The path to progress is charted. Will we take it?

Tributes have been pouring in for Lee Kuan Yew, the founding father of Singapore, who died a few days back. After World War II Singapore was dirt poor with race riots, unemployment, lack of infrastructure and hostile neighbors. By the time Lee stepped down from the post of Prime Minister in 1990 per capita GDP had risen from less than $320 to over $60,000, making it one of the richest countries in the world. His policies was emulated by Deng Hsiao Ping in China with spectacular results.  So how did Lee perform his magic? Apparently savings in Singapore amount to 48% of GDP, which results in high investment, the savings rate in China is even higher. In contrast, India has a savings rate of 30%. Per capita income in Singapore grew from $2,529 in 1960 to $36,897 in 2013, that is 14.5 times. In the same period China's grew from $121 to $3,583, that is a growth of 29.5 times while India grew from $228 to $1,165, a growth of just 5 times. Indians save less because we have to spend more on basic goods because the inflation rate in India is more than twice that in China or Singapore. India has one of the highest tax rates in the world which reduces our disposable income and our ability to save. In Singapore the rule of law is paramount, corruption is almost nil and tax rates are stable which regularly takes it to the top of the list of countries in the ease to do business index. People in India do not invest in stocks because they do not trust anyone. They prefer to keep their money in term deposits in banks or invest in real estate and gold. Gold is kept in bank lockers and millions of apartments are lying vacant because people are afraid to give them out on rent. Vast amounts of money are therefore tied up in unproductive assets. Not only is corruption very high in India but tax rates and tax calculations change every year. The annual budget has become a spectator sport. A good investment this year becomes an albatross the next. It is as if the Finance Minister wants to trap you with honeyed words to invest your hard cash in one financial instrument so that he can tax the hell out of you the next year. It is no wonder that Lee was disappointed with India's progress. In 1960 India was 3 times richer than China, today we are 3 times poorer. In every parameter, from poverty rates to life expectancy at birth to child mortality China is far ahead. To grow the economy we have to make people richer so that the middle class expands which will increase consumption, increase investments and lead to greater jobs. Trouble is that with increasing wealth will come increasing education so that people will demand more political freedom and civil liberties. Our politicians will not like that at all. No wonder Lee held them in contempt.