Friday, March 17, 2017

The Road Ahead - 3

"Say not, 'I have found the truth,' but rather, 'I have found a truth.'"
— Khalil Gibran (Lebanese, 1883-1931)
Word for the day
Cimmerian (adj)
Very dark; gloomy; deep e.g., Cimmerian caverns.
Malice towards none
A senior journalist who has written millions of reams about caste dynamics in Indian elections, was found to be blissfully unaware that
(A) Nai, Mochi and Halwai fall under the same category of non Yadav OBC.
(B) Marwari Vaishya are OBC in Bihar.
(c) Jat in UP, Punjab, Rajasthan, Haryana and Uttrakhand are not the same.
(d) Muslim and Sikh communities also have deep social divisions like Hindus.
First random thought this morning
With a variety of challenging roles, performed nearly to the perfection, the young actress Alia Bhatt has earned respect and admiration of millions of cinema lovers, critics and fellow professionals in the entertainment industry.
She is the same girl who was trolled and harassed on social media, not long ago, for not being able to correctly name the President of India in a TV chat show.
Ms. Bhatt, through her hard work and brilliant performances, has demonstrated well that if you do your work honestly and with perseverance, you need not bother about who is President, Prime Minister or Chief Minister. You can attain success in your field, regardless.

The Road Ahead - 3

Talking about the form and extent of wealth redistribution effort that PM Modi would need to make to put the Indian economy on sustainably high growth path, I would like to reiterate my views about the stages in which a typical democracy evolves.
Evolution of a free democratic society occurs broadly in three phases – empowerment of people, enablement of people and engagement of people.
In the empowerment phase people are empowered with constitutional and legal rights so that they could construct the social and economic organizations they would want to live in. The political organization is largely derived from the socio-economic organization of choice. In modern world, parliamentary democracy is the most popular political organization for societies choosing to organize themselves in a free and capitalist economy.
The transition from an aristocracy or oligarchy to parliamentary democracy is often a chaotic process because the people might not be properly equipped by education to select the best rulers and the wisest courses.
In the second, enablement phase of evolution the so empowered people are enabled through a variety of endeavor so that they could pursue the socio-economic path of their choice. Social equality, economic equality and gender equality are some key desired outcome in this phase. Wealth redistribution through taxation, welfare schemes and legislative provisions (like land ceiling, currency elimination, restrictions on business and asset ownership etc.), inclusion of economically poor, socially oppressed and women in government and economic activities are some of the major efforts seen in this phase.
The conflict between the wealthy & powerful (landlord) and the poor & oppressed during enablement phase often causes civil unrest. The inadequacy and inefficiencies of institutional framework to supervise the wealth redistribution process invariably leads to rise in instances of corruption in public life.
Unfortunately, in many cases it is also seen that some intended beneficiaries become too powerful and appropriate power and resources meant for their peers. This creates division and mistrust in the society and elongates the process of enablement.
In the last phase of the evolution, the empowered and enables people take part in the building of strong economic institutions and free market by engaging themselves in the growth and development process. This is usually the golden period for any democratic society that has chosen free market economy as their preferred socio-economic organizational setup. In this phase a large part of the population participates in the virtuous cycle of higher earnings – consuming – saving – investing – earning leading to sustainably higher consumption and investment demand.
In Indian context, our constitution envisaged a democratic social organization with free market economy. The people were constitutionally and legally empowered from day one of constitution coming into effect. (Interestingly, the USA took almost 200years to give full and equal rights to all its citizens through The Voting Rights Act of 1965).
However, in practice the empowerment process was delayed by at least three decades. Firstly, the Indian National Congress (INC) which was the primary vehicle for freedom movement transformed itself into a political party. The transformation ensured that the Congress Party which was dominated by the feudal lords and elite class at the top became overwhelmingly dominating political force in the country leaving little for the dissent or competition. The policy making thus focused on retaining control of most resources and activities with the government (by proxy with Congress party) and providing for just the elementary necessities to the common man.
All the voices who spoke for social justice, empowerment and enablement were forced either to fall in line with top echelons of the party or quit. The opposition to the Congress thus mostly came from communist/socialist forces which survived on parochial support base amongst some caste, community or region. The empowerment and enablement processes were thus hindered to a great extent.
It was in 1980’s when first time a nationwide movement took shape to seek empowerment and enablement for common people of the country. The enablement process started a decade later with government slowly giving up control over resources and economic activities.
Given that the process of enablement has so far mostly been involuntarily and heavily influenced by electoral considerations rather than social-economic reality, it has been marred by large scale irregularities, corruption, and inefficiencies.
The socialist movement in the country gained tremendous momentum in past 3 decades. These forces ruled many states and often played a critical role in formation and running of the federal government. However, for the lack of a credible and wise leadership, these forces have been often seen degenerating into feudal fiefdoms of few individuals and their families.
We should analyze the failure of the likes of Samajwadi Party (SP) led by Mulayam Singh Yadav, Rashtriya Janata Dal (RJD) led by Lalu Prasad Yadav, Bahujan Samaj Party (BSP) led by Mayawati etc., and continued domination of Congress by feudal forces, in this light.
PM Modi has shown solid resolve in accelerating the process of enablement of people. Massive drive for financial inclusion, digitalization, skill enhancement, social security etc. have been undertaken during last three years. The results of the same in the economic terms may not be visible as yet. But hopefully, we shall see positive outcome in next few years.
The unconventional move to abolish 86% of national currency in circulation, shall also be seen as part of the drive to redistribute wealth for enablement of people. Its success, though questionable at this point in time, shall reflect in better tax compliance (hence more tax revenue for public social expenditure) and lower cost of credit for SME borrowers (due to better CASA and higher money velocity for bank).
This enablement effort should logically lead to beginning of engagement phase of evolution - the golden period for economy and markets.
....to continue

No comments:

Post a Comment