Let us take it that the election outcome is not worth betting about. BJP/NDA will be the largest single party/coalition and Narendra Modi will be the Prime Minister. The dreams of the 160-170 club deep inside the BJP will remain dreams. The issue is now what will the new government do and whether it will fulfil the extremely high expectations held about its success.
Manifestos are not worth the paper they are printed on. But there are palpable signs that the incoming government needs to make sure it does not make mistakes at the very outset. News came only last week that some in the BJP wanted the scalp of Raghuram Rajan because he was refusing to cut interest rates and that the incoming government wanted rapid growth. If that is anywhere near the truth, we can write off the BJP/NDA government right away. Sack your Central Bank chief and the world will read the signal that India will have a profligate fiscal and monetary policy. FIIs, as well as a lot of Indian capital, will leave the shores of India and the rupee will fold up. It will cost two to three years of backtracking to recover from that self-inflicted wound.
So, let us hope that no such nonsense is being thought about. The incoming government faces a tough inflation problem. While it may do things on the supply side which may solve the inflation issue, it cannot make any progress without a Central Banker who has a good reputation for fighting inflation. The government, for its part, has to reduce the deficit as soon as possible. The first Budget in June 2014 may be too soon. All it can do then is to clarify the mess P Chidambaram left behind in his vote-on-account and lay bare the real extent of the hole in government finances. But by the Budget in February 2015, it should have a credible path for
reducing the deficit to zero within the lifetime of the government.
The nub of Modi?s development agenda is a massive infrastructure programme. We read about a hundred new cities, a hundred IITs and IIMs and AIIMS in many more cities. This is ambitious indeed but it cannot just be a programme of buildings and roads. India lacks the trained and high quality human resources to staff the IITs and IIMs and AIIMS. A hundred IIMs may require ten thousand academic personnel of sufficiently high quality so that they can match the performance of the best of the current IIMs. Similar for the IITs. The best of IIT graduates go abroad and it is there that they get the additional education which makes them world-beaters. None of the existing IITs make it in the top 100 universities. Thus, there is a need to upgrade the existing IITs and IIMs as well as build new ones which can match their quality.
India has spent a lot in the last decades in extensive expansion in higher education. This is indeed very important. But it has let the quality of its best institutions deteriorate. High quality education is not a luxury but it costs a lot. It requires abandoning the uniform pay structures and the practice of automatic promotion by seniority. It will require a change in the culture of the HRD ministry bureaucracy which refuses to let universities have autonomy. The recent determination of the West Bengal government to revive Presidency College by giving it extra resources and effecting a renaissance shows the way forward. Each State needs to emulate this. Thus, Maharashtra could upgrade the colleges in Mumbai-Elphinstone, St Xavier?s and some others, to make them world-beaters. We need to upgrade Delhi University and make it, once again, a top notch place.
This will require international faculties and international pay scales. It will require proper tuition fees. At present, DU students pay annual fees which would not buy them a decent meal at a Delhi dhaba. No doubt they will protest if fees are put up and call it an attack on the poor students, etc. But allowing for generous scholarships and bursaries, there is no reason why higher education should not be properly priced. As of now, dubious private universities charge a lakh or two for their courses and public universities charge in hundreds. This makes no sense. It creates an artificial high demand for public university places?99.9 % cut-offs, etc? and allows the private universities to proliferate and profit from this situation.
India has a huge unfulfilled demand for graduates and that also means for teachers who will create these graduates. In hospitals, India needs paramedical personnel and, in the courts, it needs magistrates and judges and clerks. It has a shortage of police and the Defence forces are in apathetic state, as the Navy shows.
Time to leave the ordinary behind and go for the excellent. Invest not just in bricks and mortars but in brain power and ideas.
The author is a prominent economist and Labour peer
