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The playwright Neil Simon once wrote that there are two kinds of people in the world,
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the watchers and the doers, and the watchers sit around watching the doers do.
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I've always been the kind of self-tommented watcher who watches himself watching doers
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and watches himself watching himself watching, and so on down the line recursively.
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Now, that distinction of course is simplistic.
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Most of us toggle between watching and doing, and context matters.
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In the context of national affairs, for example, I am a watcher more than anything else, meri
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kya haiseyat ki main kuch karu.
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I do have the conceit that in some small way, through this podcast more than anything else,
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I am affecting a small part of the discourse, but otherwise I am irrelevant to things.
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And that irrelevance, a shared sense of irrelevance, is one reason that the dominant emotion in
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our great democracy is apathy.
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Most of us have figured that the world may go to hell, but we can't make a difference
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This is rational, and yet society progresses because some people refuse to be apathetic.
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They see what is wrong, they say what is wrong, and even more than that, they try to fix what
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They are the doers who shape our future, and me, I'm just sitting here watching the wheels
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Welcome to The Seen and the Unseen, our weekly podcast on economics, politics, and behavioral
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Please welcome your host, Amit Varma.
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Welcome to The Seen and the Unseen.
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My guest today is a remarkable Naushad Forbes, an industrialist, a scholar, a writer, a public
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intellectual, and an activist for a better India.
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Naushad has been a consulting professor at Stanford from where he got his PhD and studied
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He is also the co-chairman of Forbes Marshall and has been president of the CII.
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He's been a prolific columnist as well, and recently came out with the book, The Struggle
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and the Promise, Restoring India's Potential.
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And Naushad's efforts aren't just restricted to words.
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As part of Indian industry, he's been talking to government right from the heady times when
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Manmohan Singh first became our finance minister.
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And what I liked about this book, and I loved about my conversation with him, is that Naushad's
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insights into how to fix a country come from decades of hands-on experience.
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He's grown up in the miserable seventies, lived through the emergency, felt the buoyancy
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of liberalization, he's played the long game, and he continues to play the long game.
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I tried to capture some of the sweep of this journey in my conversation with him, and I
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think you'll enjoy it as much as I did.
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But first, let's take a quick commercial break.
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In the course itself, through four webinars spread over four weekends, I share all I know
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Being a good writer doesn't require God given talent, just the willingness to work hard
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and a clear idea of what you need to do to refine your skills.
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Ashad, welcome to the scene and the unseen.
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So I want to begin by asking you a question, followed by telling you how much I enjoyed
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You know, a lot of these areas I have spoken about with previous guests, thought about,
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written about and all of that.
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But you did such a great job of putting it all together and presenting your kind of vision.
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And the one thing I was struck by is how incredibly positive you are in this.
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Like I am known in some circles as a bit of a pessimist.
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You know, I think our mutual friend Ram Guha would probably be more on my side on this.
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I certainly believe that we are headed for a very difficult time and things will go down
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a long way before they come back up.
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But I've also speak to guests who are also very optimistic.
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Like I had a recent episode with Aakar Patel, whose passport at the time had been confiscated,
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who's got cases against him everywhere and he was full of joy and cheer and all of that.
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So what makes you so positive and full of energy?
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Because you've done a great job in this book also laying out all the things that have gone
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wrong and that we haven't managed to fix.
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And they would perhaps have been reason to be positive maybe 10 years ago, you know,
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when the economy was still on an upswing and things were looking good.
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What gives you this energy now?
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So I'm not always positive, I should say.
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I mean, you know, like everyone else, I have my cycles, I have my ups and downs.
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Broadly speaking, I'm positive.
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I'm positive about the world that I live in and I see a world that seems broadly speaking
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to be getting better with each passing year.
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Now, as I say in the book, you know, I was consistently positive about us as a country
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And I started to get less positive in 2017 for a variety of reasons, you know, for economic
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reasons, for social reasons, for governance reasons.
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But I'm still broadly positive.
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And I'm broadly positive because we seem somehow as a society to be able to sometimes in almost
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a random way and surprisingly redeem ourselves.
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So for example, you know, you can start getting very depressed about institutions, about an
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attack on institutions, about the decline of institutions, the independence of institutions
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And then suddenly you'll have a chief justice of the Supreme Court who will revive the institution
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and will pass judgments, will hold power to account.
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That just turns things around.
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And that's happened so often and sometimes at the darkest times in our history.
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So maybe to answer your question, where does the positive element come from?
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It may come from being older, that, you know, I've seen more of those upswings and more
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of those recoveries in our history, which encourages me that what we've seen in the
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past will continue to happen because there's enough going on in the country and enough
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people of great courage like Ram Guha and Aakar Patel to draw strength from.
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Yeah, I mean, that's what struck me as you were speaking as well, that you have a wider
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span of history to kind of look at.
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I was just a kid in the 70s when emergency and all happened, but, you know, you kind
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of went through that period and saw that play out and we did come out of that, where we
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were literally a dictatorship for a while, but we did come out of that.
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So maybe there's that as well.
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So tell me a little bit about your childhood growing up and all of that, because, you know,
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one of the things I've realized that I take for granted and my guests who are, you know,
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my age or older, we often take for granted, is we have a picture of the world in our heads
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that's shaped by decades of living a particular life and accumulated experience.
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And our country is very young.
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You know, I think more than 60, 70% of the country is born after liberalization, in fact.
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There's no that shared memory of what came before.
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You know, in your book, I realized that you share my fanhood of PG Woodhouse, for example.
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And I remember in my, at one point in my writing course, I mentioned PG Woodhouse and then
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a couple of people later wrote to me and said, okay, who is he, you know, kind of makes you
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So I'm very therefore keen to know a little bit about your childhood, where were you born?
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What was the texture of your days early on before you came into adulthood?
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So I was born in Bombay, as it was then, and as I still generally call it, in 1960.
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Grew up for the first seven years of my life in Bombay, went to kindergarten and first
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and second standard at cathedral school, which was at that time, they'd just opened, I think
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with my year, a new branch in Malabar Hill.
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So it was a very comfortable childhood.
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My father set up a factory in Pune around 1960, around the time I was born.
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And he started going down so that even though the office of the company was in Bombay, he
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would go down every week and spend the week in Pune, so he'd go down on Monday morning
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and come back on Thursday evening and then work in Bombay on Friday and Saturday.
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And as we started growing up, my elder brother and I, we started spending more time in Pune
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because we would go down, instead of him coming to Bombay for weekends, we would go to Pune
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for weekends because they'd rented this really nice house and we would go down for the weekend.
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And then my parents bought that house in Pune, which is still the house where my father and
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my brother and his family live.
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And we would go down for weekends and enjoyed Pune so much that in 1967, we moved to Pune.
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And then from 67 through to 77, when I went to the US as an undergraduate, I grew up in
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Pune and went to school in Pune and still love it.
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I still think it's a great city.
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I think it's a very nice city to live in from a climate perspective.
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It's a very good city to live in also from, I think, an intellectual perspective.
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And it's getting to be a better city to live in from a sort of social and restaurant perspective.
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It used to be somewhat parochial on that vector, but it's getting better.
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Which school did you go to?
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So I went to Bishop's from the third to the 10th standard.
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And then Bishop's didn't have an 11th and 12th at that time.
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So I went to St. Vincent's for the 11th and then didn't actually do my 12th.
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Went to the US and went to a small junior college called Menlo for my first year when
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And yes, so I have a memory of the emergency from 1975 to 77.
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I remember my parents talking about it.
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And I remember also that we used to always be very free talking about anything at home,
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being critical of the government and so on.
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None of us were fans of Indira Gandhi.
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And I remember that my parents, when they would talk about the government and Indira
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Gandhi during the emergency, they would go outside and walk on the lawn and not talk
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in the house because there was this concern that maybe people were watching or listening
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And that was my first exposure really to a kind of surveillance state, if you like.
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I don't think there's any evidence that anyone had any interest in what my parents were saying
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to each other or any of us were saying at home.
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But I do remember that that's what they did.
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I remember a second thing that there were these, I think there were 10 principles or
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something that was put out by the government of the day during the emergency.
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And these were 10 things that you were supposed to do and follow.
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And it was sent to all companies.
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And my father used to, at that time, look at all the mail that was coming into the company.
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And when this came in, he tore it up and threw it away.
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And then there was a follow-up where they said, well, what about this?
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And everyone in the company, quite honestly, were able to say, we don't know anything about
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So they sent it again, and he tore it up and threw it away again.
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And the same thing went on.
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And finally, I know we sort of outlived the emergency.
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Unfortunately, we were a small company, and so no one really cared what we did.
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Just speaking of the surveillance state, before we started, we were talking about state capacity.
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And one of the contexts in which I'm really glad that India's state capacity is so poor
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is the malign nature of the state sometimes.
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Sure, we might have a surveillance state, and sure, the state might want to crack down
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on society and all of that, but it is so incredibly incompetent.
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I think it's a great strength.
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And my best example, when I was an undergraduate, I studied industrial engineering and history.
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The history that I studied was modern Europe.
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And I remember taking courses in the history of modern Europe at the time.
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And I remember the contrast between how fascism rolled out in Germany, Italy, and Spain.
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And it sort of cascaded down in terms of competence and also in terms of virulence.
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And the competence and virulence went hand in hand in the sense that Germany was the
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most virulent because they were the most competent.
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Italy, there were some loose ends and so on, and therefore, fascism in Italy was not as
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virulent as it was in Germany.
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And Spain was even less virulent.
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And it was directly connected with state capacity.
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And ever since then, I've been a great fan of weak state capacity.
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One wouldn't know it reading your book necessarily.
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In those early days, as you're kind of growing up, what is your conception of India at that
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It's a cliched phrase, idea of India, whatever.
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I look back to my growing up in the 70s, 80s, whatever.
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And I have a certain sense of India.
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But gradually, as I interact with the real world, layers begin to fall off.
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And gradually, as I begin to interact with the real world and get into adulthood, liberalization
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So it's constantly evolving.
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And in recent years, I would argue that I have realized that there were certain things
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about which I had blinkers even back then that I didn't really realize because I was
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in this elite English-speaking bubble of my own, where some things were unseen to me,
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to go with the title of this show.
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So how did your view of India evolve?
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Like, one, what was it while growing up?
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Two, how is it then when you're looking at it from outside, when you've gone to Stanford?
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And like you said, you spent many, many years, more than many of the people who were teaching
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And then you come back.
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How did your view kind of evolve?
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So when I was growing up, I mean, your comment about living in a bubble was completely applicable
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I mean, I lived in this very comfortable, affluent, very privileged bubble.
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And I was very aware that there was a lot of poverty around us and very aware not only
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that there was poverty around us.
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And I'm not talking here now about just people who were destitute, and there was a lot of
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Certainly in the 60s, 70s, there was a huge amount of that around.
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But also that people who were middle-class in India lived a very frugal life.
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That only started to change post-1991.
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People who were middle-class in India did not take holidays abroad, did not take holidays
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There was not enough of a surplus to be able to afford holidays anywhere.
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When you went around and visited our tourist monuments, you saw more foreigners than Indians.
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And it was simply because Indians couldn't afford to be tourists in our own country.
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Second, if you looked at possessions and cars, cars were a luxury good.
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And even for the middle class were a luxury good.
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You instead needed to buy a scooter, which you needed to wait whatever, 10 years to get.
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There was a scarcity mindset, and of course the government tried to deal with scarcity
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by controls and made the scarcity worse.
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For example, in the case of cement, where cement and the supply of cement was rationed.
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And the moment they opened it up, suddenly cement became available and the price fell.
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So there were many of these experiences growing up that I think taught me things about the
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But I'd say it was only after I went to the US and went to Stanford and started studying
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not India, because Stanford had no courses on India at that time.
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You had to really search to find anyone who had any knowledge and any interest even in
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India, unfortunately, at the time.
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But I got really interested in India when I was at Stanford because I started getting
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more and more into issues relating to development, more and more into issues relating to history
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apart from engineering.
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And I'd say I would credit my education at Stanford with my interest in India and development
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that became very much of a life's passion.
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The way sometimes distance can give you that important perspective.
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I forget the exact way the dialogue proceeds, but there is this dialogue where there's
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a fish in water, daddy fish and son fish are going along.
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And another creature passes by and asks them what the water is like today and daddy fish
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And baby fish turns around and says, what's water?
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So a little bit like that.
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And speaking of like, I had an episode on the liberalization of 91 and what life was
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like before it with Ajay Shah and Shruti Raj Gopal, and so I linked that from the show notes.
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And it's interesting, you mentioned cars, like one of the things that would surprise
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people to know who haven't experienced it themselves, that secondhand cars were more
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expensive than new cars, because a new car had that waiting period of eight years where
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you could, secondhand car, you could get immediately, my God, what a premium.
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I remember at that time, the choice was you had the ambassador, you had the Fiat, right?
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And then for a period of time, you had the standard Herald, I mean, and then they stopped
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So you had these two, pre-Maruthi days, yeah?
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And then you had the state trading corporation.
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And this, a classic Soviet institution, if there ever was one, right, where what was
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the state trading corporation?
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The state trading corporation was this government body that would take over the cars that were
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brought into India by diplomats and would sell them to wealthy Indians and where you
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And I remember we bought a car from the state trading corporation, which was, we bought
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an Australian Chrysler, which must have been, I don't know, six or seven years old.
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And I think we paid, I can't remember what for it now, 10,000 rupees, something like
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that, but this is in the seventies.
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And I mean, it was a good car, but it was eight, 10 years out of date.
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And that's what we experienced as a country until 1991, when things started to change.
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So I think you're exactly right.
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I think people do not, who are born post-liberalization, take it all for granted.
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And they take for granted that the way we are is the way we've always been.
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And second, that there isn't a huge danger in going back to that pre-1991 era.
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That's the part that bothers me.
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I don't mind if people take for granted that this is the way we are, because that's the
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only thing that they know.
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But I think we really underestimate as a result, the dangers of going back to a control regime,
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a regime where bureaucrats decide what should be made, what prices should prevail, how much
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of what should be made.
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That discretion, that bureaucratic discretion is something we left behind and it changed
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India and we should not go back to that kind of an era.
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So I'll digress here and we'll kind of move away from biography and tackle something that
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you devote a subject to in your book, which is culture.
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And you call it a ramble in your book, but I found it a fascinating subject.
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And I have a question for that, triggered by the phrase that you just used, scarcity
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Now, I remember reading long back, I think it was Jagdish Bhagwati who wrote it in the
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context of India and China, that people in China have a profit-seeking mindset, people
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in India have a rent-seeking mindset, right?
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And when I sort of thought about that and the idea there being that in India, there
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is this thing in the culture, you're always looking out for the next buckra, you're always
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trying to exploit somebody, you're always looking at it as a zero-sum game, almost as
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if it's a scarcity mindset.
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And I know people who will go into business also with that kind of approach, less and
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less so now, but it's almost kind of intuitive.
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Now, I can't speak to whether he was right about China or not, because obviously I don't
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I wouldn't agree that China somehow was much more profit-seeking.
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But coming back to the question of India, in your chapter on culture, of course, a broad
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point that you're making there is that whatever policies you design, however you design your
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institutions or your state or whatever, has to take into account local culture, which
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of course I agree with.
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I've had episodes on what is called isomorphic mimicry and how it can't really work.
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You can't transplant a policy from somewhere else and put it here.
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But also it seems to me that the relationship works both ways, that sometimes elements of
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our culture can also be shaped by a system of governance that has been put in place.
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Like I would imagine that growing up in the 60s or 70s for a common person, that scarcity
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mindset would mean that, one, there was so much scarcity that if you got something that
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obviously meant somebody else did not, positive, some games were few.
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Secondly, the state was so all-powerful that everybody aspired to be part of the state
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so they could use the power of the state in some way or the other and therefore the term
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rent-seeking mindset, you know, to kind of get by.
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And therefore, because of our institutions and the system of governance that was set
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in place, we developed this mindset, which now seems like a cultural thing.
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I'm not saying necessarily the causation is always one way, there's always an interplay,
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but it strikes me that that could be something that's reinforced this aspect of our culture.
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Now, I have no idea if we had this mindset, say, 200 years ago or how colonialism may
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But I certainly see this mindset pervading even today.
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Like I was a professional poker player for five years and game of skill and all of that,
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but also on the intersection of skill and gambling.
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But that's a whole different sort of tangent.
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My grandfather in the 30s supported himself and his family in some style on his bridge
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So you know where I'm coming from.
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And even there in that community, I met so many people who would be, I'll do this venture
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and I'll do that venture.
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So obviously poker is a zero-sum game, if not a negative-sum game.
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So you expect that mentality there.
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But that mentality was just so common at the time.
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Like thankfully in our new economy, it's not so much the case because you have young entrepreneurs
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coming up with, you know, who are genuinely driven by much more than that.
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So what is your sense of that?
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Like one, I'd like you to elaborate on what you think are specific aspects of our culture
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that we need to keep in mind when we think about policy or when we think about the relationship
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between state and society.
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And two, would you agree with this example because when we talk of culture, the danger
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is of essentialism, that we assume that this is an inherent immutable quality of a people
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and therefore this is how they are.
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And it seems to me that that's not necessarily the case.
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So let me start with the last comment that you made and I fully agree and I give some
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examples in the chapter also of how culture has changed and changed very dramatically
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in different countries.
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I mean, you know, we talked about Germany and fascism earlier on and Germany today,
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if you ask me in Europe, is probably the least right-wing fascist oriented country.
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You know, it's a society that works.
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It's a society that believes in carrying everyone along with it and it was the society that
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Angela Merkel opened up most to immigration, you know, and immigration not from other parts
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of Europe, but immigration from Africa.
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So cultures change and there are lots of other examples in there.
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But culture, it seems to me, is a product of our history.
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It's also, and the history in a sense is a product of the policies that you follow and
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So the scarcity mindset, I think is very much a part of our cultural heritage and it shows
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up even today in different ways.
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It shows up in sort of, well, this is good enough for us.
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So you don't need the absolute best, you make do.
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And that make do mindset is damaging.
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If you want to win in the world, you can't make do, you have to be the best.
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So it's not that this is all pervading, but it is a theme.
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It appears too often because it's a part of our lived experience, it seems to me.
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You know, there is the scarcity, there is it.
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And the scarcity, I think, comes from poverty.
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It comes from being relatively poor.
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And as we get richer as a country and as a society and as that wealth spreads through
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to more people, I think that is waning, but it's still, that mindset is still very much,
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You have to remind me your first, the first question.
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Yeah, I do this sometimes.
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The first, sorry for that.
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The first part of the question was that, you know, what aspects of our culture do you think
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are germane to how we should think about policy in the state?
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So the starting point for me, it seems to me, is our huge diversity in pluralism.
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The fact that we are, I think, I think we're the world's most diverse country.
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Now, we have a huge advantage in that we are also the world's largest country in population
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together with China, but China is much less diverse than we are.
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And there's a reason why I think, I think the reason China is so much less diverse,
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I'm no specialist in Chinese history, but it seems to me that the reason that China
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is so much less diverse is number one, because of a very strong centuries long controlling
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state and powerful state administrative mechanism in terms of sort of Mandarin rule and so on.
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The use of Mandarin as a language and so on.
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And second, which people, I think, don't point out and don't give enough credence to, the
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devastating experience of the Cultural Revolution, and I think the decades of the Cultural Revolution
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that visited real horrors on the population, and these were common horrors.
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These were horrors that the average Chinese experienced and the elites experienced together.
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Dozens of millions of people are supposed to have starved because of the follies of
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the Cultural Revolution.
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And I think that lived experience, I think churned the society so dramatically that it
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ended up producing a much more homogenous country.
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All I can say is that I'm really happy that India has not had to go through that same
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kind of torturous experience to have that common homogeneous perspective and view of
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Now, would we be better off as a country that's more homogenous?
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Well, I don't think that's a question that I would say, given what it would take to be
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more homogenous, for a country of 1.4 billion people to be more homogenous, I don't want
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I think we should instead say, we're the world's most diverse country.
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Given that we're the world's most diverse country, how can we make policies work?
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Combine that heterogeneity in the country with the fact that we have low state capacity,
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and I'm sure we'll talk about that later and so on.
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And if you put those two things together, then it says to me that we should look to
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the state to do a few things, to do them well, and to leave the rest to private initiative.
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And private initiative doesn't mean only the private sector.
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It means the private sector, it means NGOs, it means citizens who get up and want to do
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a particular thing and take care of something in their community or get together with others
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and address vaccine shortages or whatever the issue of the day is.
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So I really feel that as a country, we should seek a limited state, a state that is effective
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in doing a few things, and then rely on private initiative for the great bulk of everything
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So that's the first piece, this diversity piece.
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The second element of our culture, it seems to me, and this is something that is an experience
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We've started to develop a culture of growth, and there's a section on a culture of growth
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as you know, and that's a very positive thing.
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Until 1991, if you ever talked about growth rates in India, you'd always get a response
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where, oh yeah, but India's different, we're so big.
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Then China was growing really fast and equally big, bigger at that time, so how come?
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And then you'd say, well, you'd have a whole list of excuses, you'd have the size thing.
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Earlier I used to have the colonial thing, that blame colonialism for everything.
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And I blame colonialism for a lot of things, and a lot of things that kept us poor for
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But if you blame colonialism for everything, then you're not taking agency for where we
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are now, and you're not saying, hey, we can do something about this.
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You can't just say, well, because we were once a colony and we were a colony for so
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many, for two centuries, that that somehow is going to blight our prospects forever.
#
Other countries have moved ahead after a colonial legacy.
#
We can too, and we've demonstrated since 1991 that we can.
#
So I think we've developed this culture of growth.
#
That culture of growth shows up in a bunch of different ways.
#
One of the ways is that it started showing up where people started seeing a fall in the
#
rate of growth as something that was a failure of government.
#
Very positive, very good thing, very good development, because then people start saying,
#
We were growing at 9%, we were growing at 8%, why are we now only growing at 4 or 5?
#
And even if the government of the day tries to rationalize it and explain and say why
#
and so on, and maybe even change the figures so that it doesn't show that, you still, I
#
think, have this sense that we deserve to grow at this rate, at this much higher rate,
#
I agree that we deserve to grow at that rate, but I don't think we can count on it.
#
You have to keep working at it.
#
And I think how you work at it is the important question, and there's lots on the book in
#
We're growing at much more rapid rates of growth.
#
But I think this culture of growth is an important element.
#
It's something we're starting to have, at least among the urban inhabitants of the country,
#
probably reasonably extensively among the middle class, so two, three, four, 400 million
#
And I think this idea of progress is starting to show up for more and more people.
#
And that's a very powerful idea and something that we need to keep enhancing and believing.
#
So that's the second piece, the culture of growth.
#
Third is there's a real, I think, if I had to pick a common piece, Indian parents are
#
They make tremendous sacrifices for their children.
#
How you capture that and show that as culture, I don't know.
#
But I think it's a very important feature because it's very valuable.
#
It means that Indian parents are willing to make sacrifices to invest in education for
#
their kids, to ensure that we can do a better job, especially of parity between boys and
#
But there's at least this desire to educate and to ensure that the next generation has
#
a better life than the current generation, again, a very powerful element of our culture.
#
Other cultures also, some other cultures also have this.
#
But if I compare where we are at our time in history with the West and with many countries
#
in the West, with the US, for example, or with the UK even, I think we're in better
#
shape because of this element in our culture of parents willing to make sacrifices, of
#
close families, of children then having a sense of obligation and a sense of responsibility
#
to look after their parents when they get older.
#
I think these are all very healthy elements of how we operate as a society.
#
And then a last piece on our culture, I think we have a culture of entrepreneurship.
#
I give this example in the book, the story about this photographer at the Amber Fort
#
who takes pictures of this group of tourists that I was with when they ride the elephant
#
up the fort and then the negotiation over photographs.
#
And it's an illustration of the most surprising display of enterprise and resourcefulness
#
that from individuals who you would not expect to, these are not people who've had the benefit
#
They're not people who have any privileges and they demonstrate an ability to really
#
This is such a fantastic summary, I'll think aloud on each of those points, on these points
#
you mentioned, because there's so much to kind of untangle.
#
But before that, you know, that illustration you gave of Indians have this approach that
#
we'll make do, you know, we'll satisfy as economists might call it, is again something
#
that one can see, you know, might have been affected by policy as well, like in your book
#
you speak about how we should always have been more open, right?
#
Our manufacturers, for example, have been protected for so long with tariffs and so
#
And one point that you have made, I mean, it's a common point that I keep making that
#
if you are just open, you know, consumers will benefit the most.
#
I mean, when you put tariffs, you're really redistributing wealth from poor citizens
#
But the other point that you emphasised on in your book is that the way that a firm achieves
#
excellence is if it has to compete with the rest of the world, if it's not protected
#
So perhaps this mentality of this is good enough, you know, might kind of come from
#
The diversity point is what I love about India, like if I love this country, the first thing
#
that really comes to mind is that we contain so many multitudes.
#
And I was reminded of this quote, but it's in a completely different context, not a celebration
#
And I got this from Tony Joseph's book, early Indians.
#
And David Reich had done a similar genetic study of different populations.
#
And Reich pointed out that while the Han Chinese are one large population, India is actually
#
a collection of many small populations.
#
And his point was that is because of endogamy, so it's because of caste, which is, of course,
#
you know, one of the greatest barriers that we still have to overcome, sadly.
#
That was a negative way of looking at it.
#
But if you want to interpret it, if you want to talk about it in another way, it is true
#
that we are many peoples, we are not just one people.
#
So that's quite fantastic.
#
You see it, you know, you see it.
#
I mean, you know, you travel from the northeast to the south, to the north, to the west.
#
I mean, we look different, you know, we come in different heights, you know, it's, you
#
know, we have different kinds of hair, you know, it's great.
#
No, you mentioned you come in different heights, slight aside, you know, when I came to Bombay,
#
one of the things I noticed, I came to Bombay in the mid 90s, and I would travel by local
#
train everywhere, obviously.
#
And one of the things that I noticed is that people who traveled first class with the first
#
class pass, like me, were on average taller than people who traveled second class.
#
And that's heartbreaking, because it's a visual illustration of poverty, right?
#
Yeah, you know, when you go around and visit homes, you know, old homes in England, you
#
know, you go into these old cottages from the 16th and 15th century, what's the most
#
The most striking thing is that the doorways are very low.
#
And that's because people were so much shorter than and it's they were so much shorter than
#
because nutrition levels were so much worse than.
#
So it's a sign of progress that that we're getting taller.
#
And and the fact that, you know, people in first class are taller than people in second
#
class is indeed very damning.
#
This was true in the 90s.
#
I would hope the differences are narrowing.
#
We are still such a desperately poor country.
#
The other aspect actually plays for that, like you spoke about growth.
#
And I can agree with you that it's important that we're thinking about all this.
#
But I think that there might be a mistake that we are, you know, the selection biases
#
at play that we're looking at the people around us and the people that we have access to.
#
Because if you look at the way people vote, for example, growth is far from their mind,
#
you know, demonetization happened, it devastated, especially the informal economy.
#
And yet that thumping election within UP didn't seem to affect the BJP at all.
#
You know, they won easily.
#
Like I recorded an episode a few days back with a couple of economists, Shriyana Bhattacharya
#
and Rajeshwari Sengupta.
#
And we were talking about how important the role of welfare delivery has played in votes
#
both in 2019 and, you know, recently.
#
And it's true that welfare and growth can happen together, you know, you can make a
#
package out of it and so on, as Shriyana was eloquently arguing.
#
But at the same time, we're ignoring growth completely in that category of discourse.
#
Typically, when you know, farmers will demand things from the government, they will demand
#
things like farm loan waivers, which are perhaps a necessary anesthetic, but that don't
#
solve any of the fundamental structural problems, right?
#
You're absolutely right.
#
I think the, I mean, I should, I should actually, maybe I should put culture of growth in the
#
category of desired, desired cultural attribute as opposed to cultural attribute we have now.
#
It's just that we have much more of it than we ever had.
#
Thanks to the experience since the nineties.
#
So thanks to the last 30 years, we're starting at least in some sections, significant sections
#
There's a directionality.
#
I think that there's a directionality of developing that culture of growth.
#
The problem is that, and it's, this is a problem of economics and it's a problem of economists.
#
We do not, as a group, do a good job of tying growth rates to individual wellbeing.
#
We do it actually a lousy job.
#
You know, we, we could much more clearly relate national growth to growth of states and companies
#
and small enterprises to individual wellbeing and salaries.
#
We need to draw those connections because they are directly connected and we don't do
#
a good job of drawing those connections.
#
We don't do a good job anywhere in the world, by the way, but in a country like ours that
#
has decades of development to aspire for and look forward to, we have to do, we have to
#
draw those connections.
#
And I remember, you know, my friend Nitin Pai of Takshashila once estimated that for
#
every 1% rise in the GDP, 2 million people come out of poverty, you know, so therefore
#
growth has a moral force.
#
It is not just a number somewhere exports are this, imports are that, no, growth has
#
It changes the lives of people, which is why, you know, when I think of all these wasted
#
decades with millions of people in poverty, you know, it's a moral catastrophe.
#
And, you know, we, when we were growing, you know, very, very poorly, very little in the
#
seventies, we almost tried to make a virtue of it.
#
And we, we, I mean, you would hear statements from the prime minister at the time, from
#
Indira Gandhi and from political leaders at the time, you know, almost sort of rationalizing
#
it and saying that, well, you know, yes, we're growing very little, but, you know, we're
#
so much more equal and so on.
#
We were, we were a pretty, you know, we, we, we had a very good Gini coefficient of inequality,
#
but that was because almost everyone in the country was poor.
#
Not because, you know, we weren't and we were, we, we, the, the official, the official statistics
#
showed that we were much more equal at the time, but that wasn't a good thing.
#
It was, it was a bad thing.
#
It reflected a country that was almost entirely poor.
#
No, one of my pet bugbears, in fact, is how people nowadays are following the fashion
#
We'll use the word inequality when what they mean is poverty.
#
We should all be outraged at poverty, but inequality is very different and because people
#
look at the world in a zero somewhere, they assume if the rich are getting richer, the
#
poor must be getting poorer.
#
And you know, I think what we, what we should do from an inequality perspective is we should
#
say how are the bottom 20% of the population doing and how are the next 20% doing?
#
And if they're getting better off, hey, great, that's the goal.
#
That's the objective of development, you know, that the population as a whole move up.
#
And if in the process we become less equal, that's okay.
#
I mean, in fact, since liberalization, we've reduced poverty and inequality has gone up
#
because while the rich are getting richer, the poor are also getting richer, but at a
#
slower rate that's bound to happen.
#
But poverty is going, like the phrase I love that really sums up my feelings on this are
#
by the philosopher Harry Frankfurt, who wrote this book called On Inequality.
#
And the phrase was the doctrine of sufficiency.
#
He said that what we should have a doctrine of sufficiency in that however we define sufficiency,
#
we should just aim at that to make sure that everybody reaches that level above the poverty
#
line or some line below it doesn't matter where you define it.
#
But you look at getting, you know, getting rid of poverty first.
#
So anyway, that that's a pet bugbear and to illustrate this, you know, a lovely paragraph
#
by you I'll read out which sort of gives, you know, this pretty in one para goes through
#
this long sweep of history where you write quote, 500 years ago, the world was a pretty
#
Every country was poor, and the richest country had around twice the per capita GDP of the
#
By 1800, the richest country was around five times as rich as the poorest.
#
By 2020, the richest countries, Switzerland, Norway, were 300 times richer than the poorest,
#
In some of our present day nationalist talk of reclaiming some bygone golden age of Indian
#
history, they are mistaken.
#
There was glory if you were the ruler or near him, almost always him and not her.
#
For an ordinary person in every country, life was solitary, poor, nasty, brutish and short.
#
There is only one reason India accounted for a much larger share of world GDP 500 years
#
Every country was poor, and we had many more poor people, stop quote.
#
And of course, I'll come back to our historical development through the years shortly.
#
But you mentioned equality, and I thought that's a good point.
#
Your third point when you spoke about culture was about the indulgence of parents and family
#
And I think that you mentioned how much parents care for their kids.
#
And I thought therein also lies a great indicator of places where we are failing.
#
Like I've written a lot about primary education, for example, and study after study has shown,
#
you know, whether it's by the Center of Civil Society in Delhi, or James Stooley wrote a
#
great book called The Beautiful Tree on this.
#
Study after study has shown that when presented with a choice between an illegal budget private
#
school and a free government school, poor parents living in slums, you know, auto rickshaw
#
drivers made service and all, will spend a significant chunk of their money sending their
#
kid to the budget private school rather than the free government school, which kind of
#
indicates how badly our government has screwed that up.
#
And of course, the point, you know, I keep making is not that we don't have government
#
schooling, we put in whatever investment we have to and we try to make that work.
#
But also that we allow private schools to operate, which very often we don't because,
#
you know, budget private schools like this, which are on the margins, which don't meet
#
regulations, like playground should be this size and all of that nonsense, just get shut
#
down, thus robbing the poor of options, which is kind of or putting the price up or putting
#
For the poor, for people who can't afford those prices.
#
And it's a so I absolutely, you know, and that's where it's part of our diversity thing
#
as well, you know, that we have all kinds of schools in India, you know, you have schools
#
that are good public schools, bad public schools, you have good private schools, bad private
#
So how do you deal with that?
#
One way is you simply say, we are India, we will accept it all.
#
And let the in a sense, give give parents the choice of those private schools.
#
Why do they send their kids to I mean, you know, there have been lots of studies that
#
have been done that actually show that the quality of education that the student gets
#
in that substandard private school is worse than the education they get in the in the in the public school.
#
But the parents still chooses to spend money and send their kids to the private school.
#
Usually for one reason and one reason alone is that it's officially in English medium school.
#
That's the association that's made with getting on in life.
#
And I think we should simply recognize it and go with it and encourage English medium
#
education if necessary in the public school.
#
And what ends up happening then is it's officially English medium.
#
But a lot of the so the text will be in English, but a lot of the explanations in the classroom
#
are in the local language.
#
So you actually end up I think I think we actually have the world's largest bilingual
#
education system in the country without officially having a bilingual education system.
#
You go into any classroom and that's what you know of an English medium school and you
#
will or college by the way too sometimes and you will what you will hear is explanations
#
Yeah, my most popular episode of the scene in the unseen in terms of downloads is actually
#
one I did with Karthik Muralitharan on the state of Indian education and you also cited
#
him in the book and he makes some fantastic points there.
#
And one of the interesting sort of learnings about Indian education is that private school
#
public schools outcomes are actually pretty similar, but you get way more bang for the
#
buck from private schools than from public schools and it all comes down to incentives
#
which is why what people have also been saying for a long time is don't fund schools fund
#
There is this big move, you know, there is this movement with vouchers and so on.
#
So you give vouchers to the parents because who has the incentive to make the best decision
#
It is not some random central government mandarin sitting somewhere in Delhi.
#
It is a parent, the parent really cares.
#
So give them education vouchers, let them vote with their feet and then schools have
#
to compete against each other and let government schools also compete in that milange or let
#
them do whatever but at least allow private schools the space to go.
#
I mean these are digressions from digressions because this often happens like we were talking
#
biography then we came to culture then we've gone to these different things.
#
The last cultural point you mentioned was the spirit of entrepreneurship and one way
#
this plays out is of course, you know, Jogaru manipulations of the state.
#
For example, there was a gathering at my house the other day and somebody asked, somebody
#
said I have to get a driving, I don't drive because you know getting a driving license
#
is a pain I'll have to give a test and all that and everybody laughed and said you fool
#
I mean these days you know how it is.
#
You just meet a tout outside and you get your license right away.
#
But it's positive because in deeply difficult times, in times of scarcity and we are still
#
mostly a desperately poor country.
#
People find ways to get by like most of the entrepreneurship that we see around us is
#
really despite the odds and a lot of it isn't even things that we would call entrepreneurship
#
like the Indian woman for example.
#
You know I did a longish episode with Shriyana Bhattacharya on this a while back called the
#
loneliness of the Indian women.
#
Indian women have it so bad on so many margins and you know their participation in the workforce
#
is reclined, they live in deeply oppressive conditions both within the house and outside
#
the house and their finding ways to cope with it is also a kind of resourcefulness.
#
So you know that resourcefulness, that energy is all around us and it's just a question
#
of unleashing it as you speak about so much in your book.
#
Let's go back to biography.
#
I mean there are many things you mentioned that I want to like dig deep into like the
#
role of the state and our economic history as it were.
#
But let's go back to your biography and at this point in time what are the kind of books
#
Who are your early heroes?
#
Like before you go to Stanford and get the education you did and all of that, who are
#
the people you're looking up to, what kind of books are you reading?
#
So you know when I was growing up and I was in school in Bombay, KG first and second,
#
KG in first standard, I really struggled to read.
#
You know I was not a good reader and my parents especially my mother was getting very very
#
Something happened in the second standard and it happened, I even remember the book.
#
It was a book called Black Beauty about a horse.
#
One of those classic children's books and I remember I used to really struggle and read
#
word by word and so on and suddenly something clicked and I could read Black Beauty cover
#
to cover really fast sentence by sentence, whole sentence reading it together.
#
And from that day onwards I've been a reader.
#
The first things that I read, I read a lot of Eden Blyton.
#
So a lot of Eden Blyton when I was you know sort of seven, eight, nine, ten, eleven.
#
And then I think at the age of twelve I discovered BG Woodhouse.
#
And the first BG Woodhouse book that I read was Leave It to Smith.
#
And Leave It to Smith remains one of my five favorite books of all time.
#
And then I started reading more and more of BG Woodhouse and BG Woodhouse, Gerald Darrell.
#
These were the books that I really grew up reading.
#
I didn't read much nonfiction growing up.
#
Nonfiction is something that really happened to me in college.
#
It really happened with reading a few books that really got me interested in history,
#
got me interested in the sort of lived experience of people.
#
I remember reading a very powerful book by Primo Levi called Survival in Auschwitz, which
#
was one of these books that sticks in your head.
#
George Orwell's Homage to Catalonia about the Spanish Civil War and his comments about
#
the incompetence of the Republican armies that he was fighting on the side of and so
#
And then I started to read more widely, really in my 20s.
#
And what else about the lived experience?
#
We always took a summer holiday and often a winter holiday, a summer holiday where my
#
parents, my brother and I would go somewhere.
#
One of the places that we loved going to was Kashmir.
#
So we would spend two weeks or three weeks in the summer somewhere on holiday.
#
So it was a very comfortable, very attractive, very caring.
#
I couldn't ask for a more comfortable, fulfilling, nurturing childhood.
#
And what was college like?
#
So I went to college when I was 17 and Menlo College was one year and then I moved to Stanford
#
and Stanford was the first term at Stanford was a great experience because, I mean, this
#
sounds very presumptuous, but I should say it because it captures, I think, what I felt
#
I found for the first time that I was in a classroom with lots of people who were smarter
#
And that was a very good thing because it pushed me to learn a lot more.
#
And I said, I better, all through school, I did reasonably well, but I'm not sure I
#
I mean, I studied, but not that hard.
#
So underneath with the light, with a torch, my parents didn't know I was reading, I should
#
have been sleeping anyway.
#
But when I was in college, Stanford was a wonderful experience.
#
I learned a huge amount about different subjects, but I learned much more about myself, about
#
what I liked, about what stimulated me.
#
When I first went there, I thought I wanted to be an architect.
#
So I started off by declaring as a civil engineering major.
#
And then I went to the first of each of the civil engineering classes, my junior year,
#
And I said, I can't do this for one term, let alone for the rest of my life.
#
So I switched away from civil engineering and tried to become a mechanical engineering
#
Now, mechanical engineering was a very popular major at the time.
#
So all the courses were full.
#
So I said, okay, I'll do the engineering breadth classes.
#
So I took industrial engineering classes, which were available for me to get into.
#
And I enjoyed those so much, I switched at the end of that term to industrial engineering.
#
And then I also, I was briefly an English literature major, a British studies major,
#
believe it or not, because I spent a term in Britain at the Stanford campus there, enjoyed
#
So came back, declared British studies.
#
So I was exploring stuff and exploring sort of my intellectual interests and then ended
#
up as an industrial engineering major and a history major at the undergraduate level.
#
And then went on to do my master's in PhD in industrial engineering.
#
And you know, they always say that PhDs are supposed to be focused and so on.
#
I wasn't focused at all.
#
I mean, even while I was a PhD, doing my PhD, I was taking courses in French history and
#
so on, as I talk about in the book.
#
Like these days, one trend in academia, which I think even academics are bemoaning these
#
days is a hyper specialization, that you'll pick some really narrow area like marine trade
#
between Ghana and Nigeria in the year 1544 and specialize in that.
#
I don't even know if they have marine trade.
#
But yeah, and what I found delightful was like you were describing your love for your
#
teacher Gordon Wright, and how you did a course in 19th century France, which you couldn't
#
tell your, you know, your main guy.
#
And also how you studied crime and punishment in modern Europe and, and so on.
#
And to me, it sounds like this must have been so wildly exciting that you have so many different
#
subjects taught by people who I presume are skilled storytellers who are able to sort
#
At this point, how is your conception of yourself developing?
#
Like you've spoken about how, you know, you'd fall in love with one thing, then another
#
thing, then another thing, you come to Britain, okay, British studies and so on and so forth.
#
How's your conception of yourself developing through all these years, like before going
#
to college, going to college, are you at some point thinking, oh, I'll take over my dad's
#
company one day, I'll run that, or are there other things you want to do?
#
And obviously, you said you wanted to be an architect, so not that obviously.
#
So how is your conception of yourself developing in terms of what you want to do in terms of
#
what you love and so on?
#
So I was always clear that I was going to come back to India and work in India after
#
I finished college, maybe after working for a few years, but then I would come back.
#
How I got into the PhD, by the way, is also something of a story, which is that, you know,
#
I finished my master's in industrial engineering and then I went to work for a consulting firm.
#
This was in San Francisco.
#
I didn't like the firm.
#
I didn't like management consulting as a profession.
#
I thought we were charging too much to our customers and giving them, you know, anyway,
#
I just did, I did not, I did not enjoy that experience.
#
So I said, okay, now I better start looking for another job.
#
And when I started looking for another job, I went back and met some of the teachers that
#
I had at Stanford and started asking them, you know, which companies, et cetera.
#
And the person who later became my PhD advisor, Jim Adams, said, well, have you ever thought
#
And I said, no, no, I'm not the PhD type.
#
And he said, well, what do you want to know a lot more about?
#
And he says, what's, is there a, is there a question that you really want to know the
#
And I said, well, this is 1983.
#
And I said, I'd really like to know how to create Silicon Valley and Pune.
#
And he said, why don't you do your PhD on that?
#
And I said, yes, can I?
#
And he said, yes, you can do a PhD on anything.
#
And my parents suddenly hear that I want to do my PhD.
#
So anyway, and I started in the department of industrial engineering, even though technical
#
entrepreneurship in India was not a subject that they had any connection with.
#
But two of my three advisors were ex-chairs of the industrial engineering department.
#
So as the current chair of the department then told me, he said, well, now Shadi, you
#
could do your PhD in Swahili and it would count as industrial engineering.
#
If these two are on your committee.
#
So then it was, so I started then working on technical entrepreneurship in India.
#
And when I, and it was really through the work I did for my PhD that I got interested
#
in development as a subject in economic development.
#
And I'm clear that today, if I had to go back and redo my college days, I would do my undergraduate
#
degree in economics and history instead of industrial engineering and history.
#
And I would do my PhD in economic history, almost surely in retrospect would be my topics.
#
I ended up doing something that was very different.
#
I'm very happy with what developed as a result, but what I ended up becoming was really someone
#
who was interested in economics and history and economic history and economic development.
#
And that became my sort of academic subject and my academic leaning as an individual.
#
What else can I say about, I mean, I don't want at all to convey that I was only into
#
studies and only into, I was not only in fact, intellectual development was not at the top
#
of the list at the time, probably.
#
I was having a very good time on campus, you know, with lots of friends and enjoying being
#
there and everything else.
#
And you mentioned that, you know, if you could go back in time, you'd do a PhD in economic
#
Now, the thing is you've studied economic history pretty deeply anyway, as it's pretty
#
And you've also been inside the churn of that education system and gone all the way and
#
done all the way till PhD.
#
How relevant do you think academia is in the modern world in terms of knowledge production,
#
in terms of learning, so on and so forth?
#
Because you know, more and more, we see that in certain domains, at least some academic
#
disciplines appear to be ossified and just removed from the real world, that there is
#
absolutely kind of no connection with the real world.
#
Not that everything you study necessarily has to a practical value, but it at least
#
has to relate to the real world.
#
And there is also this sense that like one of the trends, and I don't know if I've thought
#
about it deeply enough to articulate it properly yet, but one of the trends that we've seen
#
happening in the last 20, 30 years is that everywhere, one, the mainstream is dissipating,
#
whether it is in media, where there's no longer a consensus on the truth and everybody can
#
produce knowledge, consume knowledge from everywhere, the mainstream is dissipating,
#
whether it's in music, where there is an argument to be made that perhaps since the mid 90s,
#
you know, Steve Van Zandt, Bruce Springsteen's guitarist says that, you know, Nirvana was
#
when rock stopped becoming mainstream, they were the last bright light, and after that
#
it's all been dispersed, which is a great thing, it's a democratization, and you're
#
allowing a thousand flowers to bloom, as it were.
#
And you know, and some could argue that even nation states are losing certain kinds of
#
resonance where technology allows us to be global citizens in certain ways that earlier
#
geography would not allow us to be.
#
And therefore gatekeepers everywhere are gone.
#
And we see this even in, say, history writing, for example, like we were discussing before
#
the show that our mutual friend Ram Guha is our finest living historian, but he didn't
#
do a PhD in history, it was something else, right?
#
And you have young people like Manu Pillay and all that, who is doing a PhD in history,
#
but after writing four very fine books, and so on.
#
So what is therefore the relevance of academics?
#
Do you feel that this is something that we need to consider, like not just at the higher
#
education level, but even this whole thing that you go to kindergarten, you do standard
#
one to 10 or one to 12, you do the three years in college, in those 10 years in school, these
#
are the subjects you learn, like that whole format is something that was really designed
#
in early 19th century England to bring out a certain kind of worker with a certain kind
#
Is it just inertia that we are kind of sticking with it and all of that?
#
Do you feel that disruptions here are possible, but much more difficult because the old way
#
of doing things, whether it is the way school is taught, that everybody of the same age
#
is in the same class, learning the same things, or whether it is higher education, that they
#
So having seen it all from inside, what are your thoughts?
#
So I think that's a wonderful question.
#
And let me try to give you my take on it without any claim to it being the right take.
#
So even when I was at Stanford as an undergraduate, I had friends who I could see were not into
#
I mean, I enjoyed it and knew I was enjoying it.
#
And today look back on it and say, I really enjoyed it.
#
So for me, it was a pure form of education, self-development, learning.
#
I could see many of my friends who didn't love it, who were turned off by it, some of
#
them, who were in some cases somewhat cynical about it.
#
In some cases, one or two dropped out of the system while they were there and did their
#
But for me, it worked wonderfully.
#
It worked wonderfully at the undergraduate level and it also worked at the PhD level.
#
The one thing that a PhD is supposed to do, the reason PhDs by definition have to be narrow
#
is because in that, a PhD done well means that on that one subject, however narrow,
#
however obscure, however irrelevant for a short period of time, you have to be the expert,
#
the world expert on that one narrow, obscure, maybe irrelevant subject.
#
And the fact that you're the world expert on that one narrow subject gives you an anchor
#
That's the purpose of a PhD.
#
That's what a PhD is supposed to do at its best.
#
It gives you a sense of confidence that you then have the ability to understand anything.
#
Maybe it's a misplaced sense of confidence, but it gives you that sense that I can make
#
sense of the world and figure it out because I've done it once for however obscure, irrelevant
#
I was fortunate also in that my topic was not that narrow.
#
It was technical entrepreneurship in India, so it was a fairly broad subject and instead
#
of getting narrow, it enabled me to get into a degree of depth and certainly at the time
#
of my PhD, I'd read everything that there was out there that related to technical entrepreneurship
#
in any developing country and there was nothing on India and then wrote something on India.
#
For me, the education system delivered wonderfully.
#
How to come to the question that you asked of, is it relevant today?
#
Does it work for everyone?
#
I think that's a great question.
#
If it worked for me, why shouldn't it work for many others, but how do you enable it
#
to work for many others?
#
The way in which the world has tried to answer that question, I suppose, is by improving
#
You improve schooling, whether you're Prussian Germany or whether you're modern day Singapore,
#
try to improve schooling standards to the point where children coming out of the school
#
system have that access then to higher education and self-development and so on that I went
#
through and that I enjoyed so much.
#
Does it work for everyone?
#
No, it's not worked for everyone in history and it won't work today either.
#
But I worry very much about this move that you mentioned about gatekeepers becoming less
#
important in the world today because I think gatekeepers have played a great role.
#
For example, newspapers.
#
Newspapers are nothing, it seems to me, other than gatekeepers.
#
If you get your news from a reputable newspaper, I mean, I subscribe to Business Standard and
#
Indian Express and then in terms of foreign ones to The Economist and The Financial Times.
#
The reason those four is because I trust them as gatekeepers.
#
I trust that they will each display a degree of impartiality, a sense of quality, and that
#
they will try to, yeah, they'll have opinions, they'll express those opinions.
#
They're not necessarily always opinions that I share, but I trust them to do an honest
#
job of gatekeeping for me and giving me my news.
#
There are many other newspapers, we can talk about them, who I don't trust equally.
#
So that's why these four.
#
I do not trust WhatsApp at all.
#
I do not trust social media in general, unfortunately, because there's no gatekeeping.
#
The reason I love your blog so much is because, and the reason I love your show, the podcast,
#
is because of the role you play as a gatekeeper.
#
I mean, I get where you're coming from and I agree with you, but I'll push back in a
#
semantic way by saying that gatekeeper carries in my mind a negative connotation of someone
#
who is keeping people out, who's exclusionary and all of that.
#
The word I'd prefer to use is filter.
#
You're surrounded by sources of knowledge, you need filters to figure it out.
#
And over a period of time, I think what happens, and there are two sides to this, so I'll contradict
#
myself very soon, but the positive side to it is that over a period of time, you figure
#
So there might be a million blogs out there, but I know that when I go to Marginal Revolution
#
and so on, I know it's reliable, I know I can trust these guys, I know where they're
#
There might be a million podcasts, and there are literally more than a million podcasts,
#
but I know which ones I like to listen to, like Russ Roberts, Tyler Carvin, and so on
#
The show that I'm doing would not have existed if they were gatekeepers, because who's going
#
I take your point, and I think that's...
#
So in a sense, what one needs is an open system, as open a system as one can, but where there
#
are these gatekeepers for filters.
#
This is the other part of it that I think, one, I think people develop their own filters,
#
but two, I think increasingly we live in an age where truth seems to not matter so much,
#
and we are engrossed in these narrative battles.
#
And people don't care about what is true, people care about what confirms whatever belief
#
I work very hard, well, no, that's not fair.
#
I was going to say, I work very hard at trying to read the other point of view.
#
I work some at trying to understand the other point of view.
#
So I subscribe, I won't mention which, but I subscribe to a particular online newspaper
#
that has views that are completely contrary to what I believe.
#
And I force myself to read it every day, even though I don't enjoy it.
#
Because I want to know what the, in a sense, other side is thinking.
#
And I've even forced myself to read a couple of books that I knew I wouldn't enjoy.
#
So, I mean, I don't do it enough, but I consciously try to do it.
#
Because I believe that polarization is one of the great challenges of our times, and
#
I don't want to be part of that problem.
#
I mean, I also have to, publishers keep sending me books, and whenever someone will suggest
#
a guest, I might go out and buy the book.
#
So I have to read a lot of stuff that I may not necessarily enjoy.
#
And I do try to engage with people, I mean, everybody on this show, more or less, is someone
#
I disagree with in some way or the other, right?
#
But you know, there are certain lines in terms of values that I can't get myself to cross.
#
If there's a certain kind of toxicity that is out there, I fully agree.
#
And that's why I mean, you know, when I said, you know, even this newspaper is, I think
#
one of the most balanced, reflecting that side, I'll mention which one afterwards.
#
You know, sort of going into the thread, like what I found quite insightful, and I'll think
#
about that more after this podcast is run, where you spoke about how the PhD makes you
#
focus on something small and makes you a world expert in it, and therefore it changes your
#
And I can totally get that, that if you're completely focused on something and getting
#
deep into it, that work ethic, those grooves that you form in your mind, can then be applied
#
to anything, and that's incredibly positive.
#
Also, however, the flip side of that is that, and this, of course, would not apply to you
#
and the PhD that you did, but for a lot of people is that the prisms through which you
#
look at whatever work you have done, those might just become your permanent prisms in
#
a sense that, you know, you use them to explain the world around you, you look at everything
#
And sometimes it's great, sometimes it's not.
#
Like I remember in college, luckily, I was very unformed in terms of having prisms, so
#
I was just very confused, and through adulthood, one sees reality and you come to whatever
#
But I can see how, like people often say that if you're not a communist at 18, you don't
#
If you're not a capitalist at 30, you don't have a mind, something to that effect.
#
And so I can, you know, I've seen people flit one way or the other.
#
And what I in fact find today, and this is an aside, what I in fact find a danger today,
#
is that today everyone is expressing themselves on social media and tying themselves down
#
to positions, whereas in an earlier age, they would have played around it with it in their
#
But now they'll take positions, join a tribe, you know, posture vociferously, and then before
#
you know it, they've closed themselves off and they're just thinking like that.
#
We'll see how it plays out.
#
But in your case, how is your prism of the way that you look at India, our economy, our
#
society developing in that time, like one, you said that it was while at Stanford that
#
you began to see India more clearly.
#
And two, in your book, you mentioned about how the focus of the study, just from being
#
about Silicon Valley and Pune, shifted to Pune, where you were speaking to people and
#
So tell me a little bit about how your view of India got sharpened through all of this.
#
So it was sharpened in a way which I have always found works for me, sort of it's worked
#
for me ever since too, which is I would read about India and I would match it to my own
#
lived experience and the experience of my parents in running a firm, et cetera, in India.
#
So for example, when I started doing my work on technical entrepreneurship and I went around
#
and started interviewing entrepreneurs in Pune, I would read what the government schemes
#
were on entrepreneurship and fostering entrepreneurship and caring for small scale industry and so
#
And then I would talk to all these entrepreneurs and hear what they had actually experienced
#
of those same schemes if they knew about them, which they didn't very often, but they would
#
have the same experience.
#
And this combination of here's what's written about a particular subject and here's the
#
This experience may not be hugely representative of the aggregate, but it's real.
#
It's real for at least one.
#
And if it's real for at least one, that real for at least one has to fit into your broader
#
theory and scheme because if it doesn't, then you know there's something wrong with the
#
theory and the scheme and not with the one because you know the one is real.
#
So I've always found that that combination is very powerful for me.
#
And as I would keep reading about India, I would read about dependency theory, for example,
#
you know, rich world is keeping the poor world poor, ripping it off, you know, multi-ricket
#
multinationals are going around controlling technology and by controlling technology,
#
keeping developing countries in a permanent state of dependence and so on.
#
And I would look around at my lived experience and say, hey, I don't see that.
#
But maybe it's happened in as exceptional circumstances as the exceptions that I'm seeing,
#
And when I would look at what I saw around me and I would then start saying, okay, maybe
#
there's a need for a better theory and a better understanding of what's actually happening.
#
And so I sort of came to, I came to building technical capability and economic development
#
from this combination of reading a lot of old style understanding and dependency theory
#
and so on of the late seventies and early eighties, connecting it with my lived experience
#
of a firm in Pune and the study that I was doing and going around and visiting and talking
#
and interviewing entrepreneurs, and then trying to come up with my own picture of what was
#
So that was really the way I tried to approach this and think about it.
#
And I've tried to do that ever since, which is if I read something, I try to match what
#
I read with as factually as I can.
#
And it has to make sense at least for that one fact.
#
How important a role did writing play in the way that you developed as a thinker and the
#
way you thought about the world?
#
Like the great economist Ziedre McCloskey once said that, you know, I don't wait to
#
start writing till I do my research because writing is a form of research, right?
#
And you also mentioned earlier how, you know, one of the great things about doing your undergraduate
#
courses in Stanford and all that was that they taught you how to write well, there was
#
And similarly, you've mentioned in the book about how when you were, you know, heading
#
the CIA, you would write a daily journal where you would write every day.
#
And you know, even in this book, like as listeners can obviously make out, you know, you obviously
#
and this would come from your teaching that you're extremely lucid, but the book is also
#
very lucid and well structured and all of that, you know, in non-academic language,
#
one would never know you've done a PhD by reading this book.
#
I'm very glad to hear that.
#
So tell me about the role that writing has played, like what I often tell my writing
#
students is that you shouldn't think of writing as something instrumental in the sense that
#
I have a goal, I have to write an article I will sit and write now, or I want to write
#
a book I will sit and write for a few months.
#
But you make writing a part of your daily life, you make it a habit, and it just helps
#
the way you think, it deepens your sense of self and your engagement with the world and
#
So tell me about the role writing has played in your life.
#
So you know, I've written a lot at different points in my life.
#
And whenever it's been a period in my life where I've been writing a lot, I write better.
#
So I mean, I think it's a point that you've made often in your blog and, you know, on
#
the podcast that you practice writing is something that you have to practice.
#
I think that's exactly the way it works, and it's exactly the way it's worked for me.
#
So I used to write a lot when I was in college for obvious reasons, I had to do assignments,
#
But when I did assignments, I always tried to pick a subject that I cared about.
#
So for example, my freshman essay for my English class, and there was was on PG Woodhouse,
#
as you would expect, but it was on an aspect of PG Woodhouse that at that time, no one
#
had looked at, which was his experience during the Second World War, where he made these
#
broadcasts on German radio and so on, and the reactions in Britain and so on and making
#
And later, by the way, I wrote on the 1857 First War of Independence or Indian Mutiny
#
depending on your perspective.
#
And the way I wrote about it was by actually going back and reading what the economist
#
said in 1857 at the time about it.
#
Unfortunately, the Stanford Library had the economists of 1857, so I was able to go and
#
So the first point about writing is, I think you should write about something you care
#
It can be nonfiction, it can be fiction, it can be about emotion, it can be about character,
#
it could be about anything.
#
So in my journal, I would try to do that.
#
I would try to always capture how I felt, not just what happened, because what happened
#
You need it as a record of what happened, but then you need to also capture how it made
#
you feel, because that's much more interesting, I think.
#
Second thing that started to happen for me is that when I first started working, well,
#
I had to give lectures, because my course at Stanford grew, and so it became less of
#
a seminar and more of a lecture class, so I had to write those lectures.
#
And I tried to make each lecture count, and so I do a lot of work of digging things out
#
And you have to make the lecture not only count in terms of content, but you have to
#
make the lecture engaging.
#
So my handouts always had Lakshman cartoons on it or other cartoons on it.
#
It was, I think, the only course in the School of Engineering that had cartoons on it.
#
I tried to make the lectures engaging in terms of quotes, in terms of personal experiences,
#
And that was a form of writing also, and polishing the writing, and the writing, the lectures
#
would improve, I think, from year to year.
#
And then I did some academic writing also at that time, which is less interesting.
#
And then later, I'd say two other things taught me about writing.
#
One was when I was president of CIA, and I would travel around the world to give a five-minute
#
And if you're going to give a five-minute speech, and you're only allowed five minutes
#
because the president is speaking or something, so you're only three minutes, I mean, if you're
#
going to speak for three minutes or five minutes, you can at best try to get one point across.
#
And it better be the right point, because otherwise you've wasted days of your time
#
getting to wherever to give this five-minute speech.
#
So you better make that five-minute speech count.
#
So for the first time, probably, I really learned the power of brevity and being focused
#
To deliver a speech, I never used a single transparency, by the way, and slide, showing
#
my age, and you'd really learn how to make one point and stick to it.
#
And then after that, when I started writing my column, it was a great disciplining experience,
#
because I found that, and initially I used to object when the person would come back
#
saying that, listen, no, it's a thousand-word column, you can at best get to 1,100 words,
#
but you can't get 1,120, it has to be, it can at most be 1,100.
#
And I found that that improved the writing a lot, because you get rid of a lot of bump.
#
Now, when you write a book, you have the luxury of length.
#
But I have to say that I tried to go back through the book several times and edit, and
#
every time I edited, it always became shorter, not longer.
#
I remove stuff, including removing whole pages and points and so on, because I said, what
#
do I really want to say in this chapter?
#
And then at the same time, I wanted to have fun.
#
So the quotes, some of the sides, some of the footnotes, and the cartoons, if I'm not
#
going to have fun, why am I writing this book?
#
Yeah, I mean, you know, Blaise Pascal once said to someone that I'm sorry for sending
#
you such a long letter, I didn't have time to make it short.
#
Abraham Lincoln said the same thing, right, about giving a speech once where I think he
#
Probably quoting Pascal.
#
Probably quoting Pascal.
#
No, in fact, the parts that I loved about your book, like one, of course, you've nailed
#
the conversational tone, but I love the personal anecdotes a lot.
#
And since we mentioned that, you know, especially in your chapter on politics, it was this lovely
#
anecdote on Indian politicians, which I'll just read out before we get back to the narrative.
#
Quote, Indian politicians are petrified of being photographed holding a glass of alcohol
#
At a state banquet in an unnameable capital, I was fortunate to still be president-designate
#
This enabled me to sit at the second table.
#
The president had to be at table one with the chief minister.
#
We were all served with good alcohol, no alcohol at table one, though the chief minister was
#
known to like a drink as much as my predecessor and me.
#
At another program, the opening dinner was held in a spectacular setting.
#
Here I was at table one and the waiters were bringing us drinks at the table.
#
We all had an excellent whiskey, except the governor of the state and a member of parliament,
#
both of whom were sitting with us and seemed to look distinctly thirsty.
#
At some point, well before dinner was served, the waiter brought the governor a bowl of
#
soup with ice cubes floating in it.
#
When he started to drink with his soup spoon with some relish, the MP asked for the same
#
The waiter started to explain in a low voice and the MP sent him away with a clear instruction.
#
This is such a beautiful story.
#
You know, after you've done your PhD, right, and then you come back to India, tell me about
#
how that journey was in industry.
#
Like you've spent a few years engrossed in stuff that you're passionate about and not
#
just academics, as you said, I'm sure you were having a good time on the side, but you
#
were having a good time with the academics as well.
#
Now you're back in India.
#
How do you decide what to do at this point?
#
Is there a worry about the humdrum of daily life and the routines taking over or do you
#
straight away just continue doing what you're loving, but you know, engaging with it in
#
So I did, you know, I was fully involved in our company.
#
And one of the things that I did in the company, I was in fact, one person once described me
#
as the official trainer of the company, trainer, I think he meant it in, I think he meant it
#
as a compliment, but I'm not sure because, because I used to do a lot of training and
#
I would get groups of people together and we would talk about different things.
#
And one of the things that we talked about was India and what we saw around us in the
#
economy and about policy issues and about what we needed to do as a country, as a country
#
and what we needed to do as a company.
#
And then I did some of these workshops, they were like three day workshops with different
#
groups of people that was sort of summary versions of my course.
#
The outcome of one of those workshops was a vision statement for the company, which
#
was that we wanted to be a developed company in a developing country.
#
The logic was that we wanted to be, we said, how will, how will India get to be a developed
#
It'll get to be a developed country if certain, if certain enterprises and individuals move
#
Everyone's not going to move at the same time.
#
So we should set our goal as a company to be a developed company in a developing country
#
and then hope that many more would join in that process and through that process we would
#
as a country become developed.
#
So this was the, this was sort of the perspective even in the company.
#
And I started to get involved in things outside of work in, in India.
#
I mean, through the Confederation of Indian Industry and quite early on I did a couple
#
of programs, again, boiled down versions of my course in a day or two days for groups
#
of people from industry outside.
#
And did one in Bombay, one in Pune, started to get involved in various CI committees at
#
the local Pune zone level, at the state, Maharashtra state level, Western region and national.
#
And that gave me a huge opportunity to start getting involved in policy issues of things
#
that mattered to me so, and many things seem to matter.
#
So you know, technology issues, higher education issues particularly, but also then later on
#
international business, trade policy, a bunch of things related to affirmative action, a
#
bunch of different areas actually.
#
So CI really provided a wonderful platform to engage with development issues.
#
And you know, the economist Rakesh Mohan, I remember when we were chatting one day and
#
he said, you know, he said in India, he says, we have relatively few good people.
#
And I said, what do you mean relatively few good people?
#
And he says, well, he says relatively few people who want to do things and get involved
#
in things outside of their own sphere.
#
So you know, people in industry who want to go beyond industry, as an obvious example
#
And as a result, if you're keen on doing that, there's ample opportunity to do it.
#
And I've always felt that, you know, if you look around us in India, there's so much opportunity
#
to contribute everywhere.
#
And you can have much more fun and much more impact and really, really engage with things
#
much more than you can in any other place.
#
So that's, that's what makes it, that's what makes it so enjoyable.
#
So a common impression that some people have of the business environment of pre liberalization
#
India was that with the state having such a heavy hand, you know, you had to be cronyist
#
to survive and people will talk about Tata's as a one example, but otherwise they'll say
#
that that, you know, Dhirubhai was made by that environment of, you know, sort of making
#
connections everywhere, building networks, all of that.
#
Now you've mentioned in your book about how you and your family scrupulously kept politics
#
So you know, your dad would not, for example, call politicians or bureaucrats or whatever
#
home for dinner or lunch or whatever, they would be at an arms length away.
#
You'd do everything on sort of the straight and narrow.
#
Were you, were you guys an outlier?
#
I think there were others, there were others too.
#
And let me make one comment, by the way, about Dhirubhai Ambani, which is that, yes, you
#
know, he had that reputation for being very close to government, but he never let it come
#
in the way of setting up really efficient businesses.
#
You know, he took, I think, advantage of every possible loophole that he could, maybe made
#
some loopholes too, but at the same time, he built an enterprise that was highly competitive
#
and world scale, you know, execute projects, executed brilliantly.
#
So you know, he didn't let that, let that cronyism influence his competitive choices,
#
which a lot of other Indian industrialists did.
#
I think a lot of others who were close to government use that closeness to government
#
to be inefficient themselves.
#
And as a result, when the economy opened up, they were, they were swept away.
#
And they, any number of names that we can come up with from both Bombay and Delhi, who
#
were prominent industrialists of the seventies, who are gone as industrialists and industrial
#
business families today.
#
The second, the second comment that I'd make about, about, about that was that I don't
#
think we were, we were not the only ones by any means.
#
There were many others like us who I think wanted to keep business, you know, industry
#
and government should stay some distance away.
#
It helped hugely that we were in Pune.
#
I think if we were in Delhi, it'd be much tougher.
#
Delhi is a much more incestuous, almost Byzantine place in terms of government industry relations.
#
I mean, I like Delhi as a city to visit, but I wouldn't like Delhi as a city to do business
#
I, you know, Pune, Bangalore, to some extent, Hyderabad, Pune, Bangalore, I think are much
#
more interesting, encouraging places to do business, maybe even Chennai.
#
One of the resonant parts of your book was where, again, you, you know, delve into the
#
personal and you talk about how when Manmohan Singh gave that 1991 reform speech, you and
#
your brother were so inspired and you sat down and it kind of made you want to do things
#
differently within your company as well.
#
Tell me a little bit about that, about the charge that you felt and where it took you.
#
So, you know, when we heard his budget speech and we heard the speech on television and
#
then I read the speech and then I used his speech, by the way, in my course for the entire
#
time I taught it after that, because I think it's really one of the great speech in itself
#
and it's such a watershed in, in change in direction.
#
And that speech, as I say in the book, led to my brother Farhad and me sort of sitting
#
down and saying, okay, how do we, what do we change in our business now?
#
And we said, let's, let's start by asking ourselves the question that if, you know,
#
at that time, all the products that we made were protected with import tariffs of anything
#
from 200 to 400%, right, 200 to 400%.
#
A lot of the inputs that we got also had 200, 400% duties on them.
#
So yeah, that's 200 to 400% tariff on the imported, on the, on, on the items we made.
#
We said, if it was at 0%, yeah, what would we still make?
#
What would we be competitive with?
#
And it was a sobering exercise because we sat down with our management team.
#
We looked at all of the products and we said, well, probably about half would not be competitive.
#
Even if we could get all the inputs at zero tariff.
#
So then we said, okay, what do we do?
#
So we said, we have to do two things.
#
One change what we do with technology.
#
So R&D, which was earlier focused almost entirely on indigenization, on doing locally what was
#
previously imported, you know, some component that was imported, make it here.
#
R&D now has to develop products that we can sell worldwide.
#
So that was the first goal and it took a while before that started to show up.
#
It took three, four years before we started to get a regular flow of products coming out
#
We increased the number of engineers in R&D.
#
It helped a lot that we had a couple of really good, capable people who joined one of whom's
#
our current COO actually in R&D as an engineer at that time and just did a wonderful job
#
of building out our R&D capability and team.
#
And the second thing we said, look, the world's going to be coming to India.
#
If we want to know how to compete with them, let's learn how to compete with them outside
#
So we decided to start exporting and go international as a way of forcing ourselves to learn how
#
to compete with the best outside of India.
#
And we said, if we can compete with them outside of India, we can compete with them inside
#
So in a sense, it was an inward looking approach, but a very effective one.
#
And as we started exporting, we suddenly discovered that actually these export markets were very
#
attractive, so we should do more just for the sake of the export markets and not only
#
as a learning tool for how to compete in inside the country.
#
And it would seem to be that even in this approach, even in saying that, okay, these
#
tariffs are going to go, we're going to have to compete.
#
What can we do to get better and all of that?
#
It feels that that approach is also a bit of an outlier approach, because a typical
#
approach that I would more expect is of industrialists wanting to protect their turf.
#
Like for example, the Bombay Plan of 1944 famously agreed with Nehru, Central Command
#
of the Economy and all of that.
#
And part of the reason, no doubt, was that they are insulating themselves from competition
#
and they are having a protected marketplace and all that.
#
And typically how interest groups in the US also work is that you will have corporate
#
interest groups which are always fighting to protect themselves from competition, which
#
is why I say that market friendly and business friendly are two completely different things.
#
Market friendly means you have free markets, you're benefiting consumers everywhere.
#
Business friendly means you're benefiting big businesses which will want to keep competition
#
out and they'll kind of hurt consumers.
#
And I would therefore imagine that industrialists and industry lobbies would actually not be
#
ambivalent or lukewarm about opening up too much because they also want to protect their
#
turf and their territory.
#
Like you said, many of the industrialists of the 70s just vanished.
#
So within the community, within the business community, for example, or within CII, which
#
you would go on to head, were there signs of these ambivalence?
#
Was your approach sort of the universal thing that, yeah, let's go, this is good for India
#
and we'll adapt and we'll be good?
#
It wasn't the universal approach.
#
It was a somewhat exceptional approach, but there were enough other firms that also believed
#
that this was the right thing for us.
#
I talk about how at that time, a friend of mine, Ashok Desai, and we'd become friends
#
because I read something he'd written on technology and I was doing my PhD.
#
I wrote him a fan letter, he wrote back, he sent me more things.
#
We started meeting, we became good friends.
#
And Ashok was the chief economic advisor at that time to Manmohan Singh.
#
And he put me on this group of industrialists that would meet each year before the budget.
#
And it was really striking to me that at those meetings with Manmohan Singh, every industrialist
#
would start off by saying, Mr. Finance Minister, you're doing such a wonderful job, your new
#
direction for India, opening things up, you're creating a completely new country, et cetera,
#
And they'd praise him to the hilt.
#
And then with four exceptions, they would say, but of course our sector is different
#
and we need continued protection and this is why.
#
And the exceptions were Ratan Tata, Keshav Mahendra, whoever happened to be that year's
#
president of CIA and me.
#
And after the first such meeting, I made this comment and I was clearly the least known,
#
I mean, completely unknown in that group.
#
And Ashok told me afterwards that he put me in the group because Manmohan Singh asked
#
him, saying that, listen, who's he?
#
And he says, no, you'll find him interesting, you'll find his views interesting.
#
And after the first meeting, when Manmohan Singh was saying bye bye to everyone, he said
#
to me, he says, keep saying the things you're saying, it's important to say it.
#
I thought, listen, great, thank you.
#
And I was basically saying that, listen, Indian industry is ready for competition with the
#
world and go faster and further than you already are.
#
And you also mentioned in your book, by the way, that you were placed between Ratan Tata
#
So you were on all the front page of newspapers and X-ray because everyone wanted to show
#
I mean, you know, and they couldn't show the two of them together without having me in
#
I mean, it was, in fact, it was a very funny consequence.
#
There was someone who later became our head of R&D, who joined us because he saw the photograph,
#
you know, he'd interviewed with us, he didn't know who this small company in Pune was, etc.
#
And he joined us because he saw that photograph and said, this guy's a cool guy.
#
I had a similar bizarre experience where around 2009, Business Week magazine made a list of
#
India's 50 most powerful people.
#
And for some reason, I presume it was my blogging or whatever, they put me on it and they did
#
it in alphabetical order of last name.
#
So I was between Sachin Tendulkar and Lalu Prasad Yadav, so in a sense, equally distinguished
#
Now, from the scene that you've just described that, you know, Ashok Desai calls you along
#
with all these industrialists, Manmohan is chatting with you, he's having a personal
#
word, he keeps saying what you're saying.
#
From this, we, you know, move to the current day, where I'll read out another passage from
#
your book where you write, in CII, we always say that we do not see any merit in criticizing
#
We would rather offer constructive criticism in private.
#
I agree with that approach.
#
Public criticism fosters defensiveness more than receptiveness.
#
My experience, though, is that we very rarely, and that too only with highly selected ministers,
#
often criticism in private too.
#
I will make an assertion.
#
I know no industrialist today who thinks this government is open to criticism.
#
And it is not only industrialists.
#
One of our leading economists returning from a pre-budget meeting led by the Prime Minister
#
in January 2021 said people were not giving bad news to the government.
#
So is this change the sign of something deeper or does it just have to do with the individuals
#
in charge at this particular moment in time, because you've elsewhere, you know, praised
#
Arun Jaitley and spoken about how well you got on with him.
#
And in a different episode, I mean, I've chatted with multiple guests about how at one time,
#
as far as the Finance Ministry was concerned, there would be a certain continuity after
#
So, you know, in Vajpayee's time, the Finance Ministry would also be talking to Chidambaram,
#
also be talking to these guys.
#
In 2014, when the BJP won, you know, there was a certain continuity of policy for a while
#
from Chidambaram's ministry to Jaitley's ministry till, I mean, after a few months of that,
#
everything kind of turned around and went to hell.
#
And that's another story.
#
So there was that policy environment which speaks of openness, which speaks of conviviality
#
where you're, you know, always seeking out views, speaking to stakeholders.
#
You know, has that gone?
#
And if it's gone, is it because of individuals who happen to be in power and things may get
#
better when other people come?
#
Or is it because of change in the political and governing culture where things like this
#
have just ceased to matter?
#
I'll give you an explanation, which it's sort of my theory.
#
And I'm not, again, I'm not making any claim that it's the right theory, but it's the only
#
theory that I can figure out that seems to make sense to me of what I see.
#
I think it has to do with if the minister has lost an election, has seen power as minister
#
and has then lost an election, that teaches humility.
#
With humility comes openness and receptiveness to input.
#
So that was true of Arun Jaitley.
#
That's true of Nitin Gadkari.
#
It's true of a few ministers, but very few ministers in the current government.
#
And you can make a list and if you make that list, I think you'll find that there are very
#
few who were ministers earlier because you'd have to go back to the Vajpayee government
#
And then they lost power and then came back as ministers later on.
#
I think that teaches humility when you lose power and it teaches openness.
#
If you've only experienced power, you've come to power, you've played whatever roles in
#
other walks of life, et cetera, you've become a minister, maybe you start to believe in
#
your own infallibility and your own ownership of the truth.
#
And that then makes one less open.
#
So that's my explanation.
#
I think it's a sort of pragmatic, non-ideological explanation, but I find it convincing.
#
And to take it further, when Aakar Patel and I recorded an episode, one of the things we
#
speculated on is this vicious circle where you get a sense that somebody in power doesn't
#
want to listen to criticism or contrary views.
#
So nobody gives them contrary views.
#
It's a vicious circle and then you have an echo chamber.
#
And that's exactly what then happens.
#
And that's why I think people would say things, Arun Jaitley, who I really liked, I really
#
got on very well with and I really appreciated and liked, he loved to gossip and you would
#
have the most wonderful, hilarious conversations about all a variety of different things.
#
He wasn't necessarily that interested in engaging in deep policy discussions, except on certain
#
topics where he was and he was incredibly sharp and receptive and bright and articulate
#
Nitin Gadkari is also like that, you know, engages, keen on input, wants to hear everything.
#
I think very, you know, that's what makes for better policy, it seems to me.
#
So I don't know if you can say this on the record, but did Mr. Jaitley know about demonetization
#
before it was announced?
#
But the word is that he found out about it very, very little before it actually happened.
#
This is not something he ever told me.
#
So let's take a quick commercial break and when we come back from the break, we'll really
#
dig deep into your book because we've been talking about your life so far, taking digressions
#
and all of it is so fascinating.
#
And now it's time to also talk about the book and your many insights in there.
#
Long before I was a podcaster, I was a writer.
#
In fact, chances are that many of you first heard of me because of my blog, India Uncut,
#
which was active between 2003 and 2009 and became somewhat popular at the time.
#
I love the freedom the form gave me and I feel I was shaped by it in many ways.
#
I exercise my writing muscle every day and was forced to think about many different things
#
because I wrote about many different things.
#
Well, that phase in my life ended for various reasons.
#
And now it is time to revive it.
#
Only now I'm doing it through a newsletter.
#
I have started the India Uncut newsletter at indiancut.substack.com where I will write
#
regularly about whatever catches my fancy.
#
I'll write about some of the themes I cover in this podcast and about much else.
#
So please do head on over to indiancut.substack.com and subscribe.
#
Once you sign up, each new installment that I write will land up in your email inbox.
#
You don't need to go anywhere.
#
So subscribe now for free.
#
The India Uncut newsletter at indiancut.substack.com.
#
Welcome back to The Scene in the Unseen.
#
I'm chatting with Naushad Forbes about his wonderful book, The Struggle and the Promise
#
and the emphasis there, of course, being on the promise, but we have to talk about the
#
So we've spoken about sort of this longer sweep of history of the scribe where once
#
there was much more inequality.
#
We were all equally poor.
#
That's the way the world was.
#
Things changed over the centuries and eventually we got here.
#
Now tell me a little bit about India.
#
Like you quoted from this Economist article of 1991, where eloquently you said, quote,
#
the Economist did a survey of the Indian economy in June 1991, in which it said, and now you're
#
quoting the Economist, nowhere in the world is a gap between what might have been achieved
#
and what has been achieved as great as it is in India, stop quote.
#
And it reminded me of another famous quote, but I can't for the life of me remember who
#
said it, which is that the saddest words in the English language are the words it might
#
You know, so lay out briefly where we kind of went wrong, because at another point, you
#
compare us with Southeast Asia and China, like you, again, I'll quote this para.
#
In 1960, South Korea and India had much the same per capita GDP.
#
In 1980, China and India had much the same per capita GDP.
#
South Korea at $32,000 is now 15 times richer than we are.
#
And China at $10,300 is five times richer.
#
It's all a matter of growth rates.
#
And then you talk about the different growth rates and all that.
#
So you know, where did we go wrong in broad strokes, if you can sort of paint that picture.
#
So where we went wrong, I mean, and this is not, this is not me.
#
This is, you know, many, many economists, Jagdish Bhagwati and many others who've talked
#
about this is really in the role of the state and the trade policy that we followed.
#
And the role of the state was increasingly intrusive.
#
It brought in controls and regulations and so on.
#
This particularly grew after Nehru.
#
With Nehru, there were some calls that were perhaps wrong.
#
In particular on, I think the whole role of public sector primacy in the economy, second,
#
you know, locating public R&D and autonomous R&D institutions instead of in the higher
#
education system, and probably emphasizing higher education over school education.
#
I would say those three areas were mistakes on Nehru's part.
#
But I'm convinced that if Nehru had lived by the late sixties, early seventies, we would
#
have changed direction.
#
I think in where we really went wrong was under Indira Gandhi, where the controls grew
#
It was supplemented by a distrust of institutions that Nehru had really built up in the country,
#
independent institutions that he gave a lot of credibility to.
#
And as a result, any institution that came in the way of Mrs. Gandhi's way of wanting
#
to do things, she squashed and tried to control or change the head off or whatever.
#
And a real shift inward in terms of trade policy, you know, and a focus on import substitution,
#
you know, very high tariffs, tariffs that got higher with each passing year, a ban on
#
imports of all manner of different items and a very, we became a very inward looking country.
#
Things started to open up under actually first under the Janata government and then under
#
Indira Gandhi when she came back in 1980, her last term in government, she started to
#
open the economy up a little bit, particularly in terms of technology imports that started
#
to open up in the eighties.
#
And then the opening up continued under Rajiv Gandhi, again, you know, on technology, on
#
foreign investment, on moving away from the public sector, playing a prime role in the
#
economy, et cetera, that all started under Rajiv Gandhi.
#
But the really decisive shift happens in 1991, where you then say, okay, openness on the
#
trade policy front, so tariffs come down dramatically, the rupee is devalued to go with the lower
#
tariffs, the scrapping of industrial licensing, otherwise we were the only country in the
#
world that had maximum capacity restrictions, you know, that if you had a license plant,
#
you couldn't produce more, you could only produce up to that limit.
#
So you know, all of that went, so industrial licensing was scrapped.
#
We had a big change, for example, in capital issues, where earlier, you know, any capital
#
issue by a company, when they listed, the price of the issue would be determined by
#
the controller of capital issues, not by the firm.
#
So that was again, we moved away from that, firms were able to set their own price, decide
#
And you see a huge boom that takes place in the nineties, with many new enterprises getting
#
started, many small firms starting to really take off and grow big, and many of these older
#
enterprises that couldn't cope going by the wayside and disappearing.
#
So you see that story really starting to emerge from the nineties onwards.
#
And it helped that there were sectors that started to emerge then.
#
The IT services sector really comes into its own.
#
It started earlier, but it really comes into its own in the nineties, where it becomes
#
a big engine of growth.
#
The pharmaceutical sector, same, comes into its own in the nineties.
#
And by the late nineties, the automobile and auto components sector really starts to take
#
off and come into its own.
#
And those three, I think, industry segments really start to power the India economic story
#
And then in the 2000s, we see many new sectors start up, you know, a lot of the services
#
sectors that we've seen, whether it's healthcare, whether it's education, and a lot of the services
#
that retail, shopping malls, construction, huge construction boom, and so on, which sort
#
of joins the India growth story.
#
So here's again a broader question.
#
Like first of all, before the broader question, obviously, I think people often understate
#
how bad India, Indira truly was, like, you know, people remember her for the emergency,
#
but I just think that her economic policies were crimes on humanity.
#
Their economic policies were terrible, they kept millions in poverty for decades longer
#
And it was all sloganeering.
#
You know, this Garibi Hatao was a populist slogan to end all populist slogans.
#
And you know, it was a classic illustration of trying to fool enough people, you know,
#
to get reelected without actually wanting to do anything that improved matters.
#
So here's the broader question.
#
Like when we look back, I think that fundamentally, it is not simply a question of choosing this
#
Like Nehru famously once said to JRD Tata that, you know, quote, do not talk to me of
#
profit, it is a dirty word, stop quote.
#
You also mentioned in your book about how when it comes to what we would today call
#
Atman Nirbhartha, he once said, I'd rather have a secondhand product made in India than
#
a first rate product made elsewhere.
#
And that whole mindset that, you know, looking at the economy as a zero sum game, that mindset
#
of that distrust of private enterprise, that desire for the state to control everything,
#
a lot came from that mindset.
#
Now we might well say that, okay, it's fine, we suffered through that, but the arc of history
#
goes towards freedom in this case, and 91 happens and so on and so forth.
#
But what has happened there is that, you know, you talk about 91 to 2017 years when we kind
#
of did well, various other economists I speak to like Pooja Mehra, Ajay Shah, Shruti Raj
#
Gopalan, they would end that at 2011 when things kind of start going down.
#
But that's a different matter, that's a technical matter, you know, it depends on which indicators
#
you're kind of looking at.
#
But the sense there is, and this is, you know, Ajay has also made this Lamentin episode that
#
he's run with me, that, you know, at that time, there was like a perfect storm in the
#
sense not only was there a crisis which allowed you to carry these reforms out, but there
#
was that intellectual blast and a community of elites who believed in them and who cared
#
And Ajay's contention is that that has dissipated, that that is not there anymore.
#
So not only has a momentum gone in a political sense, but even that community of thinkers
#
who believed in it, the Ashok Desai's of the world, for example, are no longer there.
#
Ashok, Monte Kaluwalia, Rakesh Mohan, NK Singh, all of them.
#
Yeah, in retrospect, people we can look back and think of as such great figures in our
#
And one of the things Ajay keeps talking about is how we need to build that back, build a
#
community of young people who can kind of take that space.
#
Now, a couple of things, one, therefore, there is the pessimism, because I always have to
#
express pessimism at some point, that that arc doesn't necessarily go towards freedom.
#
And in a social context, I just feel we're in a terrible place and maybe we can come
#
But even in the context of what's happening to the economy, it's kind of going downhill.
#
But the deeper question there is, and you spoke about Garibi Hatao and why it is such
#
a powerful slogan, the deeper thing here is that the truths of economics, that trade is
#
a positive sum game, that there is spontaneous order in economies, they don't need to be
#
organized from the top down, all these deep truths of the way economies work are unintuitive.
#
We are wired to think of the world in zero sum ways.
#
We are wired to think of anything that is there to have been built by someone, to have
#
been planned by someone that whole notion of spontaneous order doesn't apply.
#
So therefore, it's even though a slogan like Garibi Hatao is, you know, when and when you
#
look at the policy she's carrying out is simply nonsense, they are intuitive.
#
And therefore, they play into an easy kind of populism.
#
Like one of the ways that I think one of the core aspects of populism everywhere is that
#
it depends on simplistic narratives.
#
It's simple, you know, even when Trump came to power, for example, yeah, so his narrative
#
for why jobs are going down in middle America are one, immigrants are coming and taking
#
your jobs, immigration bad, and they're shipping your jobs to China, China bad.
#
And we know that's not true, right?
#
But simplistic narrative sell.
#
And even today, my worry, therefore, is that a politician's incentive is always going
#
to be the next election, he will do what gets him votes.
#
And what will get him votes are these populist narratives.
#
So you know, and it almost if I am to sort of take a darker view than I actually do,
#
but I'm perhaps overstating it, it's almost like a lucky accident that 91 could happen
#
that those people were there, that that crisis happened.
#
And we could lift those 300, 400 million people out of poverty.
#
But that line of causation is not sort of easily understood.
#
So what's your sense of this?
#
So you know, I, the argument that I, that I try to make is that reform happens in India
#
So I like that phrasing, but that doesn't mean you can't prepare for to take advantage
#
when the lucky accident does happen.
#
So what is the accident that you need to have come together?
#
You need a committed politician.
#
So a minister who wants to get something done, a senior bureaucrat, secretary or joint secretary
#
is at least who know what needs to be done and have the competence and so on to do it.
#
And third, preparation on what needs to be done.
#
So my argument is that, say for example, from CIA, from the Confederation of Indian Industry,
#
we should constantly be prepared and ready with the what needs to be done.
#
That's within our control.
#
Getting the right bureaucrat, getting the right minister is not within our control.
#
But when the minister and bureaucrat lines up, we better make sure that that third star
#
of being prepared with what needs to be done is ready and available in granular, detailed
#
Because if it is, then suddenly something will move.
#
What brings that minister together with that competent bureaucrat is an accident.
#
So that's how I think reform happens.
#
So I think we had that preparatory work that had happened.
#
The M document from Montaic and so on, Ashok Desai with his influence, et cetera.
#
But you had this M document, you had an industrial policy paper that had been worked on by Rakesh
#
All of this stuff was in place.
#
A lot of contact with CIA, a lot of input from CIA at the time and Tarun Das and so
#
So all of this is in place in 1991.
#
You then have Manmohan Singh coming in.
#
You have Montaic as the finance secretary.
#
You have Ashok Desai as the chief economic advisor.
#
You have NK Singh as the revenue secretary.
#
You have Rakesh Mohan in the industry ministry and things happen.
#
It is this happy accident, but it's happy accident that only comes to fruit because
#
there was that preparation that was in place.
#
And I think that's how we have to see reform.
#
So on higher education, we need to be clear.
#
These are the things that we need to do.
#
We need to have policies worked out, same on technology and CSIR and everything else.
#
We should be clear on what needs to be done.
#
And then if we're lucky enough to get the right minister of science and technology and
#
the right secretary, DST, we can move.
#
I mean, you mentioned Lincoln earlier and there's also this quote by Lincoln about how
#
if he has five hours to chop down a tree, he'll spend the first four hours sharpening
#
the axe, which is kind of what preparation seems like.
#
If I am to be a little negative about it and come up with another metaphor, I would say
#
it's like running into a wall again and again, hoping that at some point a door will open.
#
Sometime you hit the door.
#
You have to have that patience.
#
You have to have that patience.
#
If you have that patience, I think we've seen things move and reforms happen, which you
#
never thought would be possible.
#
I mean, GST is a very good example, right?
#
I mean, GST was spoken about for the first time by Yashwant Sinha when he was finance
#
minister in the Vajpayee government, then repeated several times by Chidambaram in the
#
And then it comes back and actually happens under Modi and Jaitley.
#
But the implementation was massively botched, I have to say.
#
But at the same time, it took time and the net effect of GST is positive.
#
At the end of the day, could GST be better?
#
But was GST better than what we had just before GST?
#
I know small business owners who will actually disagree with that a bit, but let's not get
#
They do because of how cumbersome the formalities are, it adds a big regulatory burden.
#
And the fact that you have to do registrations and returns in each state in the country is
#
a very stupid thing to have done.
#
It got all the states to go along, but it's very onerous in terms of the burden it places,
#
especially on small firms.
#
So I take the point, but if you say is it better than what came before, I mean before,
#
every state had the same requirement.
#
You had to file a sales tax return in every state.
#
So it was no less burdensome even for small firms then.
#
And you didn't get the offset of input taxes.
#
So one of the writers I find most insightful on the subject of the state is of course Francis
#
He's written those two great books about the history of the state and he's also written
#
a different book on governance.
#
And I love the framework he brings to mind when we talk about the state where he talks
#
about the scope and the strength of the state, right?
#
Scope being how many things it does and strength being state capacity, how strong it is in
#
And it kind of strikes me that the problem with India is that the scope is too large
#
and the strength is too small.
#
So we have a weak state that does many things instead of a strong state that does a few
#
things but doesn't bloody well.
#
You know, things like law and order, defense, and you know, we kind of agree on that.
#
But we have a state that does many things and does them badly.
#
Another framework that I find interesting to think about it is James Buchanan's framework
#
of looking at the state where he talks about on the one hand a state that is protective
#
and productive and on the other hand a state that is predatory.
#
And states, by their very nature, as Public Choice Theory will tell you, tend to move
#
towards a predatory because power always corrupts and any state will always find ways to accumulate
#
more power, to exercise more power.
#
Even you've given examples of how during COVID, you know, at one point I think you
#
mentioned something like it takes four hours to call a lockdown and four months to come
#
back from it to get the economy working again.
#
And there is that general tendency through history of just states getting more and more
#
And I think in India, you know, I think the rule of law is absent.
#
Maybe privileged people like you or me can use our connections and find some kind of
#
... but that's not the rule of law.
#
For most people in this country, the rule of law is simply absent, especially for the
#
underprivileged, if you're Muslim or Dalit or a woman or whatever.
#
And we are fundamentally a predatory state and that's like kind of pretty much all we
#
You've spoken at length about this, you know, how we should... I'll read this passage out
#
by you where you write, the state should stop doing many, many things, owning the public
#
sector banks and insurance companies, fixing pharmaceutical and stent prices, telling colleges
#
what fees they should charge, determining if we should stand for the national anthem
#
and when it should be played, and dictating whether we can eat beef or not.
#
I see this not as an ideological choice, but as a practical proposition.
#
If there is one thing I have learned to appreciate of the workings of our government, it is that
#
the commitment and knowledge of the highest levels of government, secretaries, additional
#
joint secretaries, so on, is matched only by the paucity of talent further down the
#
This means the state has very limited implementation capacity and if we wish to progress, we had
#
better focus on just a few things and get the state out of the way for everything else,
#
leaving the rest to India's entrepreneurial energy, private enterprise and the market
#
And this is also an argument my friend Ruben Abraham often makes about the opportunity
#
cost of state capacity, that on the one hand there is of course a principled argument that
#
the state should only do A, B, C and not the rest of the alphabet.
#
And on the other hand, there is the opportunity cost argument, which you also made eloquently
#
that the state has the capacity to only do three things, to do the ones that matter.
#
So I wanted to elaborate on this a bit, but the larger question that I keep coming to
#
is how do we ever get there?
#
Like you've studied economic history, is there an example of the state actually getting
#
out of the way of getting smaller, like apart from a major war or destruction or whatever?
#
Like even when Reagan came to America saying pretty much the same things, what we found
#
was that even within him, the state just expanded.
#
It's like it was a beast that even he couldn't find.
#
And you have this great quote by him in your book where you say the nine scariest words
#
in the English language, I'm from the government and I'm here to help, Ronald Reagan said
#
So tell us a little bit about this because it is at one level, it is an ideal and both
#
of us would agree that this is our utopia.
#
The state does a few things, does them damn well, otherwise it enables and protects civil
#
society, which does its own thing.
#
But is there movement towards it?
#
Is movement towards it possible?
#
So two examples, one from the UK and one from ourselves.
#
So in the UK, Margaret Thatcher is, I think, a great illustration of the state actually
#
getting out of doing many, many things.
#
Private is a huge privatization program where British Leland, British Airways, British Telecom,
#
all of them get privatized.
#
The move away from the state controlling exchange, getting rid of exchange controls, getting
#
rid of a whole bunch of things again, getting the state out of doing R&D in terms of privatizing
#
what was then called the National Research Development Corporation in the UK.
#
So I mean, many, many, I think a very significant move away from the state that was sold to
#
the public in very popular terms.
#
And it comes back to a point that you made earlier on, which is that populist rhetoric
#
sometimes can pick simplistic solutions or simplistic policies that are only populist
#
and sound good but don't have any substance and certainly don't have any effect.
#
But you can also come up with popular communication that is powerful and pushes reform forward.
#
And I think a great example of that is actually what the Thatcher government did in the UK
#
where they hired Saatchi and Saatchi as an ad agency to sell their reform program to
#
I think probably one of the best investments they made at the time.
#
Now take our own example, post 1991, the state literally became smaller.
#
You know, now, okay, it didn't literally become smaller, but in relative terms, it certainly
#
If your metric is government officials or bureaucrats per unit of GDP, the state became
#
dramatically smaller between 1991 and 2017, right?
#
And it's maybe something that we should try and measure sometime.
#
Maybe I'll try to do it.
#
But it became dramatically smaller because the economy took off and the government stayed
#
It didn't get smaller, but it didn't get, you know, it didn't keep growing.
#
And it got out of doing many, many things.
#
Famously, in the 1991-96 period, there were whole government departments that were transferred
#
to the railways because the railways were seen as this huge employer and, you know,
#
what difference would a few more thousand people make?
#
So, you know, when DGTD was closed, when MRTP was scrapped, there were many of those agencies
#
that were wholesale transferred and some of them were transferred even to the railways
#
simply because there was no other place to put them.
#
Have you heard of the CCA?
#
So, I'll relate this for my listeners very quickly anyway.
#
No, but I don't know what happened with them.
#
So, actually in 1984, this central, this bureaucrat somewhere got an application from this department
#
of the Tamil Nadu government asking for an increase in their budget.
#
And this department was called CCA.
#
So he decided to look into it.
#
No, no, I haven't heard of the CCA.
#
You haven't heard of this one?
#
So this department was called the CCA.
#
So he decided to look into it, that they've asked for an increase in their budget.
#
I think it's about 83, 84.
#
And so what, you know, what is this department?
#
So then he goes back into the history of it and the history of it is this, that Winston
#
Churchill used to be a fan of cigars, right?
#
And then World War II breaks out and all his cigars, they were coming from Cuba because
#
of course, he's an aficionado and that's where the best cigars come from.
#
But that trade route closes down because of World War II and he can no longer get his
#
Now, he's got to have his cigars because remember, he's saving the Western world.
#
The second best cigars in the world apparently were a place near Chennai called, I've forgotten
#
It starts with T and it's a very long name.
#
Apologies, I'm not, I'm not, I'm not dissing termilians, but Tiruchirappalli or something
#
So a department is set up in the colonial government of India to get those cigars across
#
And the department is called CCA Churchill Cigar Assistant, right?
#
So World War II ends, India becomes independent, Churchill dies until 1984, this department
#
And then they actually have the audacity to apply for an increase in their budget.
#
And this to me is sort of a classic illustration of how it is so hard to downsize the state.
#
But you know, again, I'll quote from what you say about the 91 reforms and how they
#
did actually in a sense downsize state where you write quote, I have long held the view
#
that we should not seek better government, we should seek less government.
#
That is my reading of the 1991 reforms.
#
The state retreated from industrial licensing, control of foreign investment, public sector
#
monopolies and everything from airlines to steel and opened up to imports.
#
The resultant jump in growth multiplied our GDP eight times from 340 billion in 1991 to
#
It is only in the last four years that we have seen growth sag and stop quote and so
#
But you know, when we say less government, when I say less government, I am thinking
#
of the predatory state.
#
If it feeds upon us less, we'll have more space and more energy to actually do things.
#
People often represent it as oh, who will look after the poor then or we need the state
#
But look at what the state is actually doing in the role that it plays in our lives.
#
So the state in India is largely kind of predatory.
#
At one point, for example, during COVID, you've written here about how your company was coping
#
and you wrote quote, we need passes for everything.
#
We need a pass to bring people to work, a pass to source packing material, a pass to
#
get the logistics providers in, another pass to get a truck in and on its way to the customer.
#
Each takes time and is variably interpreted by each individual policeman, stop quote.
#
And in episode 250 of the show, one of my friends was a small, you know, who runs a
#
small factory in Narain, you know, I had also kind of spoken about this.
#
And much as licensing went, we did some reforms in 91, but like in 2009, for example, I read
#
about the Four Seasons Hotel opening in Bombay, where they needed 165 licenses to open 165
#
and of which two were for different weighing machines, one for the kitchen and one for
#
So there was still so many reforms pending and I think just seeing the massive impact
#
of the limited reforms, I think some of us started celebrating too soon.
#
And there is still kind of so much work to be done.
#
So tell me a little bit about the fundamental reforms that 91 did not tackle.
#
So 91 reforms, you know, as that list, that list covers what it did tackle.
#
What were the areas that were the big areas that I think were untouched?
#
We did not touch education, right?
#
So huge area, if you ask me, both school and college education.
#
Now you can make some argument that school is a, you know, a joint subject between both
#
So, you know, okay, so it needed to take the states along, but higher education is largely
#
union could have been addressed.
#
We did not address the role of technology and technology policy in 1991.
#
We did not address how bureaucrats are recruited, promoted, rewarded, given feedback, assessed.
#
Same mechanisms existed there.
#
And we did not really address the question of union state relations.
#
Some of that emerged a bit later on, but in somewhat fragmented ways.
#
Those are some of the bigger areas that we did not address.
#
One thing that we did address, of course, much later is the indirect tax system with
#
So that was not initially addressed, but came much later.
#
Another area that was not addressed was labor reform, which was, if you may remember that
#
Manmohan Singh spoke about it as finance minister, it was called an exit policy.
#
It was a terribly named policy.
#
And the moment it was talked about, there was so much opposition from within the Congress
#
government itself that it was immediately killed.
#
And then it only came back actually under the current government in 2014.
#
And finally, two years ago, we saw these 44 regulation labor laws get turned into four
#
labor laws, a step in the right direction, but it's a step.
#
There's more still that needs to be done.
#
And then agriculture, agriculture has hardly been touched.
#
And the farm laws in that sense, I think the farm laws were done wrong and they were done
#
without institutional proprietories in place.
#
But the objective was right and the direction of the laws were actually right for actually
#
helping agriculture in the country.
#
The other area is agricultural taxation, which everyone sees as this, you know, this complete
#
holy cow that you can't touch.
#
And I've never understood why, because I mean, you can at least start by saying that,
#
listen, you know, let's tax agricultural income, let's start at a high level.
#
Let's start at one crore a year, you know.
#
So tax agricultural incomes over one crore a year to begin with, you know, how can anyone
#
I couldn't agree with you more about the farm bills.
#
In fact, Ajay Shah and I did an episode called the tragedy of the farm bills, which is which
#
I'll link again from the show notes, talking of the labor laws.
#
Now I remember when the labor reforms happened a couple of years back, because they came
#
from this government, which I oppose as much as anyone, but because they came from this
#
government, there was a loud outcry against them from people who hadn't even thought about
#
them or, you know, and they were all like, who will look after the rights of the workers
#
Again, conflating intention with outcome, you know, which is a most common mistake people
#
often make when thinking about policy and economics, that, you know, we mistake intention
#
And in this case, you might imagine, oh, the labor laws, the intention is to help workers,
#
but actually they hurt workers much more.
#
And they hurt workers much more because they prevented that explosion in labor intensive
#
manufacture would which would have taken India so much further ahead, you know, and that
#
was a route China actually took.
#
And now that China has, you know, elevated themselves so much, that kind of low cost
#
work is actually, as you pointed out, shifting from China to places like Bangladesh and Vietnam,
#
and we are still missing the boat.
#
So tell me a little bit about this.
#
Why is shifting to manufacturing jobs so important for an economy?
#
What are the kind of different laws that ensure that it did not happen in India?
#
And why are we still stuck?
#
So it, you know, first, the reason manufacturing is so important for all developing countries
#
is that it's the only high quality job that's available in abundance on mass scale for people
#
That's the single reason, right, that you have good quality jobs available on a mass
#
scale for people with low skills.
#
Now what do I mean by good quality job?
#
Good quality job is one way, which is higher productivity to start with and where you have
#
the ability to keep raising productivity on a consistent basis.
#
And we know how to do that for manufacturing.
#
We've been learning more and more and more for 200 years how to keep improving productivity
#
So we know how to grow productivity in manufacturing in the long run.
#
And that makes manufacturing jobs a good quality kind of job.
#
Now what does it give you?
#
If you move people from the archetypes, you move people from sort of marginal productivity
#
in agriculture to employment in a factory, you get a jump, a massive jump in productivity.
#
I think the Indian multiple is 20.
#
So someone working in the modern manufacturing sector is 20 times more productive than the
#
average person working in agriculture.
#
So average agriculture, average in manufacturing.
#
And then you have the ability to keep growing that productivity of the manufacturing job
#
And then you have the ability to keep raising incomes, et cetera, in that level.
#
Now we have 30 million manufacturing jobs in India out of workforce of 400 million.
#
If you take Bangladesh, Bangladesh has many more, not in absolute terms, but they're much
#
smaller, their population of 200 million on our 1,400 million, they're 1 7th our size.
#
They have manufacturing jobs.
#
Manufacturing is a much larger share of their workforce than it is for us.
#
And within that manufacturing workforce, many more women work because they have the specialization
#
So 40% of their garment industry, 40% of their labor force is employed in the garment industry,
#
and a majority of them are women.
#
And as a result, Bangladesh has a much higher female labor force participation than we do.
#
We have the world's lowest female labor force participation ratio out of the top 20 economies,
#
So for all those reasons, manufacturing makes a lot of sense for us.
#
Now, what holds us back from having more manufacturing and labor intensive manufacturing, decades,
#
if you like, of legacy from the labor regulations and the way they were enforced.
#
For decades, if a case went to court, by and large, the decision would be in favor of labor,
#
To close a factory, you needed permission from the government.
#
The government wouldn't give permission.
#
Instead, they would tell you that, listen, don't pay your electricity bill.
#
If you don't pay your electricity bill, they'll cut off the power.
#
When they cut off the power, then you can claim that since my power's been cut off,
#
I mean, you find all these weird sort of long way around, scratch my left ear with my right
#
hand kind of approaches.
#
And it was long pending.
#
And as a result, there was this mindset that developed in Indian industry that more labor
#
And I think that mindset is still very strong.
#
It's still there in industry that we do not see employing more labor as the right thing
#
to do for our own growth going forward.
#
You see you want to minimize the amount of labor that you employ.
#
It's exactly the contrary impulse that a country like ours needs.
#
So that mindset will take time to change.
#
It will change, as I say, these four labor laws that we've now seen is a good step forward.
#
But it's a step forward.
#
And we have to stick with them for a period of time and get people used to a new way of
#
working and then keep moving forward in the direction of labor reform for a long period
#
of time before it will start showing up in people starting to say, listen, employing
#
a lot of labor is a good way to do business in the country.
#
There's a second thing that we can do.
#
I think we should actively seek some of the big labor-intensive manufacturers to set up
#
So the work that's been done to get Foxconn to come into India is a very sensible thing
#
because they're highly labor-intensive, they employ the largest factory in China, I talk
#
about as 400,000 people working in it, one factory making iPhones.
#
We need those kinds of factories in India.
#
Li and Fung, they employ hundreds of thousands of people in China making garments.
#
We need to find ways in which we can attract them to set up these large plants in India
#
And then maybe with the power of a few of those examples, more Indian industrialists
#
will start saying, listen, yes, a way in which I can progress, I can set up an enterprise
#
that can be highly successful that's very labor-intensive.
#
And then labor-intensive manufacturing can start becoming an attractive option.
#
We have everything that it takes, I think, but the mindset will need to shift very substantially
#
because we have to make up for 50 years of history, literally 50 years of history.
#
And adding to all those legacy labor laws, which this incentivized companies from growing
#
too big because you don't want to hire too many people, adding to that were also a whole
#
Like for example, you still aren't allowed to sell agricultural land for non-agricultural
#
So a typical move away where one farming gets much more productive and then many farms which
#
are struggling to kind of get by, you sell the land, factories are set up, and those
#
factories employ many people and that's how economies grow.
#
Like everywhere else in the world, the agriculture will perhaps employ 5% to 6% of people in
#
In the US and India, it's hovering somewhere between 40 to 60 exact figures are hard to
#
come by because informal sector and all that.
#
And we don't need 120 million people in agriculture.
#
And in fact, during the pandemic with the reverse migration that took place, 10 million
#
people moved into agriculture.
#
We grew our agricultural labor force.
#
I mean, CMI shows that the agricultural number of people employed in agriculture grew.
#
That's a damning statement for a country like ours.
#
And I remember in an election a while back, I don't remember which election, but Yogendra
#
Yadav made a statement to the effect of that, you know, if farmers have to go and join factories,
#
I'm telling you, I will not allow it, which is such a bizarre way of thinking because
#
you're romanticizing a life which is nasty, brutish and short, as Hobbes would have said,
#
and you are denying them that path to progress.
#
Like, you know, when people talk about how tough factory jobs are or, oh, this is a sweat
#
shop or, oh, what is the labor here, the point that they're forgetting is that the people
#
who voluntarily take up those jobs are taking it up because it is the best option open to
#
And you close that option off, they are getting into something much worse.
#
And you know, and it's actually not getting into something, they're coming from something
#
They're coming from something much worse.
#
And, you know, and by, I mean, we may have all of these, I can understand, you have all
#
these principled ideas about, you know, we must have really safe working, yes, we must
#
really look after everyone in factories, all of that, yes, I mean, you know, I understand
#
the instinct, but give people the choice, give people the choice to move out of agriculture
#
into jobs in factories, even if they aren't the kind of jobs that we see as being desirable
#
and high quality and, you know, of somehow of, you know, that would have all of the support
#
mechanisms that we would like to see as being a civilized kind of employment, you know,
#
give people those options, people in Bangladesh have that option, our people should have it
#
So mentioning Bangladesh, I remember this study by Oxfam many years ago, where, you
#
know, they wrote about how international outrage forced factories to lay off 30,000 child workers,
#
And obviously child labor is horrible.
#
Many of those kids starved to death, many became prostitutes.
#
And a similar study in 1995 UNICEF studied how an international boycott of carpets made
#
in Nepal, again by child labor, led to between 5000 to 7000 Nepali girls turning to prostitution
#
because a better option was denied to them.
#
So I mean, you know, and, you know, I don't think either of us is trying to make an argument
#
in favor of child labor, you know, or sweatshops, or sweatshops or any of that.
#
But I'm just saying that, you know, it's you have to look at where people are coming from.
#
And you know, let people get into these new jobs.
#
And when they get into these new factory jobs, then also in Bangladesh, what have we seen
#
We've seen the safety levels improve dramatically.
#
Because of demanding buyers that say, hey, listen, you know, you can't buy your garments
#
from factories where people are, you know, where they may die in a fire if the small
#
fire breaks out and it spreads through the whole building and they don't have safe exits
#
And people have been getting them sorted out.
#
So it's the jobs are improving in quality.
#
And China as well, where, you know, they've climbed so far of the value chain that a lot
#
of these are now leaving and going to Bangladesh and Vietnam and we are still behind and yes,
#
One of the truly thought provoking parts of your book, which made me I mean, all of it
#
is thought provoking, but a lot of it I'm familiar with.
#
But a part that I was that made me think for the first time was sort of the way you define
#
modernity and the role of the factory in it.
#
So at one point you write quote, as a society modernizes people adopt more modern attitudes.
#
These include a sense of personal efficacy, openness to new experience, respect for science
#
and technology, acceptance of the need for strict scheduling of time and a positive orientation
#
towards planning ahead.
#
Stop quote and all things that you can get from a productivity video on YouTube from
#
Ali Abdaal or Thomas Frank.
#
And then you quote Alex Inkel's his book Becoming Modern, where he points out that the two key
#
sources of modernity are the school and the factory.
#
Now the school everyone can understand.
#
Tell me about the role of the factory in this.
#
So the factory, the reason, the reason, you know, Alex did this study in six countries
#
in the sixties, one of the countries being India and one of them being actually at that
#
time East Pakistan or Bangladesh.
#
And when he did that study, he, he put the scale together as a kind of universal scale
#
And that was his, that was his argument.
#
And then looked at all those attributes and he showed how people who'd been to school
#
and been to school for a certain number of years moved more up that scale.
#
And people who worked in a factory move more up that scale.
#
Why is the factory a school for modernity?
#
It's a school for modernity because, you know, if you think of it, you come to work from
#
time, time A to time B. So you work to a schedule.
#
You learn that if you follow a particular process, you can be more productive.
#
If you can be more productive, then you can earn more as a result.
#
Third, if you use tools, technology, you can be more productive again, or it involves less
#
So you start gaining a respect for technology and science and so on.
#
Fourth, you learn to believe in your own, your ability to, to, to deliver your own destiny
#
instead of someone making your destiny for you in that if you do a good job and you produce
#
something that's better, you see the results that flow as a result of that, that starts
#
teaching the sense of efficacy and control that you have over your own, your own destiny
#
and outcomes instead of saying it's fate, instead of saying it's someone else who's
#
going to determine what happens to you.
#
So all those reasons, you start learning these modern attitudes in a, in a factory.
#
I've always found that very convincing from, from the time that I first read it years ago.
#
And you know, another interesting sort of thought provoking bit was where you write
#
quote, a thought provoking edit by TN Ninan in the business standard many years ago on
#
the horrendous Nirbhaya rape has always haunted me.
#
He pointed out how different the victim and rapist were in the parts of modernity.
#
The victim and her friend were educated with good job prospects and formal occupations.
#
The rapists were all in informal, unstable occupations with nothing that either taught
#
them modern attitudes or gave them a stake in the existing system.
#
The difference was not where the victims and rapists had come from, but in the education
#
exposure and employment of their families, stop quote.
#
And you know, something that I've been saying for many years, and I discovered through your
#
book much to my dismay that Manmohan Singh has a quote that says exactly the same thing
#
is that India lives in many centuries at once.
#
And this is sort of a heartbreaking sort of instance of that and an instance of the seen
#
It's kind of heartbreaking.
#
You've spoken about why manufacturing jobs matter more than services jobs, a bunch of
#
different reasons, but you've also interestingly spoken about tourism, about how tourism can
#
one be an industry that booms in India and of course, we have the raw material for it,
#
which is the beauty and the culture and all of that.
#
And to why it can also be a significant modernizing influence.
#
So tell me a bit about that and that opportunity we're missing.
#
So you know, if you look around at where I mean, I have I talk about this particular
#
resort Shillem between Bombay and Pune.
#
And Shillem is in this very rural area.
#
They've employed people from not by the thousand, but by the hundred from all the villages.
#
They very systematically consciously recruited locally and they've taught all of these girls
#
and boys have come from the villages how to behave with guests at a resort.
#
You know, so they and they they just they've learned they've learned all kinds of things.
#
They've learned hygiene.
#
They've learned politeness.
#
They've learned communication.
#
They've learned how to organize themselves, how to follow a schedule.
#
You know, and their lives, the lives of them, their families have been transformed in these
#
The villages are becoming.
#
I mean, I've been to Shillem maybe five or six times over 10 years.
#
And each time you go, you see that the villages that you go, that you drive through on the
#
way to Shillem are getting more prosperous.
#
There are now some shops that are opening up.
#
The shops mean that people not only are selling things, but someone's buying them.
#
You know, people have money to buy things and so on.
#
And it's you see you see that transformative influence of people who are starting to get
#
And the great thing is that they have jobs locally.
#
They have jobs where they live in the villages.
#
It doesn't mean that they have to all move to Pune or Bombay to get these modern jobs.
#
They're getting their jobs, these good jobs right there.
#
So that's the that's the power that we have of tourism.
#
I mean, we need a we need a thousand Shillems all around the country.
#
And we have many more than that.
#
Like I remember many like when we think of the typical tourist destinations in India,
#
it'll be like Kashmir in an erstwhile age, you know, Kerala, Rajasthan and so on and
#
But in 2003, when the tsunami struck, I remember I went with a relief team and I was also live
#
blogging while I was doing that.
#
And I traveled down the coast of Tamil Nadu.
#
And at one hand, obviously, it's like a nightmare.
#
But later, when I thought about it in retrospect, I also realized that around those scenes of
#
devastation, there was great natural beauty.
#
I've vacationed in Sri Lanka and so on and so forth.
#
Tamil Nadu has equal natural beauty, if not more, you know, it's just absolutely gorgeous.
#
And the fact that we don't even think about it in terms of tourism and all that is a shame.
#
And the Karnataka coast, I mean, if you you know, the drive, I mean, the drive from Bombay
#
The drive from Goa to Mangalore is spectacular.
#
It is just spectacular.
#
And you know, and it's just and this, I mean, you just go in any direction and there's so
#
And you know, I mean, the way country number, whatever 20 something in the world tourism
#
rankings, you know, country number one is France with 85 million tourists a year.
#
All these numbers are pre-pandemic.
#
Now, 85 million tourists is a lot for a country of what, 60 million people, right?
#
Less than 60 million people, population of less than 60 million.
#
We have 1.4 billion people.
#
We can get tourists from all over the world.
#
But we also need to get rid of some of our hang ups.
#
You know, we have these hang ups that we all want people who tourists who will come and
#
But that's a small number.
#
We need people who will come and stay in four star hotels and three star hotels by the million.
#
We want budget tourists.
#
We want African tourists.
#
We want Asian tourists.
#
We don't only want Europeans and Americans.
#
We want we want people from all over the world.
#
And you know, I mean, you look at, you know, okay, China is in a in a different, different
#
place today because of the pandemic and its handling of the pandemic.
#
But where there were no Chinese tourists, which makes it attractive for anyone else
#
to travel anywhere else in the world, by the way.
#
But you know, Chinese tourists have been a huge growth engine for most of most of Asia,
#
for Japan, for South Korea, for Thailand, for the Philippines, for all of almost all
#
of Asia, but not for India.
#
Huge missed opportunity.
#
So we have about like 20 minutes left.
#
There's so much to talk about your book anyway, even if we spoke for another three hours,
#
I don't think we'd cover it because it's just so rich in ideas and things to talk about.
#
I'll come straight away to what you call your three pillars of, you know, where India needs
#
And you say, quote, putting this together, the government and policy environment is one
#
of the three pillars of leadership and inclusive, international, innovative and independent
#
industry is the second independent and effective institutions make up the third.
#
So, you know, we've spoken a bit about the government and policy environment.
#
I also let's talk about industry where you point out how these four factors, inclusive,
#
international, innovative, independent, all of these are kind of important.
#
So I want you to briefly tell me a little bit about this and how you're thinking on
#
this evolve being an industry leader yourself.
#
And also the broader question I have to ask is that you've set out this vision where industry
#
can move in all these fantastic, beautiful directions.
#
Now my sense is that people are driven by self-interest, by incentives, right?
#
People respond to incentives and they will behave accordingly, therefore.
#
And where are those incentives coming from?
#
They can come from policy frameworks around them.
#
They can come from the culture around them.
#
And if companies don't behave in, say, ABC way already, you know, what would make them
#
It's one thing that there might be enlightened leadership in some companies like yours, where
#
you decide that this is a path you're going to take, you're going to be more inclusive,
#
you're going to, you know, blah, blah, blah.
#
We are going to, you know, instead of running from competition, we're going to go towards
#
it like you decided in 91 and all that.
#
But otherwise, this question kind of struck with me that every industrialist will do what
#
is in her self-interest at a given point in time, that's determined by the incentives
#
from the environment around you.
#
And I don't see those incentives around either in policy or in culture that will make them
#
move in these directions.
#
So let's take the four I's.
#
So the inclusive thing that I talk about, you know, if industry needing to be more inclusive,
#
I think will come largely through voluntary effort.
#
It's difficult to change the policy framework to make Indian industry, you know, consciously
#
One exception, which I'll come to in a sec, but by and large, it'll come from the CS,
#
what I'm advocating is that from the CSR budgets of firms, focus the CSR budgets of firms on
#
education, as it is, education is the largest single item.
#
Within education, focus it on Karthik Muralidharan's idea, which is also in the new education policy
#
of second standard outcomes.
#
And if we can do that one thing as one big thing for all the schools that we in industry
#
work with in any case, then we can transform the lives of millions of children each year.
#
We can improve school outcomes for millions of children each year and therefore include
#
millions more people each year in our growth process.
#
That's one part of inclusion.
#
The second part of inclusion, by the way, where we can, you know, the economist Gary Becker
#
did a lot of work on discrimination theory many years ago.
#
And his argument was that actually the first firms that move away from discrimination win.
#
And if they can win very visibly and clearly economically, then in an incredibly short
#
period of time, discrimination falls away.
#
So the more we can get firms in India to see 1.4 billion people as the population from
#
which to recruit, the more we will move in that direction.
#
So we have to make inclusion and non-discriminatory employment, employing more women, employing
#
more minorities, employing people from other geographies.
#
We have to make that a really powerful business case.
#
And when we make that a really powerful business case, I think it will flip quite fast.
#
So now, how do we get that to happen?
#
I think it's examples, visibility, it'll take some time, but I think we have to move
#
I mean, I really think there's a lot to be said for getting some of these messages across
#
in a very coherent, powerful way.
#
In fact, there's a study I like citing which shows that the most important factor in decision
#
making in any group within a firm and government or whatever, the most important factor is
#
not education or intelligence or whatever, it is diversity, that you have a diverse group
#
of people, you have the best decisions being made, added to what you pointed out by a study
#
that you stop discriminating, you immediately have a competitive advantage.
#
In one of the run up to one of the British elections, I was in the UK at that time, and
#
I remember seeing a billboard that said, it was a very unfair billboard.
#
It was from the Conservative Party, Margaret Thatcher's party saying, it said, labor says
#
he's black, we say he's British, completely unfair, but incredibly powerful communication
#
I mean, if you just think of the, and it was a powerful argument against discrimination
#
in an interesting somewhat, what would you call it, very deceitful way, but it was a
#
I come to the other two, next two eyes.
#
Next two eyes are international and innovative.
#
For international, I think there's a clear policy role, which is open the economy up
#
before industry says it's ready to be opened up.
#
So, allow imports as the best way of fostering exports, because as an economist would say,
#
a tax on imports is a tax on exports.
#
So if you really want to see exports boom, bring down import tariffs.
#
And we have an opportunity just now, the rupee is under some pressure.
#
The RBI should not try to protect the rupee.
#
It can protect a disorderly devaluation, but beyond that, it should let the rupee devalue.
#
And use that devaluation as a way of then reducing tariffs on imported goods.
#
That's for the finance ministry to do, or the commerce ministry to do.
#
So because that's a way of forcing Indian industry to be much more international.
#
And from the industry side, we can help in that from CI, we can make it easier for firms
#
to go overseas to invest in different countries, enter new markets and so on.
#
On the innovation side, I've really wrestled with this question of why an industry invests
#
as little as it does in in-house R&D.
#
I don't think that's a policy point.
#
I think that's very much of an industry point.
#
I think it's for industry to fix on its own.
#
We need to do some very visible benchmarking, where for different industries, and that's
#
what we're trying to do now actually in CI, where for different industries, how much is
#
invested in R&D versus the top firms in the industry worldwide?
#
How many people are employed in R&D?
#
What kind of qualifications do they have?
#
What are the outcomes that they have in terms of new products and services that are introduced
#
And I think through some of that benchmarking, if we start realizing that we actually do
#
invest very little in R&D, and that awareness grows, then hopefully we'll start to see that
#
That's a problem for industry to largely fix on its own, and industry associations like
#
CI can play a key role.
#
There's a second element to the innovation piece, which is a policy role, which is where
#
public research and public R&D is done.
#
It should be done within the higher education system instead of in autonomous R&D labs.
#
That will improve the quality of the people coming out of the higher education system,
#
which will help in-house R&D hugely.
#
Last point on independence, I believe very much that our lack of speaking out, and the
#
quote that you read earlier on, that the lack of speaking out is a reflection of decades
#
of License Raj, and that mindset where we would keep going to the government for things,
#
for licenses, for favors here, for incentives there, that mindset lives on.
#
Even though the policy framework has largely changed since 1991, and we have to shed that
#
mindset of going to the government and constantly asking for.
#
I think that, unfortunately, will take the longest time to change, and I don't think
#
we should wait for the government to be welcoming of criticism and input.
#
It's for industry to make the change.
#
If a hundred industrialists are independent and critical in speaking out, we're there.
#
Why is it that people like Rahul Bajaj have been, I think, justifiably revered by all
#
It's because there's so much of an exception, or Kiran Mazumdar.
#
There was a time where people like Ashok Desai and Montek Singhaliwalia and all these people
#
Before the tide turned, and today we think of them as heroes, so there's something to
#
My penultimate question, at one point you write, quote, seeing our government up close
#
left me both impressed and depressed.
#
I was impressed by the intelligence, commitment, and hard work of many of our past and present
#
ministers and senior bureaucrats.
#
I was depressed by how unprepared, unmindful of international best practice, diverted by
#
optics over content, and petty some of these great minds were.
#
And my question is there that how receptive are people to these ideas at three different
#
One is the level of government when you speak to policymakers and people who can actually
#
make decisions, two at the level of your peers within the industry, which I think you've
#
You've said too few, and three at the level of the larger public because these ideas need
#
to be part of the discourse and sadly they are not.
#
So across these three, what are your thoughts?
#
So in the government, there are people who are receptive.
#
And I give the story of a minister who, after I'd written an article criticizing us dropping
#
out of the RCEP negotiations, and I met him in a completely unrelated context two days
#
And he said, he started by saying, I really liked your article.
#
And he says, I would have phoned you to tell you, but I'm a loyal member of the government.
#
But I mean, so, and I think there is this voice, there are these reformers within government
#
who today, among some ministers, some bureaucrats who want to do the right things.
#
And I think their hand is strengthened if we speak out, whether in industry or whether
#
in civil society, but certainly in industry.
#
And so I think we strengthen reformers' hands when we're more independent.
#
Shifting the Overton window, as it were.
#
I think it helps a great deal to do that.
#
And by the way, I know several people in senior bureaucrats who have been very receptive.
#
Some who've read my book and have sent me nice messages.
#
Some ministers and bureaucrats who have sent the book to have not heard from at all.
#
So I don't know whether they've read it and didn't like it at all or whether they haven't
#
My guess is it's the second, but I don't know.
#
I'll find out at some point.
#
On your third category, on the public at large, you're right.
#
What I would love is that these kinds of questions on the role of the state, on the role of trade
#
and an open trade policy, on the role of labor laws and reform in building a more inclusive
#
society and encouraging more women to work, on why we invest what we do in R&D and how
#
we could do much more and better with it, on institutional independence and on the role
#
of dissent and criticism.
#
I really wish these kinds of questions were really seriously discussed and debated to
#
a much greater extent, which is why I really appreciate this conversation.
#
Because it's so important for us and I want people to read my book, not to agree with
#
I don't mind if they don't agree with it.
#
I don't mind if they disagree with everything that I say.
#
But if they engage with these issues, I would be delighted.
#
Yeah, we need to talk more.
#
My final question is, and this is a common end for my episodes, where I ask my guests
#
to recommend books or films or music that they absolutely love, that they take with
#
them to a desert island.
#
You mentioned in your book that one of your top five favorite books is Exit, Voice and
#
Loyalty by Hirshman, which I love as well.
#
You mentioned during this conversation that Leave It to Smith is one of your top five
#
Now, I don't know how many books there are in your top five, could be fifteen, could
#
There are only five in my top five, but there are many close.
#
So give me the other three and then tell us about the close ones.
#
And if you also want to talk about music and films, why not, let's discover new things.
#
So India After Gandhi by Ramchandra Guha is, I think, one of the great books of all time,
#
one of the great histories, and it's wonderfully written.
#
Many of Ram's books, I mean, I think all of his books are worth reading and really great.
#
But India After Gandhi is, to me, one of the great books for me of all time.
#
The Wealth and Poverty of Nations by David Landis, I think, is a great economic history
#
of the world and how the world got to be where it is, highly opinionated, quite amusing in
#
different times, a good read.
#
So it's a good book to read.
#
It's a nice story, very opinionated, not balanced, but a good read.
#
And then a little book by Alan Bennett called The Uncommon Reader, which is very funny.
#
It's a great book for anyone who loves to read.
#
And it's about the Queen of England becoming a great reader.
#
That's why The Uncommon Reader.
#
And how she gets hooked on to reading and what happens.
#
And she starts reading first, and she has the sense of duty.
#
So if she opens a book, she has to finish it, even books she doesn't enjoy.
#
And then she starts reading more and more and she becomes a great reader.
#
So I mean, it's a very music book.
#
Two fiction, three nonfiction.
#
The ones that came very, there are also others that came very close.
#
John Stuart Mills on Liberty.
#
I think difficult book to read.
#
It's 1850s prose at the end of the day, but the content is terrific.
#
And it's a statement of liberalism like no other and the essence of what it is to really
#
be free and why policy needs to keep in mind always how policies might infringe on one's
#
There are many, many other books that I could come to, but anyway, those are the ones.
#
There are others that Ram has written and his collections of essays like Patriots and
#
Partisans and Democrats and dissenters are also wonderful.
#
I think collections and the whole of PG Woodhouse, all 97, all 97 titles, but especially the
#
Blanding series, the Jeeves series, the Smith series, the Uncle Fred series.
#
My childhood has come flooding back of lying in my bed in the summer afternoon reading
#
these paperbacks one by one.
#
And what I've recently discovered is Everyman.
#
So Everyman is these nice hardback editions of many classic books and they've republished
#
all the PG Woodhouse books on really good quality paper in caslon type, really nicely
#
And I'm sort of enjoying reading these nice physically produced book, PG Woodhouses again.
#
I have an Everyman edition of George Orwell's collected essays, which I really love.
#
I keep dipping into it because he's such a good writer.
#
The other ones have been the top 10, by the way.
#
So 1984 would be in there.
#
Homage to Catalonia probably would not be, even though I think it is a great book.
#
And maybe another Albert Hirschman, The Passions and the Interests would be in there.
#
What about music, films, anything?
#
So music, film's very easy, but music, I mainly listen to Western classical.
#
And I started, I used to listen to a very wide range of Western classical.
#
And as I've got older, I've got narrower.
#
And I largely now listen to sort of Mozart, Beethoven, Brahms, Schubert, Schumann.
#
Those five, Chopin maybe, six composers.
#
Heavy emphasis on piano music, some orchestral music, some favorite works.
#
So the Brahms Second Piano Concerto, the Beethoven Fourth and Fifth Piano Concertos, the Beethoven
#
Well, the fourth, sixth, ninth symphonies, I mean, there are the Schubert impromptus,
#
The Mozart, almost all the piano concertos, I mean, there's a stack that one could go
#
with the Beethoven Triple Concerto.
#
These are all wonderful works to listen to.
#
And you can, I keep hearing them again and again and again.
#
One film, my favorite movie of all time is, I like light films.
#
So I like comedies more than anything else.
#
My favorite film is a movie called The Philadelphia Story.
#
And my favorite actor and actress have tended to be Cary Grant and Catherine Hepburn, and
#
they're both in it together.
#
And then there are many, there are many others apart from Philadelphia Story, there's Casablanca,
#
which is not a comedy, but it's quite funny as well, with Humphrey Bogart and Lauren Bacall.
#
And there's a bunch of others.
#
Most Cary Grant movies, most of the Catherine Hepburn, Spencer Tracy films.
#
Great, Nashaad, thank you so much for, you know, coming on this show, writing such a
#
thought provoking book, and sort of filling the air around me with positivity.
#
I think at least today I'll be a little less of a pessimist just because I had this conversation
#
Wonderful, wonderful to have the conversation with you.
#
If you enjoyed listening to this episode, check out the show notes center Rabbit Holes
#
at Will, visit your nearest bookstore online or offline, and pick up The Struggle and the
#
Promise Restoring India's Potential by Nashaad Forbes.
#
You can follow Nashaad on Twitter at NashaadF.
#
You can follow me at Amit Verma, A-M-I-T-V-A-R-M-A.
#
You can browse past episodes of The Seen and the Unseen at www.seenunseen.in.
#
Thank you for listening.
#
Did you enjoy this episode of The Seen and the Unseen?
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