Bottom-up Growth Model for India - Editorial

Bottom-Up growth Model for India - Introduction 

India and China two most populous neighbouring countries and emerging economies in eastern Hemisphere took the journey of economic development around the same time.

Looking into the past, 70 years has passed and China made tremendous progress compared to India in every walk of life. India is miles away from the Republic of China in terms of development indicators, which were attended by China in early 1990s.

India desperately needs bottom-up growth model

The growth of incomes in public and private sectors will put India ahead of China and attract more investors. Furthermore, the powerful and brawny Industrial systems and infrastructure will India more area/spot in trade negotiation as well.

Unique win-win situations for India. 

India biggest challenge is to create an Indian ecosystem & Infrastructure for enterprises of all sizes to thrive and generate more employment opportunities for Indian youth and eventually increasing an Indian citizens income source, ultimately increasing their spending power.
  • India’s infamous and complex socio-economic system atmosphere is under more pressure and stress than ever before.
  • There are many areas where India need immediate improvement such as Improvement in International ranking of Human Development (specially in health and education), Indian stands very low even compared to its poorer neighbour.
  • India is the second largest populated courtesy and most water-stressed country, to make this matter worst most of the metro cities water bodies are heavily polluted.
  • More graduates every than jobs available in the market, our employment elasticity is amongst the worst in the world.
  • No time for HEROIC moves; any bold or heroic action without proper understanding of the whole system would push entire nation into great economic depression or may cause more harm to nation. 
  • One such example is “Currency Demonetization in 2016”, the unemployment rate has spiked from 18.5% (2011-2012) to 33% (2017-2018). India now witness the larger number of graduates with no jobs availability. 

Rise in disposable incomes 

  • According to government, its efforts for enhancing the ‘ease of living’ of citizens by upgrading the quality and accessibility, and minimising cost of range of public services to citizens and Govt. claim their efforts saves around ₹ 4,000/month. 
  • According to Govt. this increase in disposable income, enhanced the consumer buying power, which is estimated at ₹ 24k (₹ 24,000) crores annually. 
  • This collates to the theory of Bottom-Up growth model to be implemented across India and more reforms are needed to enhance consumer buying power through Bottom-up growth approach.  
  • Though Indian has claimed many titles and horizontal support on World Bank’s ranking ‘Ease of doing business’ but investment to widespread the production venture has not seen any increase as forecasted, this is because consumer demand has collapsed even for basic good such as packaged milk and biscuits. 
  • Ironically democratically elected government across many countries including India which should focus more on the well-being, improvement and betterment of its citizens, is now engaged into attracting foreign investment under the title ‘Ease of doing businesses’ to do business in their country.  
  • On the other hand, due to this ‘Globalization and Privatization’, the citizens now rise-up and revolt against “Globalization Model’, promoted by establishment (economists, policymakers and framers), who are busy in attracting foreign investment than preparing policy for well-being of citizens. 
  • It is obvious, the respective citizens of India, wants Indian government to create jobs in India first and thus they want the implementation of policies, that increase income at the base of economic pyramid than decorative growth at the apex. 

People Centric Policies: Case Study of Delhi Govt. And Republic of China.  

  • Somewhere around 15 years ago, the Chinese leader once said both countries (India and China) have a same vision and goal of ‘Prosperity of their Citizens’.
  • To reach that mark and summit, each country must face the turbulent stream and walk pass the uneven road feeling stones underfoot. But how do Govt do that?
  • The very first basic approach has to be, ask concerned establishment of policy makers and framers device policies strictly ‘People centric’ and not growth-centric. 
  • The Chinese Government asked the local bodies and local officials to take into account and address the needs and requirements of the citizens very effectively, similar to that of the Singapore government.
  • The Singapore Minister Tharman Shanmugaratnam, once made a statement that Chinese government derives its legitimacy of policies implemented through well-being of their citizens and their satisfaction and through vote in election.
  • Contrary to this model, India’s constitutional structure enables each State to adopt their own model of development, regardless if its citizen-centric or not.
  • There are merits and demerits of the wide variety of models being adopted in each State. The state of Kerala on the other hand shows progressive local, participative governance development model, which is very distinctive to the rest of the country and matching the groundwork of China in Human development indicator from the context of health, education and women’s participation and inclusiveness.
  • India’s very recent newest political party AAP has adopted the People-centric government model. They established ‘School Management Committee’ with an active involvement of parents.
  • As a result of this initiative from AAP, the Teachers training budget rose by five times. The quality of education in government schools not only exceeded and surpassed the national average and but also quality if higher than private schools. This is the good example of how people-centric policies can make positive impact on Indian society.
  • Public Health spending has doubled.
  • ‘Mohalla Clinic’, one more example of the people-centric development model has been setup for less fortunate and poorer colonies and settlements for easy and affordable access to health care.
  • Piped water to remote and unauthorised colonies and human settlement increased from 53% to 93% in about five years, reducing the dependency on expensive private water tanker.
  • Moreover, despite the water subsidies to poor settlements, the revenue collection of Delhis Jal Board (Delhi's water Board) has increased remarkably.
  • Electricity board has increased their reach and now more scalable (accommodate 20% more consumers), yet making Delhi’s electricity cheapest in the entire nation. Despite this situation, Delhi’s electricity distributions companies show steady growth in financial performance.

Conclusion: More people centric model not More free trade model

The Regional Comprehensive Economic Partnership (RCEP), mentioned that currently India is going through pressure from US economists, who deliberately advocate that more free trade is the silver bullet solution to India’s economic problems. There are plenty of evidences that these free trade solutions have not ever benefited from these free trade agreements signed so far.

India needs to couple its “Industrial and Entrepreneurial Growth” with betterment in the environment. Policies and protocols must be devised, considered a complete system view. Instead of ‘Ease of doing business’, the policy must concentrate on ‘Ease of Living’ as a measurable parameter of health of System as whole.

Policies constantly look for areas to compromise for competing interest. To solve this deadlock situation, Mahatma Gandhi teaching comes for rescue. He already mentioned, the then government should think of the Needs of the Poorest Citizens First. Reduce the duties and taxes on imports that benefits the consumer, and that the consumer being the citizens. A citizen requires and has very fundamental requirements, they are good job, source of regular and steady income to buy the imported goods.

Keeping the above scenario in mind, India very urgently needs Employment and income plan of actions to shape its industrial and trade policies.

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