The End of Journey: Economic and Political Reform

The book begins by defining capitalism and democracy in Indian and Chinese context. Author says that for free market to exist in a country; strong institutions like capitalism and democracy are prerequisite. Here author gives example of growth and emergence of 18 th century British Empire and 20th century America. Both nations reached to statues of global powers by achieving economic growth, but this growth was only possible when these nations abolished old institutions like slavery in case of America. This provided Americans opportunity of free trade & growth. He draws comparison between status of two fundamental institutions, capitalism and democracy in India and china. In this chapter author also describes the situations the new emerging giants, India and china, will face and economic and political reforms required by these countries to achieve prominent status on world stage. Indian and Chinese Democracy Here author explains Indian democracy, various reforms required to provide more transparency and accountability to various institutions involved. The last century has witnessed a tremendous reinforcement of the concept of democracy all over world. In a period of about one hundred years, the virtues of democracy have been greatly praised and the world has gone through a process of democratization. In the sixty years since its inception, Indian democracy too has developed indigenous roots and is emerging as a unique example of parliamentary democracy. The important question today is not the survival of Indian democracy, but the nature of India's democratic politics. Indian democracy faces serious challenges that must be resolved if is to continue its upward journey. It covers a wide range of issues theoretical concepts, political institutions, federalism, electoral process, individual and group rights and mass media drawing attention to the significant broadening of Indian democracy. The solution to these problems lies in further democratization of the political process. Author states, improving education is the first step towards to improving Indian democracy. Indian politics has been hijacked by people who know how to play the game of poor.Unducated people are easy to exploit. Author gives example of crisis of 1975, when indira Gandhi shut down the government for almost 19 months. The process that forced her hand was sparked by her failure to remove poverty campaign, which had been her political promise.Oftenly, uneducated people are manipulated by promises of politicians, promises are broken, crisis looms. Author also gives example of NREGA campaign launched by UPA in 2004.This campaign

lacks investment in genuine rural infrastructure like all-weather roads, electric supply, and agricultural technologies. It doesnt do anything to upgrade the skills of people it is designed to help. Author tries to find out reasons responsible for making Indian democracy ineffectual. One problem is evolution of party system in India which can be better explained in following sentence, One party trying to do too much to too many parties capable of doing too little. Author explains this with 2004 Indian government, after election congress party was in coalition with six different parties with no common principles. Author calls for end of coalition politics and rapid evolution towards two party systems in India. This can be achieved by bringing more transparency in electoral process by carrying out various reforms. Let India to openly admit that political campaigns are costly and that politicians need money. Let it be the matter of public record. Major problem Indian democracy faces is imbalance of power between states and federal government. Too much power devolves to states, a problem made much worse by unequal distribution of wealth among states. States in south are booming rapidly, led by cities like Hyderabad, Bangalore, and Chennai. The lack of centralized power is one of the main reasons that federal government is unable to solve these problems. Author gives solution asking political class to carry out idea of servant leadership & adopting fourth D that is discipline along with diversity, demographics and Democracy. Capitalism democratizes wealth and information. It welcomes the rule of law, under which it operates healthily. It is abused and stifled by authoritarianism. Author tries to find out whether china will be able to open its economy by keeping its government closed. In todays China there is no powerful and independent legal system. The legal system is weak and has little enforcement power. Country also lacks open and independent media which will affect the growth of Chinese capitalism and desires of growing Chinese middle class. He also explains the problem of lack of transparency in Chinese government operations. Author believes that chinas single party rule cannot be sustained forever. He proposes bottom up government structure to china which will represent chinas fastest growing middle class in government. Party will also face pressure to allow an independent judiciary and an independent media. He expects china to allow emergence of opposition party which would bring the big picture into clearer focus and allow party officials to be exposed to valid, if challenging, streams of thought.

Indian and Chinese Capitalism Author believes that India harbors a fundamental mistrust of capitalism. A belief in which amassing wealth was anathema to Brahmins, for whom purpose of life was to accumulate wisdom, not riches. Later author explains how this deeply entrenched prejudice of money making affected in making India a state controlled Economy which hindered Indias growth for decades. Even today, Indian bureaucrats still cling to whatever power they can exercise over business community. For many in India, capitalism is the face of westernization which can erode the traditional values and culture of India. The capitalism in its true sense does not have much of social conscience. Author talks about how this has increased divide between the rich and the poor of this country. He proposes idea of enlightened capitalism. He proposes the existing balance between spirit of entrepreneurship and government regulation. Author explains governments role of formulating policies that will channel the energy of entrepreneurs in a way to serve the purpose of both business and society at large. He explains the role of Government as an investor rather than owner which allows its enterprises to adopt capital structure. He also believes in broader role of business to bring equality & redistribution of wealth in society via philanthropy. China, too, has an ancient antipathy to capitalism. In china Capitalism is associated with western hegemony and encroachment of western values. Working against these prejudices, as well as against party doctrine, the capitalism in china has a long march ahead of it. Author explains issues in Chinese capitalism with issue of ownership of land. New property law implemented in china rejects any change to the system of collective ownership of land, giving farmers only usage rights not legal title. Here author emphasizes on failure of china in protecting intellectual property rights. Chinas share of global counterfeit trade ranges between $19 billion to $80 billion. Author carries out inference about how these violations are affecting the growth of Chinese companies on global scale. He describes the various financial reforms required by china which will provide development of these institutions, giving them edge to compete globally. Finally author provides solution in terms of enlightened capitalism and harmonious society where wealth creation and wealth distribution occurs at same time.