25 August 1947, 5:45 PM
Back in Delhi, foreign correspondents crowded the steps of the Secretariat building, desperate for official statements or ministerial interviews that might provide clearer understanding of what was unfolding. Security had been tightened following recent communal incidents, but the press contingent was permitted access to a designated area where they could intercept officials entering and leaving meetings.
One American journalist from the Associated Press, recognizing a senior clerk from the Cabinet Secretariat emerging from a marathon overnight session, called out with the directness characteristic of American press culture:
"Does the Prime Minister think he's moving too fast? Aren't there risks in creating so many new institutions simultaneously when the country is still dealing with partition chaos?"
The clerk—a middle-aged Brahmin from Kerala who'd served in the colonial Indian Civil Service and chosen to remain in independent India's successor civil service—stopped and smiled with the weary patience of someone who'd been fielding similar questions for days.
"Sir, I would suggest you are asking the wrong question entirely. The relevant question is not whether we move too fast, but whether we move fast enough. For two hundred years, this land moved only when colonial masters pulled the reins, only when British commercial interests required administrative action, only when imperial necessity demanded institutional development. We moved at Britain's pace, according to Britain's priorities, serving Britain's needs."
He gestured toward the Secretariat building behind him, where lights still burned in ministerial offices despite the morning hour.
"Now we move at our own pace, according to our own priorities, serving our own people's needs. Perhaps this seems precipitous to observers accustomed to the leisurely pace of Western institutional development, where governments had the luxury of centuries to evolve administrative capacity. We lack that luxury. We build now, or we risk never building at all. We create institutional capacity now, while political will exists and public support is strong, or we risk falling into the pattern that has trapped so many postcolonial nations—eternal poverty justified by claims that development requires time we can never quite find to invest."
The journalist scribbled notes rapidly, recognizing a quotable response when he heard one.
"But can these institutions possibly function given India's lack of trained personnel, limited fiscal resources, and ongoing partition crisis?"
The clerk's expression shifted away from
from weary patience to something more purposeful, the look of someone who had been waiting for exactly this question to explain something important that the international press had missed in their focus on institutional acronyms and grand announcements.
"Sir, you ask whether these institutions can function given our constraints. That question reveals a fundamental misunderstanding of how this government is approaching the challenge. Our Prime Minister, our Education Minister Dr. Saraswati Sinha, our Home Minister Sardar Patel, our Law Minister Dr. Ambedkar, our Health Minister Rajkumari Amrit Kaur, even our Agriculture Minister—and I would add that the entire Congress Working Committee, after considerable pressure from the Prime Minister and Home Minister, has been mobilized—all of them are working day and night not merely to announce institutions but to solve the practical problem of how to make them function within our severe fiscal and administrative constraints."
He paused, ensuring the journalist was capturing this accurately in his notes.
"I think you also heard that in the Constituent Assembly session, Health Minister Rajkumari Amrit Kaur proposed establishing a public sector undertaking in the pharmaceutical sector to ensure medicine security and price control. But you will notice something curious if you examine today's newspapers carefully. The PSU proposal itself—the detailed structure, capitalization plans, acquisition strategies for existing British pharmaceutical firms—none of that appears in the press coverage. The newspapers received only selected portions of the Health Ministry's proposals."
The American journalist looked up from his notepad, intrigued by the suggestion of deliberate information management.
"You're saying the government is withholding information about the pharmaceutical PSU? Why announce some reforms publicly while keeping others confidential?"
The clerk smiled slightly, appreciating the reporter's quick grasp of the implication.
"Not withholding permanently, but managing the sequence of public disclosure strategically. What you will find published in today's newspapers are the details about the National Health Authority's operational structure—the blood bank networks being established, the special department under NHA dedicated to managing medical supplies and distribution logistics, the Jan Aushadhi pharmacy chain that will provide affordable generic medicines directly to citizens and conduct basic medical testing at accessible prices. These are the consumer-facing elements, the aspects of healthcare reform that ordinary Indians will experience directly and immediately."
He gestured toward the newspapers being sold by vendors outside the Secretariat gates.
"The pharmaceutical PSU details remain internal to Cabinet discussions because those involve complex Strategy, financial arrangements that could be disrupted if prematurely disclosed, and strategic considerations about market timing that lose their effectiveness if competitors understand our intentions too early. But the Jan Aushadhi pharmacy network, the blood banking infrastructure, the medical supply chain management—these can be announced publicly because they build popular support and create accountability pressures that help ensure implementation."
The journalist was writing rapidly now, recognizing a more sophisticated story than the simple narrative of ambitious reform.
"So the government is deliberately separating what it announces publicly from what it keeps confidential based on strategic considerations?"
"Precisely. And more than that—every minister, every senior secretary, every member of the Prime Minister's inner circle is currently engaged in intensive exercises to determine how to reduce budget expenditures while maintaining institutional functionality. That is the actual work happening behind these announcements. It is relatively simple to declare that India needs a National Health Authority or a pharmaceutical regulatory body. The difficult question is how to fund and staff such institutions when the treasury is nearly empty, when partition has created enormous immediate expenditures for refugee relief and military deployment, when our tax base is minimal because most Indians are too poor to pay substantial taxes."
He paused, choosing his words carefully.
"The answer they are developing—and I speak from direct observation of Cabinet documents I have processed—involves several innovative approaches that you will not find in standard public administration textbooks written about Western governmental development. First, they are leveraging institutional cross-subsidization, where profitable elements of the system fund less profitable but socially necessary elements. The Life Insurance Corporation, for example, will generate investment returns that partially fund the National Health Authority. The Sin Tax framework being developed for tobacco and alcohol will create dedicated revenue streams for healthcare and education rather than flowing into general treasury accounts where they might be diverted to other purposes."
The American journalist interrupted.
"Sin taxes? India is implementing vice taxation?"
"Indeed, though not yet publicly announced in detail. The framework is being designed now, with implementation planned for the coming months once healthcare infrastructure is visibly being built so the tax increases can be credibly linked to welfare provision rather than appearing as pure revenue extraction. The revenues will be earmarked specifically for the National Health Authority and the Central Board of Education, creating transparent linkage between the burden imposed and the benefits provided."
He continued, warming to the subject.
"Second, they are designing institutions with scalable implementation, starting with core functions in major cities and expanding gradually as resources permit rather than attempting comprehensive nationwide coverage immediately. The Jan Aushadhi pharmacy chain, for instance, will launch in provincial capitals first, demonstrating viability and building operational expertise before expanding to smaller cities and eventually to villages. This reduces initial capital requirements while creating visible success that justifies subsequent investment."
The clerk glanced at his watch, aware he needed to return to work but committed to completing his explanation.
"Third, and perhaps most importantly, they are leveraging talent differently than colonial administration did. Rather than paying premium salaries to attract mediocre British administrators, they are recruiting competent Indians who will work for modest compensation because they believe in the mission of building their own nation's institutions. Dr. Saraswati Sinha could command far higher salary in private sector or abroad, yet she serves as Education Minister for government wages because she wants to transform Indian education. That multiplies the government's effective personnel capacity without requiring proportional salary expenditure."
"So when you ask whether these institutions can function given India's constraints, I would answer that the question is not whether constraints exist—they obviously do—but whether this government has the ingenuity to work within those constraints effectively. Based on what I observe in the Cabinet Secretariat every day, based on the intensity with which ministers are attacking these problems, I am cautiously optimistic that they may succeed where conventional wisdom would predict failure."
He straightened his papers, preparing to depart.
"One final observation for your readers, sir. You Americans celebrate your Founding Fathers for the Constitution they wrote in Philadelphia. We are watching our Founding Mothers and Fathers—for yes, Dr. Sinha and Rajkumari Kaur have equal authority to any male minister—create not just constitutional provisions but actual functioning institutions that will determine whether those constitutional guarantees mean anything in practice. Constitutional rights to health, to education, to welfare are meaningless without institutions capable of delivering them. That is what is being built here, behind the headlines and acronyms. That is the real story."
With that, the clerk nodded politely and returned to the Secretariat, leaving the American journalist to process an understanding of Indian governance considerably more complex than the simple narrative of ambitious reforms he had arrived expecting to report.
At the Imperial Bank of India's headquarters in Bombay, senior banking executives gathered in the mahogany-paneled boardroom for an emergency meeting convened to discuss the implications of Delhi's institutional announcements. The room carried the particular atmosphere of old money confronting new political realities, of commercial interests recognizing that the rules governing their operations were being rewritten without their consultation.
Sir Purshotamdas Thakurdas, the prominent industrialist and banker who had served on multiple British-era economic committees and expected to continue wielding influence in independent India, stood at the head of the table addressing his colleagues with unconcealed concern.
"Gentlemen, we face a situation unprecedented in the history of Indian commerce. Within two weeks of independence, the government in Delhi has announced the creation of regulatory authorities with powers that, if exercised as described, will fundamentally alter the operating environment for banking, insurance, securities trading, and multiple other sectors. The Life Insurance Corporation threatens to nationalize our insurance businesses. The Securities and Exchange Board of India will regulate our capital markets. The Pension Fund Authority will direct investment of retirement savings according to government priorities rather than market returns."
He paused, consulting notes that had been compiled overnight by the bank's research department.
"More concerning still are the regulatory bodies for pharmaceuticals and food. The Central Drugs Standard Control Organisation and the Food Safety and Standards Authority will have powers to inspect our clients' facilities, impose quality standards that may be impossible for smaller manufacturers to meet, and potentially shut down operations that fail to comply. This represents government intervention in commercial operations on a scale that exceeds even British wartime emergency powers."
A younger executive, recently returned from banking training at the London School of Economics and still carrying the intellectual frameworks he had absorbed there, raised a point.
"Sir, surely much of this is merely political theater. The government lacks the administrative capacity to actually implement such comprehensive regulation. They announce grand institutions but implementation will be constrained by fiscal realities, personnel shortages, and the practical impossibility of regulating a continental economy with primitive infrastructure and limited technological capacity."
Sir Purshotamdas shook his head slowly, his expression suggesting he wished he could accept that optimistic assessment but his intelligence sources had informed him otherwise.
"I would have agreed with you three days ago. But I have received information from sources within the government that suggests they are approaching implementation with considerably more sophistication than we initially assumed. They are not attempting to regulate everything immediately. They are identifying strategic chokepoints where limited regulatory intervention can achieve disproportionate effect."
He referred to his notes.
"For pharmaceuticals, they do not plan to inspect every medicine seller in every village bazaar. That would indeed be impossible. Instead, they will license and inspect manufacturers, controlling the production source rather than chasing retail distribution. For food safety, they will focus initially on large-scale processors and urban markets where contamination has the greatest impact, gradually extending coverage as capacity develops. For insurance, they plan to acquire existing companies with functioning operations rather than building a national corporation from nothing."
Another executive interjected.
"But surely acquisition of private insurance companies requires compensation at fair market value. The government's treasury cannot afford to purchase every insurance operation in India."
"They do not need to purchase every insurance operation," Sir Purshotamdas replied. "They need only to acquire the largest ones, creating a dominant public sector player that can use its scale advantages to drive market standards and pricing. Smaller private insurers will either be forced to compete with a government-backed corporation offering superior coverage at lower premiums, or they will sell their operations voluntarily to avoid being rendered obsolete. The result is effective nationalization without the fiscal burden of compensating every minor operator."
The room absorbed this analysis with growing unease, recognizing strategic thinking that contradicted their assumptions about governmental incompetence.
"What should our response be?" someone asked. "Do we resist these reforms publicly? Do we quietly adapt and attempt to influence implementation through the political connections we have cultivated? Do we divest from sectors likely to be nationalized and redirect capital to areas where private enterprise will remain viable?"
Sir Purshotamdas considered the question seriously, aware that his answer would influence decisions affecting millions of rupees in capital deployment and thousands of jobs in banking and related sectors.
"We must do all three simultaneously but carefully. Public opposition that appears to defend private profit against public welfare will fail catastrophically in the current political environment. The independence movement has created popular expectations that government should serve ordinary citizens rather than commercial interests. Any resistance perceived as protecting wealthy Indians and British shareholders against the common good will generate backlash that could lead to even more aggressive interventions."
He stood and walked to the window overlooking Bombay's commercial district.
"Instead, our public position must emphasize partnership with government objectives while cautioning against implementation methods that might undermine those very objectives. We support pharmaceutical quality control but warn that overly rigid regulation could reduce availability of affordable medicines. We support pension provision but caution that political direction of retirement savings could reduce returns that pensioners depend upon. We support food safety but note that enforcement must be practical rather than punitive if it is to gain voluntary compliance from small producers."
"Privately, we use our connections within Congress and with individual ministers to influence regulatory design during the drafting stage rather than opposing final legislation. Dr. Ambedkar is writing much of this regulatory framework. He is ideologically committed to welfare provision but also understands legal practicalities and economic constraints. We can work with him to ensure regulations are workable rather than utopian. Finance Minister Chetty shares our concerns about fiscal sustainability. We can provide him with data demonstrating which reforms are affordable and which exceed realistic budget capacity."
"And strategically, yes, we begin gradually repositioning our capital toward sectors where private enterprise will remain dominant even under the new regulatory regime. Infrastructure development, manufacturing, export-oriented industries—these will require private capital that government cannot provide. We become partners in national development rather than obstacles to reform."
The younger LSE-trained executive looked thoughtful.
"So we are accepting that the fundamental relationship between government and commerce in India has changed permanently? That the colonial-era model where business operated with minimal regulation and government primarily facilitated commercial extraction is finished?"
"It finished on August 15th," Sir Purshotamdas replied bluntly. "We are merely recognizing that reality and adapting accordingly. The British governed for commerce.
Independent India will govern for citizens, with commerce serving national development rather than the reverse. Those who adapt to this new reality will prosper. Those who resist will be swept aside."
He returned to his seat at the head of the table.
"One final point, gentlemen. Everything I have described about government strategy comes from sources I trust but cannot verify completely. It is possible that Delhi's ambitions exceed their capabilities, that these institutions will fail in implementation, that fiscal constraints will force dramatic scaling back of welfare promises. If that occurs, the political backlash against this government will create opportunities for those who have positioned themselves as responsible alternatives."
"But," he added with emphasis, "we should not count on their failure. Prime Minister Sen and his ministers are demonstrating administrative competence and strategic thinking that suggest they may actually achieve a significant portion of what they have announced. We should plan as if they will succeed rather than hoping they will fail. That is the prudent approach for institutions that intend to survive and prosper in independent India.
And that's how India Under It's First Prime Minister gradually transforming in visible pace,That outpacing everyone.