Reimagining India's Public Sector

India's policies since 1991 have been to get government out of business' way. Robust public sector is needed for providing basic needs equitably

- ARUN MAIRA

THE PURPOSE OF economic progress must be to improve the lives of human beings while preserving the sustainability of the natural environment that nurtures all life. India's GDP has been growing well for many years; and may be growing faster than other countries now. However, the pattern of India's higher growth since 1991 has not served its citizens as well as other countries' growth has. A comparison reveals that not only have per capita incomes increased less, but, worse, India is a laggard in human development.

China and Vietnam did not abandon their 'socialist' strategies for development, while India's policymakers were persuaded to change course to adopt a more 'liberal capitalist' model in 1991. The contrast between India and China's and Vietnam's progress is stark. China, equally poor 25 years ago, is far ahead of India now. Even very poor Vietnam has surpassed India. (See table)

Human development is the foundation for economic growth. Contrary to Ronald Regan's dictum that “government is the problem, not the solution”, human development needs more government to provide equitable and affordable public services, in health, education, and essential utilities such as water, sanitation, electricity, public transportation, and basic financial services. China and Vietnam's human foundations have been built by government enterprises, which they have not abandoned much to the chagrin of Western economic ideologues.