Wednesday, January 17, 2018

Decolonialization of economic model

"The whole secret of existence is to have no fear."
—Swami Vivekanand (Indian, 1863-1902))
Word for the day
Nonviolence (n)
The policy, practice, or technique of refraining from the use of violence, especially when reacting to or protesting against oppression, injustice, discrimination, or the like.
Malice towards none
Sophistry is a form of violence, perhaps the worst kind.
All those who avow by Gandhi, must avoid sophistry and chicanery of all sorts.
First random thought this morning
"A democracy can neither forbid propaganda nor allow it. It cannot forbid propaganda without undermining freedom of speech and expression. But it cannot allow propaganda without destroying any hope of cultivating an enlightened citizenry whose political and economic decisions are based on evidence rather than misinformation, on facts rather than partisan descriptions, on reasoned analysis rather than emotional appeals. The first paradox of propaganda is that democracy cannot afford not to tolerate propaganda's open or concealed contempt for every democratic ideal." (Ellul (1965) as quoted by Dennis A. Rohatyn in Philosophy History Sophistry (1997).

Decolonialization of economic model
In past decade of so a number of institutional changes have taken place in Indian economy. Many of these changes are important as these provide a platform for higher economic growth in decades to come. Some of the most important institutional changes, in my view are as follows:
Historically, various regions of India have witnessed an undesirable skew in the growth trajectory. The coastal India has seen most of the industrial development, mostly due to logistic infrastructure constraints that made industrial development in hinterland economically unviable.
Besides coastal towns, the important cantonments of Mughals rulers and British empire have seen higher development of trade and commerce due to better infrastructure and significant government business.
The skew in industrial development got permeated to the social constitution of these regions also. The commercially developed regions have mostly seen better development in areas like higher education, financial inclusion, water, sanitation and healthcare.
Due to better education facilities, these areas naturally got most of the engineering and scientific talent and thus got lead in developing as important center of modern technology and ITeS services.
For obvious reasons these are the centers that attracted most of the foreign business interest also.
These industrially developed areas accounted for most of the tax collections, and therefore development resource allocation. The skew therefore kept worsening over the years. Even the historically superior agriculture states like UP and Punjab lost to Gujarat, Tamil Nadu, Maharashtra and Andhra etc. in terms of growth in agriculture GDP.
In past three decades an effort has been made to institute a shift in the industrial base to industrially underdeveloped areas through a variety of fiscal incentives. These efforts have yielded results to an extent. But since most of these incentives were driven by political expediency without much economic rationale, the results have not been up to the desired mark.
The states and areas that produced maximum raw material and labor were exploited by industrially developed states, as the colonial economic model of British continued even in independent India.
The changes in policy relating to exploitation of minerals, formula for allocation to revenue to states, GST, land acquisition laws etc., seek to diminish the skew by empowering the resource owning states. Some of the faster growth in erstwhile backward states in recent past could be attributed to these changes. Given that maximum youth population is located in these states only, we shall see the economic changes translating into qualitative social changes also in due course.....to continue tomorrow

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