Statue, bullet train: pride or misplaced priorities?

One of the achievements of 2018 is that we Indians can now boast of having the tallest statue in the world built at a cost of about Rs 3,000 crore. However, given the penchant of China for the biggest, the longest and the highest structures in the world, our achievement may well be a short-lived one.

Anyway, the more important question is: are the benefits worth the cost? At one level, one can always argue that national goals (like promoting national pride or Hindu or Dalit pride, for that matter) set by elected governments cannot be questioned by others. These benefits are not measurable in monetary terms. Hence, the standard economic cost-benefit analysis is irrelevant in such cases (like building statues, monuments, sending man to moon, hosting the Olympics etc).

However, some supporters of the massive Sardar Patel statue (to be followed by another Lord Ram statue in Ayodhya) are going beyond this line of argument. They are trying to project it as an infrastructure investment.

Again, if considered as an infrastructure development project, two types of alternative justifications can be thought of. In terms of analogy, it is like a project (such as constructing National Highways or Hoover Dam) under Roosevelt’s New Deal which was designed to pull the US economy out of the Great Depression of the 1930s. The second analogy is with the Mount Rushmore project in a backward area of South Dakota in USA which created a tourist spot which led to local economic development.

The first line of argument is clearly inapplicable in the present state of the Indian economy. By no stretch of imagination, India is in recession, not to speak of a depression. So, the standard Keynesian logic of the need for artificially creating demand (by massive government expenditure) in a severely demand-constrained economy does not apply. Further, the cement and steel (even if one ignores the opportunity cost of otherwise unemployed labour) used in the statue could be utilised in public projects which make far better economic sense (like housing for the poor, rural roads, irrigation or improvement of railways).

Regarding the ‘development of a backward region’ argument, has there been a social cost-benefit analysis of alternative projects costing some Rs 3,000 crore for local development of that area (like starting an industrial project)? Just by building a huge statue with nothing much around is unlikely to transform an otherwise backward area.

Also, one may ask: is it the most backward area in the country to deserve such a massive dose of public expenditure? The unsaid answer is that it is in Gujarat, the prime miniter’s home state. One can also argue that it is nothing new. All rail ministers introduce a disproportionate share of new trains in their home states.

The successive Congress governments have named most of the national projects after some member of the Nehru-Gandhi family to derive electoral advantages. So, why blame only the current PM? But, then, the Congress spokespersons can point out that the projects named after the Nehru-Gandhi family members are airports, universities, sports stadiums, housing for the poor or urban development and not mere statues.

Consequently, the only logical justification for the project and its location has to be in terms of promoting the emotive goal of ‘national pride’ along with the associated electoral benefits for the ruling government. One may, however, question the presumed electoral benefits. Apart from the local adivasis boycotting the ceremony (again that could be due to pressure from the opposing political parties), spending a massive sum of Rs 3,000 crore on a statue could be bad optics. And hence, bad politics at a time when farmers’ suicides and agitations have become big political issues.

One can, of course, think of more instances of misplaced priorities. Another example is the proposed Indian mission of sending human beings to outer space. Many projects of Isro like sending weather and communication satellites to space or developing missiles of increasing capabilities can be justified by current and future economic and geo-strategic benefits. These projects also generate technological spin offs and spillover effects in other areas. But, does that justify the hugely expensive ‘manned spacecraft’ project? The technology is well known by now; hence not much scope of new technological breakthrough here.

As it would not be a novel achievement, the non-technological benefit in terms of additional gain in national prestige would also be small (incidentally, China is reportedly developing a satellite which would work as a ‘new moon’ to reflect sun rays to light Chinese streets at night — a novel idea, indeed, if it is true!) These resources could be much better utilised for, say, solar energy projects on a massive scale which would yield benefits by cutting our oil import bill and reducing pollution (caused by fossil fuel burning) which has reached highly dangerous levels in many parts of the country. Here, the problem could be that Isro has a budgetary allocation. How they would use it is their prerogative. Presumably these can’t be taken away for solar projects.

‘National prestige’

The proposed bullet train connecting Ahmedabad to Mumbai is yet another such project. No economic cost-benefit analysis of the initiative is publicly available. It is highly doubtful whether such a hugely expensive project (even if financed by Japanese loan at near zero interest rate) can be justified by any social cost-benefit calculus even after assigning a high value to time saved of affluent business people, politicians and government officials (using taxpayers’ money to pay) who would be the major users.

So, ultimately, the justification has to rest on gaining ‘national prestige’ as some other countries like Japan and China (incidentally US still does not have it) already have bullet trains. It is a sad commentary on our democracy that even the opposition politicians are not too keen on questioning such misplaced priorities, in the name of promoting ‘national pride’, as no one wants to sound ‘anti-national’.

(The author is former Professor of Economics, IIM, Calcutta)