Socio-Economic Bottom-Up Growth Model - Editorial

Somewhere around 15 years ago, the Chinese leader once said both countries (India and China) have the same vision and goal of ‘Prosperity of their Citizens’.

· 5 min read
Socio-Economic Bottom-Up Growth Model - Editorial
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Bottom-Up growth Model for India - Introduction

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

Looking into the past, 70 years have 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 the early 1990s.

The growth of incomes in the 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 negotiations as well.

Unique win-win situations for India.

India's 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 increase Indian citizens' income source, ultimately increasing their spending power.

Photo by Jyotirmoy Gupta / Unsplash
  • India’s infamous and complex socio-economic system atmosphere is under more pressure and stress than ever before.
  • There are many areas where India needs immediate improvement such as Improvement in the International ranking of Human Development (especially in health and education), India stands very low even compared to its poorer neighbor.
  • 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 among the worst in the world.
  • No time for HEROIC moves; any bold or heroic action without proper understanding of the whole system would push the entire nation into a great economic depression or may cause more harm to the 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 witnesses a larger number of graduates with no jobs available.

Unique win-win situations for India.

  • According to the government, its efforts for enhancing the ease of living of citizens by upgrading the quality and accessibility, and minimizing the cost of a range of public services to citizens and Govt. claim their efforts save around ₹ 4,000/month.
Hard Work.
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  • According to Govt. this increase in disposable income, enhanced consumer buying power, which is estimated at ₹ 24k (₹ 24,000) crores annually.
  • This collates with the theory of the Bottom-Up growth model to be implemented across India and more reforms are needed to enhance consumer buying power through the Bottom-up growth approach.
  • Though India has claimed many titles and horizontal support on World Bank’s ranking ‘Ease of doing businesses’ but an investment to widespread the production venture has not seen any increase as forecasted, this is because consumer demand has collapsed even for basic goods 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 in 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 the “Globalization Model’, promoted by the establishment (economists, policymakers, and framers), who are busy attracting foreign investment than preparing a policy for the well-being of citizens.
  • It is obvious, that the respective citizens of India, want the Indian government to create jobs in India first and thus they want the implementation of policies, that increase income at the base of the economic pyramid than decorative growth at the apex.

People-Centric Policies: Case Study of State Govt. Delhi and the Republic of China

The India Gate is a war memorial located astride the Rajpath,
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  • Somewhere around 15 years ago, the Chinese leader once said both countries (India and China) have the same vision and goal of ‘Prosperity of their Citizens’.
  • To reach that mark and summit, each country must face the turbulent stream and walk past the uneven road feeling stones underfoot. But how do Govt do that?
  • The very first basic approach has to ask concerned establishment of policymakers 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.
  • Singapore Minister Tharman Shanmugaratnam once made a statement that the Chinese government derives its legitimacy from policies implemented through the well-being of their citizens and their satisfaction and through the vote in elections.
  • Contrary to this model, India’s constitutional structure enables each State to adopt its own model of development, regardless of 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 a progressive local, participative governance development model, which is very distinctive to the rest of the country and matches the groundwork of China in Human development indicators 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 the ‘School Management Committee’ with the 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 but also quality if higher than in private schools. This is a good example of how people-centric policies can make a positive impact on Indian society.
  • Public Health spending has doubled.
  • ‘Mohalla Clinic’, one more example of the people-centric development model has been set up for less fortunate and poorer colonies and settlements for easy and affordable access to health care.
  • Piped water to remote and unauthorized colonies and human settlement increased from 53% to 93% in about five years, reducing the dependency on expensive private water tankers.
  • Moreover, despite the water subsidies to poor settlements, the revenue collection of Delhi's Jal Board (Delhi's water Board) has increased remarkably.
  • The Electricity board has increased its reach and is 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.

Conclusions

The Regional Comprehensive Economic Partnership (RCEP), mentioned that currently, India is going under pressure from US economists, who deliberately advocate that more free trade is the silver bullet solution to India’s economic problems. There is plenty of evidence 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 and considered a complete system view. Instead of ‘Ease of doing business, the policy must concentrate on ‘Ease of Living’ as a measurable parameter of the health of the System as a whole.

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

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

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