising information for the purpose itself is compounded by problems like illiteracy and ignorance. But it can be no excuse for not making an effort.

The past helps understand the present and prepares us for the future. The book is a work of great scholarly acumen providing contemporary insight into the impediments in progress.