On a Wing and a Prayer

Last week I called up a friend. She was on the train from Bangalore to Chennai. I was surprised. She is not the kind of person who travels by train. I asked her how long the train journey takes. Four and a half hours, she replied. So why are you taking a train when you are so busy and time is so important, I asked. Simple, she said. “It takes an hour and a half from my office to Bangalore airport. Then there is check-in, security checks, a delayed take-off because the plane arrived late, more time on the tarmac while waiting for clearance from Air Traffic Control, and then a 45-minute flight. I found it quicker to take a train. There is less stress, minimal turbulence, and I can read a book!”

This is really the story of India, and of countless surveys and papers in which Elephant India is compared with Tiger China. I have travelled to nearly every country in Asia and their airports always made me cringe in shame at the memory of Delhi or Mumbai. Changi, Chep Lak Kok, Incheon, Bangkok, Narita, Kansai, Beijing, Shanghai, Jakarta, Lahore – even Hanoi and Ho Chi Minh City and Phnom Penh – all made me wish I could return to Delhi and not have to descend dark stairs, get into a jerky bus, and enter a terminal building with a smelly entranceway to wait for baggage that is brought in on clanking trailers and thrown roughly on a creaky old belt by tired men.

Just before the elections, as my plane circled Delhi, I was struck by how similar our politics and our state-owned airline are. "We know you have a choice of other airlines (parties) but we appreciate your custom (votes)". Ageing aircraft (infrastructure) crewed by ageing staff (politicians). Endlessly stacked-up planes waiting for permission to land ... don't they conjure up a picture of endless project delays? "Don't blame us, blame the weather/air traffic control/technical faults/late arrival of our own plane" sound so much like "Don't blame us, blame our coalition partners/the opposition/the global economy/the ISI/late arrival of the monsoon".

It costs more to fly from Delhi to Kerala than to Singapore, but that's not our fault -- look at how our nasty trade partners are trying to get us to lower our tariffs and taxes so they can fill our skies with their planes. Lost baggage (promises)? Not our fault again -- it's our alliance partners. Please continue to give us your business (votes) -- we promise things will get better once we have that extra runway (a few more parliament seats). Coming off my plane, exhausted and wrung-out, I saw signs that promised a better airport by next year. Where would we be if we had not offered to host the Commonwealth Games?

Prime Minister Manmohan Singh has referred constantly to the need for more infrastructure to lift India out of the seven to eight percent growth rut. If India does not grow at a steady double-digit rate over the next decade, the elephant will stumble, and fall to its knees. Last week President Pratibha Patil referred to infrastructure as one of the key goals of the new government: “(Attention to recession-affected sectors) must be accompanied by measures to achieve a countercyclical expansion in public investment in infrastructure sectors including public-private partnerships in these sectors. Financing the investment will be a critical constraint and my Government is determined to ensure that innovative steps are taken in this area, consistent with a medium-term strategy of prudent fiscal management.”

Back in February, India’s interim budget said 50 new infrastructure projects worth Rs 67,700 crore ($14.5 billion) had been approved, and the India Infrastructure Finance Company, which will finance 60 percent of commercial loans in critical public-private partnerships, plans to raise Rs 30,000 crore ($6.8 billion) during the current fiscal year ending March 2010.

It helps if you are a Congress government with a clutch of Nehru-Gandhi names to christen every new populist spending plan. We have the Jawaharlal Nehru National Urban Renewal Mission, which has spent over Rs 50,000 crore ($10.6 billion) over the past four years on the “urban poor”. Under the Indira Awas Yojana, the government has built more than six million homes for rural poor. And now, President Patil has announced the Rajiv Awas Yojana, which aims to build a “slum free” India for the 62 million people living in shanties in the nation’s cities.

All these schemes come at a steep price. There was a huge surge in what can only be described as election-year fiscal profligacy in 2008/9. The government’s revenue deficit shot up to 4.4 percent of GDP against an estimated 1.0 percent – a four-fold increase. The fiscal deficit has alarmingly rocketed to Rs 326,515 crore ($69.5 billion) or 6 percent of GDP from the original estimate of 2.5 percent. In ordinary language, the Indian government was printing money – literally. And Reserve Bank of India figures bear this out. In the week ended May 29, currency in circulation totalled Rs 709,364 crore ($150.9 billion), a rise of Rs 96,699 crore ($20.6 billion) over a year earlier.

But what about the poor in India, the target of all this largesse? Are the country’s 1.2 billion people truly moving towards economic equity? In its Global Economic Prospects 2009 report last December, the World Bank noted that rising food prices were hitting the poor hardest. In urban areas in South Asia, it warned, poverty levels had gone up by as much as 4.4 percentage points – the highest in the developing world.

Already, 32.3 percent of the urban population and 43.3 percent of the rural population in South Asia is poor, that is, living at or below the “poverty benchmark” of 1.25 U.S. dollars (less than 60 rupees) a day. This is only slightly better than Sub-Saharan Africa. “Capital inflows have diminished, contributing to falloff in investment growth, particularly in India,” the World Bank said in a March 2009 update. “Fiscal support for slowing economies may face constraints in already quite high budget deficits.”

In her speech to Parliament last week, President Patil said new targets will soon be set for rural electrification by the new government. That will be of some consolation to Ramakanta Sethi, a Dalit boy from the fishing village of Kendrapara in Orissa. Ramakanta, who herded cattle during the day, did exceedingly well in his high school examination, studying at night with only a kerosene lantern for light. When Chief Minister Naveen Patnaik, re-elected last month with a landslide majority on a good-performance ticket, congratulated Ramakanta on his success, embarrassed officials promised to make amends for the darkness in Kendrapara. Electrifying news indeed.
(This appeared in the Khaleej Times on June 9, 2009)