Drucker on India

Read this in one of the obituaries of Peter Drucker. It is surprising how much of it still holds true and also how much of it does not, thanks to two people, Manmohan Singh and the man who gave him a free hand, Narsimha Rao.

From “India and ‘Appropriate’ Technology,” March 1, 1979: No one in India could tell me what the economic policy of the government is. The only governmental actions are expansions of already large government enterprises, unchecked growth of an already obese bureaucracy and more bureaucratic regulations. The cabinet cannot agree on anything and has no policy whatever. Substantial sums are being allocated to “the villages” but without programs let alone goals. But there is a pervasive rhetoric of smallness and of antitechnology…

As a reaction to the delusion of “the bigger the better,” which enthralled earlier Indian governments, especially Nehru, [Prime Minister Morarji] Desai’s emphasis on rural India is overdue. Earlier governments neglected the village, where 90% of India’s 550 million people still live. But “small is beautiful” is just as much a delusion as “the bigger the better.” What is “appropriate” is not what uses the most capital or the most labor; it is not what is “small” or “big,” “pre-industrial” or a “scientific marvel.” What is “appropriate” is quite simply what makes the economy’s resources most productive. What is appropriate in a country of huge population and rapid population growth is what multiples productive jobs. What is “development” in a country, which like India has sizable resources of managerial and entrepreneurial skill and at the same time huge unfulfilled consumer needs, is whatever creates purchasing power.

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