India's Reform Journey Revisited - Mohit Satyanand, Angel Investor

What is one reform that was overlooked in 1991?

In 1991, it seemed to me that the reforms were entirely directed at the external sector and towards manufacturing. Agriculture was a very important part of the economy then, and this was completely left out. Agriculture, which supported, at that point in time, I don't know, 75, 80% of the population, was completely untouched. This didn't really affect the large majority of the nation. It should clearly have been, at that point in time.

I'm stressing that because the need for reform was very clear, but there was no political will. It was really a response to an emergency. Yes, there were some preparations and so on, but it seemed as though the impact on the nation as a whole, of reforms, was very limited, and in a sense, what we're seeing since then is that you’ve divided the country into two halves, those who are involved in manufacturing and modern sectors, such as services, but agriculture has remained very, very backward.

I think when we look at it today-- With the benefit of my own education, I realized that it wouldn't have been so simple, because agriculture is, by the constitution, primarily a state subject. This, of course, boiled up three years ago, when the government of India tried to impose agricultural reforms from the top down, and they didn't work. This raises a much larger issue, which is that reforms cannot be entirely an executive process.  They need to be a political process.

They require discussion, they require a building of consensus. This is something which is completely missing from the Indian political economy, which is that reform has not been part of the larger political discourse. Therefore, you could say that any reform is looked at with some skepticism.  Despite 30 years having gone by, there is not a great deal of discussion around reform.

I think there was an opportunity then, perhaps, to [implement] broad base reforms rather than looking just at industry and the external sector, which was basically all that we did. We reformed industry, we reformed the external sector. There were so many things that could have been done. You could have had banking reform, you could have had agriculture reform, et cetera, et cetera. None of it was done.

It was like the basic minimum that needs to be done, in order to satisfy the concerns of the multilateral lending agencies, whom we needed, because we were in a crisis.

What is one reform that India needs today?

It's not agricultural reform, which would almost seem like the automatic response. I think it's actually educational reform. I think that the world is moving to a situation where mass production, cheap labor, et cetera, et cetera, are not as important. The most important factor of production is intellectual. The way to build the future of the nation is through education, and when I say educational reform, it's obviously a very multidimensional, multifactorial, complex process.

Broadly speaking, we need to remove the heavy hand of the state over education, at every level. At the primary level, at the level of board examinations, setting of curricula, at the level of the university. Today, the government is involved at every level.  You need to liberate a million entrepreneurs if you want a quality population functioning over the next 30 or 40 years. It can't be dictated by bureaucrats sitting in the UGC, the Department of Primary Education, and the NCERT.

They're good, well-meaning people, but that's not enough. You need a huge diversity of thought. You need a huge diversity of investors. You need to be catering to a wide range of people. You can't have all of these flowing top-down. To my mind, that's the greatest reform required.