US-India Global Review

70 US-INDIA GLOBAL REVIEW JANUARY-MARCH 2018 worth of projects. Consequently, road construction has risen from 8.5 kilometers a day during the last two years of the previous gov- ernment to 11.9 kilometers in 2014-15 and 16.5 kilometers in 2015-16. The construction of national highway projects awarded has risen from 3,500 kilometers in 2013-14 to 8,000 kilometers in 2014-15 and 10,000 kilometers in 2015-16. The average rate of expansion of rail tracks has risen to 7 kilometers per day … the construction of the first high- speed rail between Ahmedabad and Mumbai, the modernization of 400 major railway stations, the construction of dedicated eastern and western freight corridors of 1,305 km and 1,499 kilometers, respectively, and laying down of 1,875 kilometers of new railway lines.48 Public-private partnership proj- ects are picking up once more but have the potential to once again get bogged down, and any res- cues will raise outcries that crony capitalism has returned. The cur- rent practice of auctioning such projects at a fixed tariff for 25 years does not work, since condi- tions keep changing, and any change in contract draws accusa- tions of crony capitalism. India needs an independent institution that can renegotiate infrastructure projects and be seen to be hon- est.49 The land problem is being over- come by replacing forcible land acquisition by voluntary land pool- ing, in which farmers give up land but get back a part of it after development, which has common- ly increased the land price tenfold. The new capital of Andhra Pradesh has acquired over 30,000 acres through land pooling.50 Coal production rose by 32 mil- lion tons in 2014-15 against an increase of 31 million tons in the previous four years together. Coal shortages have ended, and most parts of India have surplus elec- tricity for the first time in decades. However, state electricity boards have not been reformed as a con- dition of their rescue, and they have the potential to once again go deep into the red because of politically ordained subsidies. In sum, infrastructure problems are slowly lessening, but major chal- lenges remain.51 The skill shortage is worsening. India is supposedly going to reap a bonanza from its demographic dividend. UN estimates suggest that changing demographics will give India an additional 280 million people in the working-age group (15-64 years) between 2010 and 2050, even as China’s workforce declines in absolute numbers. But this dividend will prove worthless unless the new workers are skilled and can find useful jobs. India’s primary schools are in pathetic shape, and so dropouts are excessive, and those complet- ing school are barely educated. College expansion has been mas- sive, especially of private colleges in recent decades, but the quality is spotty and the education, often useless. Consequently, India is producing millions of unemploy- able school and college graduates who don’t want to do manual work but don’t have the skills for white- collar work either. India is now wit- nessing a demand from relatively well-off castes — such as the Jats in Haryana and Uttar Pradesh, the Gujars in Rajasthan, and the Patels in Gujarat — for reclassifi- cation as “backward castes,” so that they qualify for a quota in government jobs and top educa- tional institutions. When the town of Amroha invited applications for 114 jobs as “sweepers,” it received 19,000 applications, including some from people with MBAs and B.Tech. degrees.52 Recognizing the problem, the National Skills Development Corporation, a government agency, is financing private com- panies that do vocational training, but that has not worked. In the absence of a credible certification system, employers are unwilling to pay a wage premium for workers with vocational training certifi- cates. Quality has to replace quantity, and that has always been a weakness of all government services and government-financed schemes. Posts in government colleges have long been influ- enced by politicians and some- times given in return for kickbacks. The explosion of private engineer- ing colleges after the software boom means India has almost 1.5 million engineering seats on offer, of which barely two-thirds are filled. Some employers say only 10 percent of engineering gradu- ates are employable as software engineers. Quality is a huge future challenge for which the entire institutional framework of educa- tion needs overhauling.53 Conclusion How can we sum up 25 years of economic reform? Three major trends are visible. First, the vast majority of successes have been private-sector successes, whereas the vast majority of failures have been government failures, mainly in service delivery. Second, wher- ever markets have become com- petitive and globalized, the out- comes have been excellent. But many areas remain unreformed, a few areas have been marked by backsliding, and those along with new forms of regulation are com-

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