The rapid and sustained growth of the Indian economy over the last two decades has been one of the commendable sagas of the post cold war era. This spectacular growth is only second to that of China. Ironically, the roots of our economic reforms leading to the retreat of the Indian State from "the commanding heights" of the national economy go back to Indira Gandhi, the archpriest of socialism. Indira Gandhi knew in her bones that the days of slogans and gimmicks were over and that her days were numbered unless she "delivered goods". Consequently, she initiated the process of loosening the stranglehold of "the license and permit raj" on business and industry. Quotas and controls were on the way out. Her son, Rajiv Gandhi, who had no ideological hang-ups, moved forward by removing hurdles to growth. He launched the policy of delicensing, deregulation, and decontrol. Business and industry were allowed to work to full capacity and even go beyond. However, Rajiv Gandhi's more ambitious and much trumpeted policy of "one window clearance" was lost in the labyrinth of the bureaucracy. All the "one hundred thirty-three signatures" (were there more?) had to be obtained before the papers reached the mythical window! Then came P. V. Narasimha Rao, apara chanakya of Indian politics, with his "middle way", or the "third path" with the Finance Minister Manmohan Singh in tow. The rest is history, as they say. Narasimha Rao did not receive the accolade he deserved for guiding the nation out of the woods and putting India on the irreversible path of economic reforms, i.e., liberalisation.

Since the 1990s, Liberalisation, Privatisation and Globalisation (LPG), the three mantras of capitalist economic growth are ruling the roost in India and much of the rest of the world. In fact, the former-communist countries of Eastern Europe, Russia and China took to the capitalist path with the proverbial zeal of the new converts to `the Faith'. In this context, it must be reiterated that liberalisation and privatisation were ushered in response to economic crises at home and the make or break fiscal emergency at that juncture. Tons of gold had to be physically transported and deposited in banks in London to avert international bankruptcy. Marketisation of economics (and much else) in India since the 1990s was the outcome of our own domestic compulsions. Globalisation of markets (i.e., the WTO, IMF, FDI, pressures from the US and Western capitalism, etc.) came in soon afterwards. The pressures to integrate Indian economy into the so-called global "free market" under the American leadership are continuing and will continue into the future. It is up to us to channel the forces of LPG to our benefit. In this regard, the record so far is a mixed bag at best. Public welfare and "the sovereign" responsibilities of the State are being undermined or not receiving the priority they deserve.

As the early euphoria of the LPG waned, India and the rest of the world found that the benefits of globalisation were uneven. While millions were lifted above the poverty line over the last decade and half, the absolute number of poor people did not decrease significantly. Poverty remains as intractable as ever, the gap between the rich and the poor within countries and between them has grown and is continuing to grow. Furthermore, it is becoming painfully clear that social welfare and equity are not germane to the profit-driven capitalist growth. Marginalisation of the already marginalised millions has become the most serious negative dimension of LPG in India and elsewhere (including the developed countries). Since decline of the role and reach of the State in general and in business in particular is the foundational principle of capitalist growth as projected by the US and the West, exclusion of the marginalised and pauperisation of the poor continues unabated. Disempowerment of the powerless i.e., the unskilled, the illiterate and the rural and urban poor, and the uprooting of tribals seems to be inevitable and even inherent to the process of LPG underway since the 1990s. This contemporary tragic fallout is being reinforced by the very nature of power in general and authority of the State, in particular and also the very process of governance in India. Establishments everywhere neglect the poor and deny them their basic rights, often through fraud and brute force. All of us know in our hearts that such a state of affairs is unjust, unfair and immoral. If the State continues to fail to achieve growth with equity and the consequent deteriorating law and order situation is not remedied quickly and on a large enough scale, the inequity of growth suffered by the many will undo its benefits for the few. This can be seen as the foundation and the engine of growing mass protests by the aggrieved and the excluded, the naxalites, and the terrorists. It is officially admitted that there is a contiguous Red Corridor from north Andhra Pradesh to the Nepal border. Terrorists are also spreading their wings into Karnataka, Tamil Nadu and Kerala. Turmoil in the northeast goes back to decades before Independence. It has become worse during the last decade or more.

It is in this context that the idea of looking for alternatives to the LPG model emerged as an intellectual and institutional challenge worthy of exploration. Time and again I brought this up before the Dean of our School, Sri B. V. Rama Rao, IAS (Retd). With his enthusiastic encouragement, I began looking for an economist, who could harness the inchoate ideas and help in developing a concept paper that would restate the classic debate of "growth versus development" in the transformed global ideological context and India's own delicate situation today. Our mission was to reformulate the age-old quarrel into that of growth and development, not growth versus development. In this challenging task I was able to rope in an old and famous friend, Dr. V. R. Panchamukhi, one of India's most distinguished economists, who is "desi" to the core in the most positive sense of the concept. We interacted back and forth and came up with a draft statement of our mission to bring out a special double issue of the Journal on the search for alternatives to LPG. Unfortunately, despite my earnest efforts, I could not persuade Panchamukhi to come on board as the Guest Editor and take charge of the venture.

After several months of interaction, it was back to square one. Dean Rama Rao held my hand at this critical juncture and encouraged me to go on and find others. At this juncture it is appropriate to express my sincere thanks to Sri. N. J. Yasaswy, Member, Board of Governors,IU , for taking personal interest in the project and giving the financial support needed for such a venture. Fortunately, the second search mission came to fruition quickly. The Dean and I were able to enlist the services of an equally distinguished economist, Dr. Arif Waqif. Then, Babu, Panchamukhi and Waqif went back to the drawing board so to say. The concept paper went through further revision and trimming. `The Outline' we finally come up with is entitled "Perspectives on Indian Economic and Social Development: Search for Alternative Approaches" and is placed at the end of this issue as an Appendix.

Then, the Guest Editor Waqif took over. To identify suitable experts and to keep their responses stay on track, to keep the focus on the selected dimensions of post-globalisation India became his responsibility. We also suggested the names of some scholars. However, the key tasks of inviting, following up, assessing the draft articles, suggesting suitable revisions were taken care of by Waqif with gentle firmness and winning patience. While the contibutors had complete freedom in terms of the content, Waqif tried his best to ensure that the invited scholars/specialists took a critical view of the LPG and came up with alternative approaches in the areas they covered. While this may have met with some success, regretably all the themes mentioned in The Outline could not be covered. The language editing, formatting and technical editing were done at our end, at the School and the IUP. The final outcome is before you and it is for you the critical readers to judge how far we succeeded in reaching our goal, i.e., "to generate an objective and critical debate" on the key issues raised in The Outline.

This modest effort is only the beginning of the nation's search for alternative models and approaches to LPG that are suitable to our country. It is not as though there are no other ongoing models around the world. But most of them are puny in scale and too homogeneous to be relevant to our vast, complex and heterogeneous country. One of the older and enduring models in place is that of European Social Democracy, especially the Scandinavian variants. They have been more successful in balancing growth and equity than the liberal capitalist models of America, the UK, and Western Europe. In a recent issue of Foreign Affairs, Robert Kuttner offers an insightful analysis of "The Copenhagen Consensus" obtaining in Denmark.* Business and organised labour and the national Government in the small country have successfully ironed out a consensus whereby business enjoys flexibility to hire and fire in order to stay competitive globally. On the other hand, the workers that are laid off receive full protection of their wages for as long as two years by the social security system of the State. This amazing system called "flexicurity" (i.e., flexibility and security) has been working for long decades because of the willing and honest cooperation between the labour leaders and business enterprises. The small and highly skilled Danish workers are willing and ready to be retrained and re-retrained to stay employable in the ever changing market. They are not averse to changing jobs because that did not lead to loss in income. The whole thing works because of the underlying national consensus and the Danish ethos, Kuttner explains. He is, however, very apprehensive of the future of "flexicurity" because the national consensus has been eroding in recent years, and the growing Islamic migrants are unwilling and unable to play by the rules. It is hardly conceivable that such a delicately balanced model based on national consensus, honest cooperation between business and labour in the national interest and above all on the integrity of all concerned will work in our country.

Then there is the half-century old Cuban model built by Fidel Castro, the greatest and most enduring revolutionary leader of our times. Right at home we have the West Bengal and Kerala Models. West Bengal's days of glory belong to the past, when radical land reforms were successfully implemented. Now, the West Bengal Model has lost its sense of mission, direction and credibility. The Communist Establishment in the state itself has in turn become the target of violent protests by the uprooted and the dispossessed, the tribals and the dalits. Nandigram and Singur have rendered the West Bengal Model irrelevant today. Kerala has done better on the whole because of some unique favourable factors. The high literacy, large scale out-migration to rest of India and abroad since long, and large inflow of funds from NRI Keralites (especially from the Gulf countries) have greatly helped the economy and the employment situation in the state. But, not many are talking about the Kerala Model these days. The Chinese Model is relevant only in terms of its scale and heterogeneity. But, India cannot and should not match the ruthlessness of the State. The monopoly of power wielded by the Communist party is neither possible nor desirable. Our own dynasty politics is nasty enough. It is necessary to point out that both the economies grew during the periods of liberalisation and their growth became stunted when the two countries turned authoritarian. We have to find a workable model within our democratic and Constitutional framework. The Directive Principles should not for ever remain a string of pious goals.

In these circumstances, what should the Government of India do today to achieve "growth with equity"? Liberalisation (economic reforms) should continue so that the entrepreneurial spirit of our people ensures rapid growth. Moreover, growth can self-finance the infrastructure truly needed for business and economic development. On privatisation our approach should be selective and pragmatic. The Navaratnas and all other viable PSUs should not merely be allowed to continue, but should be encouraged to grow and compete in the market. The loss-making PSUs should be wound up quickly. But, the jobless workers should be re-trained to acquire the new skills necessary to join the workforce. In the meanwhile, the earnings of the workers that are laid off should be on par with their previous earnings for at least a year or till they are employed. This should be a shared responsibility of the State and Industry.

The most crucial first step to turn the economy around is the infusion of public investment in the agricultural sector on a massive and unprecedented scale so as to achieve a second green revolution. Agricultural productivity has to be raised significantly and on a sustained basis. Towards this end, private investment should be welcomed in the rural sector enthusiastically, especially for creating more employment opportunities in the villages. We need enormous public investment in infrastructure (roads, bridges, communications and transport). The State (central as well as state governments) should invest in sanitation, hygiene, and public health on a mammoth scale. Finally, the field of education at all levels (from primary to higher education and research) has to receive high priority. Quality education for all must be achieved as quickly as possible. We need more IITs, and universities and more and more of them should be helped to become world-class centres of higher learning and research. Private participation in education, which has been growing very rapidly, should be welcomed. But there is need for close scrutiny and regulation to ensure high standards and to curb crass commercialisation. To achieve these goals, the role and reach of the State will have to grow larger, not become less, but very different from the past. Private Public Partnership (PPP) should be a means for raising the necessary human resources and the infusion of much needed funds. PPP should not become a smoke screen for the abdication of the welfare and sovereign responsibilities of the State. Contrary to the euphoria of globalisation, "farewell" to the State is a mirage. The sovereign nation state may become less of a sovereign and much else than a nation, but it will be with us far into the future. There is no "farewell" to the State even after we have a world government!

All of the above may not add up to be an alternate model of national development at this stage. But, if all of the constituents are implemented efficiently for some years, on the scale needed and without corruption, it is not unreasonable to expect that we will move towards a working model of development suitable for our country. However, our search and struggle for alternative models and approaches must continue. Be that as it may, whatever be our model of development and/or our form of government, two very potent negatives will always be with us. Poor implementation and pervasive corruption will continue to retard and neutralise development. Unfortunately, these national traits transcend the models being tried. Let me end with Alexander Pope's well-known adage: "For forms of government let fools contest; whatever is best administered is best." However, I cannot resist the temptation to add that there are no governments without forms!

Dialogue/Debate

Let me take this opportunity to invite the learned readers to raise issues, offer comments and criticism, and suggest ways and means of enhancing the implementation of what is advocated by the various authors. Readers are invited to send their response to the particular article(s) in not more than 1,000 words, which will be published along with the author's rejoinder in the next issue of the Journal, as per the usual editorial discretion.

-- B. Ramesh Babu
Consulting Editor