Author name: Sachin Nandha

Written by Dr. Sachin Nandha, ICfS Education. Innovation. Capital accumulation. One-tenth of India’s population pulled itself out of poverty, that’s almost 140 million people, in five years up to March 2021, according to Reuters. Suman Bery, of the Indian think-tank Niti Aayog, ‘Rural areas saw the strongest fall in poverty, according to a study, which used the United Nations’ Multidimensional Poverty Index (MPI), based on 12 indicators such as malnutrition, education and sanitation.’ Let’s just get that number into perspective. 140 million is two United Kingdoms being pulled out of poverty in five years. What is happening in India now, and what China has managed to do, is nothing short of miraculous. With economic hope, culture changes too. Women become empowered to take control of their lives. They consequently have fewer children. The children they do have receive a better diet, and suddenly start growing taller and healthier. Better sanitation, running water, regular electricity and even cheap internet supply all culminates in an atmosphere of confidence about the future. This optimism creates a psychology which drives risk. Risk coupled with an ever-increasing access to credit drives enterprise. Only through business can wealth creation flourish. This, above all else has supported India’s rise. Prime minister Modi’s policy of direct support to rural families is one such case where the State has enabled the poor. Using digital bank accounts has meant that people are suddenly able to build toilets and bring electricity into their houses through government credit. Middlemen are cut out, and so is corruption and exploitation. Of course, this does not mean that India’s poor can suddenly buy electric cars, or holiday homes, or expensive designer clothes. However, consider a family which was earning three dollars a day five years ago, and now it earns ten dollars per day, they can eat better food, send children to school, and even afford a mobile phone. A little luxury goes a long way. Brazil’s president Lula once quipped “poor people love luxury. Only intellectuals hate luxury.” The path India is now taking is one that many before her have traversed. It started with our own country — the United Kingdom, followed by the rest of Europe, then the US, and Japan, East Asian countries, China and now India. There is a well-trodden path out of poverty, backwardness, and despotism. We need to let India walk that path, support it, and where we cannot support her, get out of her way! Village development is rapid across India. But it has a long way to go. As India develops, village development is pulling millions of people out of poverty. The path to prosperity Academics and researchers often say there are many ways out of poverty. Maybe, but that is speculation through sophisticated theory and models, all of which belongs to the future. As far as history is concerned, the one sure way to prosperity centres around three forces. The first is accumulation of capital; second is an innovative society driven by commerce; and third a society underpinned by a robust education model. At this point readers can jump off if they don’t have an appetite for details. However one should remember these three things — the surest recipe for poverty alleviation: Capital accumulation, innovation and education. Life, before capitalism, for most humans throughout history has been poor, short and brutal. Less than a hundred years ago the literacy amongst Indians was less than 10% amongst men, and as low as 5% for women. Around half of the population died before reaching adulthood. In India life expectancy has risen to 70 and is still rising. Even when we think about the Roman empire at its height, or the Caliphs of Persia, even if they had wanted to bring affluence to their subjects, they simply lacked the know-how to do so.When we visit palaces, temples, and estates of old, we are seeing how the few, most powerful lived. We are not seeing how the common person lived. Let us suppose they, the rich and powerful, had the desire to bring the masses out of abject poverty, it was not in their gift to be able to do so. To bring large populations out of poverty ‘all you need’, according to Erik Solheim, a well-known global leader on environment and development, ‘is a strong development-orientated state, a vibrant market with innovative business, and a resolute focus on education’. Private business, personal enterprise, and the free market, all underpinned by a rule of law, where contracts can be enforced, and people brought to justice quickly and fairly, provides the edifice for the magic of capitalism to happen. The state is an enabler, not a doer. IIT Roorkee, India’s answer to MIT in the US. A typical government school in rural India The first thing it can enable is education. India has its Institutes of Technology (IIT), and Management (IIM), as well as its All-India Institutes of Medical Sciences (AIIMS), elite colleges that are affordable. In the last fifteen years the number of IITs and IIMs has blossomed. Fifteen new mega institutes have been rolled out throughout the country over the last ten years, and many more are under construction. India is pursuing what many at the United Nations know, but fail to champion, which is an education system funded by the state, supported by the people through taxation, and not foreign aid. Education that is paid for privately, or through taxation, and is free or affordable at the point of use, is the surest way to create sustainable educational institutions. India has a burgeoning private education sector, which is often patchy in quality, and has led to exacerbating the gap between the “haves” and “have nots”. Around 10% of Indians control around 70% of the country’s wealth. A strong state, while allowing market forces in education, also needs to spend money, lots of it, on delivering an outstanding state-led, tax-funded schooling system. India today spends a measly 2.9% of its GDP on education. When compared to the