India, Oct. 19 -- Devesh Kapur and Arvind Subramanian's book A Sixth of Humanity: Independent India's Development Odyssey on India's political economy will be released on October 24. Kapur (DK) is currently the Starr Foundation Professor of South Asian Studies at the Johns Hopkins University's School of Advanced International Studies. Subramanian (AS) is a Senior Fellow at the Peterson Institute for International Economics and India's former Chief Economic Adviser. Edited excerpts from an interview to Roshan Kishore on the book: AS: Thanks for saying that we are holding up a mirror. What Devesh and I wanted to do was to cut across these narrow academic silos. Development is much more than either economics or politics, especially for a country like India. India, when it was created, had to do four transformations simultaneously: building a state, creating a sense of nationhood, changing society and building an economy and markets. And these four transformations were done through universal suffrage-based politics, which is also absolutely almost unique at that state, and in a society that had so many cleavages. This almost necessitates something that's broader than either just politics or economics. DK: I think one advantage is both of us are older, and we really don't care about being published in the so-called elite journals anymore. Many of those who work not just on India, but on other developing countries, there is a lot of pressure to go in the topmost journals. Understanding the country is not something they're interested in. They're interested in satisfying methodological requirements such as causal inference. We don't have any pretensions our book is about making such claims. Our thing was we want to understand India, in whichever way we feel it can be better understood. AS: I think this is something that we feel very strongly that the opposition and dichotomy is completely false. Especially people on the left who kind of look back with some degree of nostalgia about the first 30 years. There is a kind of revisionist view of that period that things were not too bad. But what Devesh and I try and show in this book is that everything changed after 1980 first and then 1990 when growth took off. DK: To add to this, this does not in the least way deny the many foundations that were laid in the first three decades. We really try to bring out that laying the foundations of the democracy, that was all done in the first three decades, and an outstanding legacy. We say at the end, that India was better at nation building in the first half and worse at it in the second. In more recent years, it has probably been better at state building. DK: If you understand your past better, hopefully, you don't repeat mistakes. Understanding the past is also important, not just to avoid mistakes, but also to learn from the successes. I think we underestimate today how difficult nation building is, and how fragile it is. And if your politics doesn't understand that, just as your economic policies don't understand the incredible cost of mishandling state interventions for the rest of economy, then all your aspirations for the future will come to ground. AS: I also want to say the past is never past in India. So, it's one of those things where the past has a lot of lessons, not just because it's past, but because it's in the present as well. AS: 100%. Most parties have straddled from, at best, pro-business to completely anti-market and redistribution. Devesh and I say at the end of the book, that one of the defining features, not just of any party, but of Indian society, is what we call the Mai-Bap Sarkar. It is deeply entrenched across parties, across society. The Mai-Bap term actually captures it much better than statism or whatever, because the state is seen as refuge, protector, father, mother, everything, even as it is screwing you, systematically, and not delivering. It is party agnostic because it reflects society and how can politics not at the end reflect society. Also, not only party agnostic, it's also agnostic between centre and states. DK: I think between the BJP and others, on a range of policies, there is pretty much convergence, actually, especially on things that 'we will not try and reform'. Did any political party try the reform of the police? Does any political party want to give police autonomy? Take the 74th Amendment (on urban local bodies). Has any political party genuinely tried to implement it? Investing in lower courts, district courts, they have no interest because, of course, there's a complete agreement that strategically, we want to keep law and order weak, that is to be advantage of the political class. DK: Much of the reforms, they are so well known. There are no original thoughts that we can give. And frankly I find this great power discussion, utterly inane. AS: Firstly, the major reforms that have happened, really serious changes, have come after crises. So, it's almost a bit banal and ahistorical to say we know what we need to do, we haven't done it. The big ones happen only during crisis. The second thing which I see is that everyone will have his own list of what is important. Devesh will say, education, I will say, fiscal policy or growth or whatever. And there's actually no way of adjudicating whether Devesh is right or I am right. Our approach is not a 'to do list', but a Hippocratic Oath of 'do no harm' and that is why we were talking earlier about the early achievements and why we should stop undermining them. DK: On this, India is not an outlier. Worldwide we have seen this even more among younger voters. This shift away from democracy and a yearning for a strong leader is a broad trend. Simply saying how great democracy is and how wonderful it is in principle is not enough. People forget all the dangers of authoritarianism when they have not experienced it for many years. It's a warning to our leaders. In some ways, most states and not just the Centre in India are run in an authoritarian manner. It's a bit unfortunate, because, we had hoped that as the decades go by, democracy actually deepens. But look at the US. It had all this but the US has retreated faster in six months than India has. And I myself have just not been able to grapple what is driving this. One can come up with 'democracy has not delivered', there's a sense of frustration, anger, expectations not being met etc. Is social media driving some of this? Is technological change driving some of these trends? Probably all of the above, but I don't want to pretend that I understand it. AS: Firstly, this is global and that's very important to recognise. And of course, there's a big debate globally about whether it is the changing fortunes of the middle classes and the working class and whether there's an economic explanation for this. In India the identity stuff is happening, no question, right? But this is the funny thing - some people say, look, the difference between Indian authoritarianism and (others) is that it's happening when growth is still 6%, right? But I think what is distinctive about the last 10 years is that Narendra Modi has provided a social safety net which we call the 'new welfarism'. It is now the proverbial opiate of the masses. DK: It relates to the point we make on election financing. In the 1950s, the feudals would get the peasantry to come and vote. Now it's really about the money for the elections. At the MLA level, it might be the sand mining guys, at the state level, it might be the real estate guys, and at the national level, it's the big industrialist, right? You could make a bargain that you (industry) get all the favours, but I (state) want innovation. But if I am asking for campaign contributions, not innovation, not even exports then. AS: I think what our fiscal state chapter tries to show is that what India's precocious democracy means is that almost every constituency clamours for, and gets something or the other from the state. So, it is really an equal opportunity claim creator. India's Tax-GDP ratio is virtually unchanged from 1990 to today. Remember, it is the period of the most rapid growth when you expect taxes to rise. So, the notion that the debt is to particular groups per se, is, I think, a kind of a misreading of Indian democracy. Obviously, the amount you get is going to depend upon how powerful you are. DK: Unlike the Chaebols, India's national champions are in sectors where the linkages with small and medium enterprises are much less, they are also mostly non-tradable and regulatory intensive. There is now strong evidence that the number of sectors in which two largest groups have expanded has hugely grown. That has meant that anyone who wants to be in that sector and grow fears that they'll either be crushed or forced to sell off. So, your driver of growth, which is always new entrants that then grow rapidly because a few of them are really good, they prefer to relocate out or get into the usual real estate etc. I think that silent debt is having, undoubtedly in my mind, a crushing effect on the growth driving small and medium enterprises, especially the most dynamic firms in the leading sectors, because of these apprehensions. And it could be that the apprehensions in some cases are exaggerated, but in the end, why should I take that risk? DK: There are two things the left intellectuals fundamentally fail to understand. One is the left, more than anyone, had the view that the state had a critical role in socio-economic transformation in a deeply unequal and hierarchical society and yet made no efforts to improve the effectiveness of the state itself. If there's one thing Communist governments are good at all over the world, it is primary education and public health. Look at West Bengal. Now, we can say in Kerala it was true, but in Kerala it was social movements that played a big role, not just the parties, right? The second is the left has never understood entrepreneurship. Look at state owned enterprises. None of our economist intellectuals have even once just a simple cost benefit analysis of the rate of return. We show that report after report, the government of India was way more aware of the state's weaknesses than the intellectuals were prepared to be. AS: I would say that there's a broader inability to honestly self-reflect on the failures of the state, and to acknowledge and therefore to remedy. I think it's almost like it's a cognitive psychological failure of the left. DK: I think this is the bigger puzzle. In the early decades, one could argue that the choices of heavy industrialisation etc. were there because the policy making was elite. But that argument is harder and harder to make after the 1970s when you had regional parties, more and more OBC representation in Chief ministers, ministers, MLAs etc. who had a much more agrarian rural background. What strikes me is that the base of transformation that we see in China, which is improving agricultural yields which is more important for long term prosperity than just increasing subsidised inputs like in India. I looked at when the Yadavs (Lalu Prasad and Mulayam Singh) came to power Bihar and Uttar Pradesh, what did they do for the veterinary sciences? You know, their social base is invested in cattle. The puzzle is that democracy did increase representation but why did that representation not translate into economic policies that benefitted the larger base. AS: The question is how did they get away with it? DK: I think in the south (India), caste-based parties came after you had strong social movements and, in the north, caste politics came too early before the social movement. We point out in the book that many key public goods are co-produced with society. I can't do solid waste management if everyone just chucks the garbage in the street. That just can't be mandated by the state. It needs a deeper social consciousness. And in some ways, the primacy of electoral politics almost made social movements stillborn in the north....