India's Infrastructure outshines China? Religion and Infrastructure

When Religion and Politics come together to deliver corruption free infrastructure.

February saw the Maha Kumbh Mela – an event held every 12 years – where an estimated 40 million devotees dip their bodies in the confluence of the Ganges and Yamuna rivers. Everyone was impressed with the ability of the state of Uttar Pradesh (one of India’s most corrupt) to provide roads, homes, electricity, sanitation, and drinking water for the spiritually thirsty. A colleague from UNC Chapel Hill – we met after 30 years - attended the Maha Kumbh Mela and was blown over that such an event could be organised without any undue incidents. “Imagine the entire population of California landing up at Fisherman’s Wharf. And staying there overnight”, he exclaimed. “The only time we were nervous was when the police would resort to a lathi (baton) charge for apparently no reason. But, left to itself, the crowd was disciplined and superbly organised.”


When asked how a maxi-city was built in 3 months (and it will be dismantled) with infrastructure that an average Indian would kill for, a senior bureaucrat suggested that - because the objective is religious - there was a clear message to deliver and to ensure there is no corruption. This in the same state where USD 600 million allocated for the construction of toilets has apparently disappeared – with no toilets having been built. Money down the drain.


The Finance Minister has obviously chosen – as many of his predecessors have – to avoid a skinny dip in the holy river and help cleanse India of its sins of corruption. So, the budget ended up being another timid statement of accounts as opposed to a statement of vision. The tens of thousands who have built their wealth illegally were spared the ignominy of contributing to the exchequer.


With GDP slowing to multi-year lows, the Finance Minister is keen to see a decline in interest rates. We hope he is disappointed and the RBI refuses to buckle under pressure. India’s GDP has not slowed because of high interest rates. India’s GDP has slowed because Indian businesses have lost their ability to bribe at will to win large infrastructure related assets – and then invest in the capex required to monetise those assets. If GDP needs to be kick-started, India needs a transparent mechanism to transfer national and natural resources from the government to the private sector. Everything else is a “quick fix” that will fail.


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