India’s Crisis of Values

India is actually divided sharply into three economies.

The Business Class economy — consisting of the people who form the market for consumer durables, cars, mobile phones and credit cards — comprises only 5 million households, or 2% of the country's one billion population.

The Bike economy — comprising another 15% of the population — consists of people on the periphery of the market, with the purchasing power of its constituents limited to television sets, telephones and housing with basic amenities.

The remaining 83% of Indians belong to Bullock Cart economy, which is outside the market.

The 2% elite cannot sustain themselves forever, surrounded by 98% periphery. It is not a question of inequity. Almost every Western country has 2% or 5% or 10% of wealthy citizens. But there, they constitute the periphery, whereas the heartland is made up of a large middle class.

To have 2% elites is normal. To have them at the core — rather than the periphery of the nation — is not sustainable.

The issue of sustainability has not found a place in the Indian public debate. Globally, too, sustainability is still defined mainly in ecological terms. Until the 1960s, growth was never questioned.

In the last 40 years, the West has understood the limits to growth. It has initiated a project to balance relations between human beings and the environment. It is yet to realize the need to balance relations amongst human beings.

There is no doubt that the fabric of humanity is being torn apart by forces of greed. Terrorist groups — and their state sponsors — personalize this force. But there is another side of the story — grievances.

For economists in planning commissions and corporate headquarters, economics is business. For India's poor masses, economics is life.

Poverty, for the poor, is measured not in terms of statistical indicators, which may provide evidence of improvement.

Poverty is measured in terms of their ability to meet socially defined expenditure. Poor people feel poor not only when they consume less than 2,500 calories a day.

They also do so when they see a minister's daughter hosting a lavish wedding — not because of her own accomplishments, but because of her father's control over the public treasury.

Poverty is then seen as a result of absence of power. Those who are born in power-endowed families tend to be rich.

Those with less power-endowment tend to be poor, however competent they may be.

Investment reforms are introduced so that colas and perfumes can be availed of easily by the endowed segments of the society.

Land reforms are aborted half way, so that those who are really competent may not eventually overtake those who are merely born in the right families.

India's conflicts are still limited to a few parts of the country. There is a lesson to be learnt from neighboring Afghanistan, Pakistan and Nepal.

Monopolists' control of agriculture, the creation of classes of a privileged few in cities — through expansion of the state sector and the capture of political institutions by a few — has generated a demand for violence.

In Afghanistan, warlords of today and Taliban of yesterday woo the dejected youth, as al Qaeda will do again tomorrow. In Pakistan, clerics use latent frustration to create battalions of religious extremists.

In Nepal, the Maoists produce ideological extremists. Different names. Different forms — but the same underlying dynamics. India need not look too far to understand the implications of the neglect of the periphery for the sustainability of the core.

But there are plenty of home-grown factors limiting the development of India's full potential. Corruption per se exists everywhere.

There are two issues: Profits and acceptance. Violation of ethics and justice proves to be profitable, at least in the short run.

A hard-working farmer barely earns 1,000 rupees ($20) per month. A usurer of food items in Mumbai or New Delhi makes at least 100 times as much.

If the farmer does not sell his produce through government monopolies, he is punished. If a usurer is arrested by the police, the higher authority releases him. In theory, values are a matter of philosophy.

In practice, values are a matter of economics. The character of a nation is judged by the values that are profitable in it.

As human beings by nature try to gain, they prefer values which enable them to earn profits. India has run into ethical deficit because it is not profitable in today's India to follow ethics and justice.

A breach of ethics destroys the level playing field. It works against honest people, since their competitors can win by unfair means. Moreover, those who amass wealth by crooked means tend to display it.

As they host bigger and bigger parties — in more and more expensive designer clothes, at larger and larger houses, with smaller and smaller mobile phones in their pockets — the teenager from the slum next door feels restless.

Since he cannot inherit an industry, he sets up an extortion racket. He discovers that he can command even greater fame, inspiring many others to follow. In this culture, every boy wants to be a don and every girl a beauty queen.

Forty years ago, ethics still mattered. As a child, the most popular story I heard was that of a poor schoolboy who stole a neighbor's gold chain. His mother patted him affectionately, as she could now buy him good clothes and food.

The boy went on to steal bigger things. As he graduated from one level of crime to another, he finally attained skill in big time robberies.

In one robbery, he also killed his victim. He was arrested and sentenced to death. When he was asked his last wish, he sought to see his mother.

He then hit his mother's ear and said: "If you had done this to me the day I stole the gold chain, I would not be dying today." We were taught that the sin of the mother was greater than that of her son.

Even today, those who behave without integrity are few in our large nation of more than a billion. Unfortunately, those who tolerate them and applaud them are many more.

That is why India is in a crisis of values. And as for childhood stories, they are replaced by heroic tales of underworld dons.

The supporters of an unethical way of life defend it on the grounds of pragmatism, even though they may believe in India's core values.

The Indian mind is seized with a conflict between the ideal and the practical. What is ideal is not considered practical — and vice versa. India's future depends upon its ability to establish a unity of the ideal and the practical.

Excerpted from Frank-Jürgen Richter and Pamela C.M. Mar’s (editors) “Asia’s New Crisis: Renewal Through Total Ethical Management” Copyright © 2004 John Wiley & Sons (Asia) Pte Ltd. Used by permission of the publisher.