Strategic Shifts needed in India

In India, lot of things remain the same as there is a degree of consensus prevailing about the way things are. For India to take a new course, this consensus needs to be broken. Margaret Thatcher, the Iron Lady who played a stellar role in transforming the U.K. hated the very notion of consensus calling it “the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes but to which no one objects”.

India needs the following strategic shifts from the prevailing consensus.

One: From overreaching judicial system to one that is focused, bold, lean and agile

We have accepted larger role for judiciary over the years. This needs to change. To make this happen, the executive and legislature should get their act together. This may need greater openness in Governance as well as greater responsiveness to people. The right to information should be reinforced with right to response and right to justice that should apply to all walks of life.

Governance should have balance of normative, punitive and at times coercive actions. However when you try to approach everything through constitution and fundamental rights there is a tendency to look at everything in binaries and either resort to coercive action or inaction. In life there are no absolutes. Lot of things are right or wrong based on societal norms in that case we should encourage normative action. In many cases we should penalize people through fines instead of coercing people and institutions to fall in line. In the west even reputed institutions are fined than shut down. Here is the explanation on 3 modes.

1. Normative – rule by upholding and propagating norms; Confucian rule by virtue/rites.

?2. Punitive – rule through legal institutions, which effectively means through punishment and reward, according to some system

3. Coercive – rule through force and threat of force, in the absence of a system of formal law for its application.

More details at https://reactionaryfuture.wordpress.com/2016/05/15/normative-punitive-and-coercive-states/

Two: From Deficit budgets to balanced budgets

In place of loose public spending on development we need to move to strict prioritization of development projects. New projects should be started after completing the current ones in time-bound manner. Generally, lot of development work is at best desirable and at worst unnecessary. We should focus more on essential projects and strategic projects. We probably can do away with fly-overs in favour of well managed junctions and white-topping of roads in favour of lot of ordinary roads without potholes. Let us also focus on aesthetics and ask people what they really need.

Three: From excessive Debt from people to more equity to people in both Private and Government owned entities

Instead of giving huge loans to industry, let them raise more equity and share the wealth with people. Let the industry also make judicious choices instead of spreading too thin. Government should reduce its shareholding across the board in all PSUs to 26 per-cent and leave the rest to common public with very few exceptions.

Wide-spread ownership of stocks and bonds should be the next frontier in financial inclusion.

Dan Acemogulu in his book "Why nations Fail" talks about extractive and inclusive economies. He characterizes British colonizers as inclusive and Spanish/Portuguese colonizers as extractive, East India Company distributed stocks to British citizens widely increasing their wealth. This also led to a more innovative economy compared to other colonizers who did not share wealth.

Four: From Populism and indulgence of the rich to pay for your own development and security

At the level of Panchayats and in case of towns, lot of funds come from higher level of Government. In some cases, even up-to 93 per-cent. Many of the priorities get decided top down. Instead let the money be collected locally and priorities be decided locally. The higher-level Governments can provide matching grants or supportive grants. In the same manner when Government provides services or infrastructure to the rich, let it charge them. In general, there should be 1-1 association of what people pay and what people get and people need to know where, when and how their money is spent. May be a village needs to develop a water body and a community may need to run their own school, instead of getting funded for a central scheme. Let decentralized development take center-stage. Involve people in choosing what to do and let them own the projects.

Five: Falling Rupee to Digital currency backed by gold

Indian Rupee keeps depreciating due to variety of reasons. One hedge is the reserves in US Dollars. India can build another hedge by issuing a digital currency backed by Gold, which Indian citizens invest in and which can be used for external trade as well as a reserve for rainy days. This can in turn help the Rupee itself to retain its value.

Six: From focus on agriculture as a sector in distress to focus on broader rural economy with agriculture as engine of growth

The very act of all kinds of support from Government at best boosts the production which in turn depresses the prices. Agriculture as a sector is bound to face vagaries. The Government instead should focus on rural economy where our villages and towns again thrive with all kinds of activity. Link them through E-commerce. Steadily reduce involvement of Government. Let the sector find its own feet. Make agricultural income taxable above 10 Lacs by making any income above 10 Lacs taxable irrespective of the nature of income.

If agriculture is seen as growth sector our whole approach to it will change. We should stop seeing it as a burden or necessary evil or a vote bank.

Seven: Instead of big cities, promote medium towns. Instead of states focus on districts.

Big cities cost a lot to run and they destroy the environment as they grow If we have very good physical and digital connectivity and reduced tariffs, economic activity can be widely distributed across large towns. Instead of State Governments being all powerful yet ineffective, let district administrations and development councils steal the show.

Eight: From an opaque taxation regime to transparent and accountable one

The taxes should not be a tribute and tax amount should be used to related objectives. If taxes are collected for Petroleum products, they should ensure roads without potholes. People should see that correlation. All product should be covered under GST. Sin taxes, on alcohol result in a perverse situation where Government is dependent on people drinking. At the same time do away with bans and encourage moderate drinking of greater portion of milder and probably local brew.

Nine: From regulated, tiered education system to liberated, purposive education system.

If there can be Central Board of School Education, there is no reason why there can not be Central Board of College Education that can handle all the undergraduate education, working directly with autonomous colleges, in a loosely coupled manner. Let Universities be there only for post-graduate education. Let Institutes of excellence focus on innovation and developing deep expertise.

Instead of uniformity let us focus on diversity and differentiation. Let these colleges revive ancient Indian know-how in Sanskrit as well as the one in local languages.

Ten: Open the country for foreign business and professionals and free the country from stranglehold of neocolonialism and global religions

India for many decades was closed for business but more than welcoming for Christian Evangelists, Islamic ideologues and neo-colonials. Now this process needs to reverse. Let India be very open for business and let us revive our own culture, tradition, ideas and ideals.

Eleven: From Secular, Socialist to Hindu Dharmic and Entrepreneurial

In India neither socialism nor capitalism worked partly due to lack of ethics. In addition, India is in a state of turmoil due to wearing secularism on the sleeve. Even school prayers get questioned and conversions of Hindus continues unabated. It is high time all this stop.

Liberals and may be most people may cringe at dismantling secularism. But unfortunately, the brand of secularism practiced in India has divided Hindus, discriminated against them and demonized Brahmans. Selective application of RTE, intrusion into religious customs, delaying Ram Temple case are some indicators. These cases are not taken up and another set of cases are which feed neo-colonial and communist agenda get priority.

People try to scare you that India will become Hindu Pakistan. India has better examples to follow from Pakistan such as Raja Ranjit Singh's Kingdom in Lahore where all communities lived harmoniously without putting down Hindus or Sikhs.

In our neighbourhood every other nation is theocratic. Those who decry 2-nation theory did not ask for Bangladesh to be integrated back to India. Even though Nepal is secular now they ban conversions as well as cow-slaughter.

On top of that it has compromised national security repeatedly. It has kept Indians cut off from their roots and heritage and ensured a field day for foreign-funded activists and NGOs.

Twelve: From GDP Growth to Healthy and Strong Economy

Chasing GDP growth has meant in some cases the growth was fueled by reckless lending. Instead if you ensure the economy is healthy and strong and people are productive and innovative everything will fall in place. Now there is too much of inequality and lot of funds got diverted out of country and too much corruption. Once we focus on health and strength of economy, growth becomes automatic.

Thirteen: From unemployment to productivity, innovation and monetization

Instead of creating jobs in bulk through hook or crook, it is better to focus at micro-level. Make it easy for qualified people to get the right jobs by involving match-makers. Those employed should be productive and paid well. The companies or individuals should be able to monetize their products and services better.

Unemployment not only impacts the unemployed but also causes loss to the nation due to lost productivity. If a competent person does not get a matching opportunity again it is a loss to nation. If a person who is contributing does not get compensated well again is an issue to be fixed in national interest. So some degree of balancing is needed across professions, sectors and people.

We should change our paradigm of creating jobs through higher GDP growth to one where there is greater focus on getting people best possible opportunities one at a time and in turn causing economic growth. Go from micro to macro.

Employment and Income generation should be tracked as composite metric. Many people feel that India's problem is low wages and salaries than lack of jobs. Lot of people due not get salaries due to them. At the other side we have people who get high salaries as entitlement or due to market dynamics without proportionate value creation.

Fourteen: From me-too to me-me

From constitution to culture and from sports to science and in nearly every field we follow other countries.. It is high time we focus on what we need, want and aspire independent of others. We need to encourage free thinking. That is when we have real freedom.

Fifteen: From Soft Power to Strong Power

Far too long, India has been acting as a nice boy when faced with bullies. It is high time India stands up strong and takes tough actions whether it is within, with our neighbours or world at large. However certain leaders and nations relish constructive confrontation while others expect mutual respect and accommodation. We can not use the same approach in every case.

It is also highly naive to take pride that India never invaded another country. That shows refusal to learn from history. On one hand because India did not venture and invade the Northwest, some invaders invaded India repeatedly and finally succeeded. On the other hand Indian Kings did venture both towards Northwest and South-East. Today the civilizational influence of India has shrunk to a third of what it was earlier.

Sixteen: From discourse dominated by division and discrimination to diversity and differentiation

Indian traditions and customs are many cases projected as discriminatory and used to divide people into discriminated versus discriminating and nothing more. In reality every group that uses identity of caste, varna, language, region, religion, profession and tribe is about diversity of cultures and differentiation. This point is lost out by those who want to run a steam-roller on anything native and destroy any differences.

Seventeen: From respect to all religions to mutual respect and reciprocity

It is important to influence others to accept a superior value system. Currently Hindus and Hinduism get a raw deal. For example there is inadequate acceptance of Hindu religious structures and practices in other countries. In entire middle-east there are probably handful of temples. Other religions do not respect the sensitivities of Hindus as far as conversions go. Many temples were destroyed in places like Kashmir, Pakistan and Bangladesh. India never raised its voice in international forums.

Eighteen: From profit as dirty word to fair profit as a virtue

In many cases non-Profits are used as a front to indulge in illegalities. And any individual who ventures in sectors like Education need to be fairly compensated for their effort. Instead of continuing the hypocrisy accept profit as a virtue but limit profiteering

Nineteen: From tolerance as an asset to tolerance as a liability

Our nature of tolerating inconvenience and getting around them can prove to be a liability. In day-to-day life we accept lot of problems which civic authorities can easily fix. The same attitude we carry to every walk of life. In contrast, in the west they ask for adherence of minimal standards, basic facilities and insist on things working. This at times leads to innovative solutions that benefit the society at large.

Twenty: From Electoral Democracy to Pervasive, Participative Democracy

Real democracy starts after elections and it needs to operate every day and everywhere. That means every public institution as well as Government Departments should take inputs from people and urge their participation in decision making. Every institution should have a way to collect grievances, suggestions and feedback. The Government should have mechanism to quantify these metrics and action plan. The people’s representatives should be in the loop and on top of things. Even without involvement of people’s representatives’ lot of things should work as business as usual. This democratic spirit should pervade all institutions including private sector.

Using digital and social platforms lot can be achieved.

Twenty one: From lowest/highest bid/price/rate to Fair bid/price/rate

When Government tries to get the lowest tariff say in a sector such as Solar, it make the whole sector unviable. The same may happen when auctions happen to aggressive bidders. The schemes such as second price auctions have recognized this problem and are a respobse to such problems. The Government should instead do away with this dogma and look at fair price and choose the best supplier/partner for that price.

For most of the common place things like laying roads, fair rates should be publicly available subject to being contested or commented on by experts and any civic body should have the freedom to use the fair rate and choose the supplier of its choice. Then suppliers have to compete on quality, service, reliability and reputation. This scheme can cover probably 80-85% of items leaving aside unique items which may need more sophisticated approach. Rate contracts helped IT industry grow by leaps and bounds and led to a industry which was ethical and transparent.

Even for sectors where Government has ability to regulate, Government should ensure prices are bounded. The legal framework should discourage price wars as well as inflated prices. While competition is good, anything in excess is detrimental.

Twenty-Two: From 3-sector Economy to 5-Sector Economy

Indian Economy is divided into Agriculture, Manufacturing and Services. At present 19% of GDP is attributed to Agriculture, 17% to Manufacturing and everything else is lumped as services. Generally Manufacturing is promoted using all kinds of incentives with the hope that it can create more jobs. However the job-creation ability per Rupee of revenue is becoming less and less due to automation. We propose a 5-sector approach where Services is divided into Knowledge-Design-Innovation, Trading and Services. Here KDI focuses on creative and intellectual faculties, trading is about inter-mediation and services is about fulfillment. For example is an innovative product is imported into India and popularized it can create lot more trading jobs than if a mediocre product is made in India. We may get ideas to customize the product and make in India. We can also be design-house and get the thing manufactured in a place which gives greatest efficiencies. USA and Japan have excelled in design and corner disproportionate portion of profits while getting thing manufactured in China. If we let all these 5 sectors to grow and embrace globalization, Indian economy can grow in leaps and bounds. Each sector can increase the multiplier as far as revenue/resource and profit/resource. This is particularly important in areas like research where we may have the best brains to create something new but may not have the precise approach to make it a commercial success. Thus depending on the situation we can occupy different parts of global value chain without being dogmatic about doing everything in India in some cases and nothing in India in other cases. Trade is a big opportunity for India and it is essential that it is tracked separately. India is blessed with markets full of aspiration and hope.

Twenty-three: From expecting state to do everything to get communities and new-gen platforms to center-stage

Economy is divided into Government, Public-Sector, Private-Sector and informal sector and so on. In pursuit of borrowed ideologies we have sidelined communities who can play a central role. Domains such as Education, Health, Running Temples, maintaining lakes all should go back to communities. State should focus only on those communities/sections who do not have the wherewithal to set up their own institutions. At the other end state should focus on setting model institutions and centers of higher learning which communities can not easily fund. Looking to the future, there should be greater role for peer-to-peer platforms and Uber like companies which connect the people, Economy should be divided into Government, Public, Private, Community and Social Commerce.

Twenty-four: From planning economy to planning ecosystems

Planning Commission was done away saying most activity now is market-led. But planning is still needed but at ecosystem level, This should happen to agriculture, finance, employment, etc. Otherwise we are just leaving on hope and counting on luck.

Twenty-five: From agriculture has a sector to sympathize about to agriculture as sun-rise sector

Government should move from free loans, subsidies and price support to make agriculture investment driven. Firstly lot of benefits from these interventions may go to richer farmers. Even when they go to farmers they need them, labourers do not necessarily benefit. Instead Government should form Agricultural Corporation of India(ACI) with minority participation and invest in agriculture by giving up-front cash support with expectation of partaking return from that investment. That way Government can guide the investment and product mix, deploy environment-friendly techniques. The farmers should have the option to lease their land to ACI and let ACI run it or provide land and labour with only capital coming from Government. Similar models can be tried out. Those farmers who are confident in managing profits on their own can continue to do so. Exports should be freed up and prices should be fair and reasonable. Doing away MSP's itself can balance the production relative to demand.

Twenty-six: From State help to Self-help

Currently most scholarships even loan scholarships are open to people with less than 5 Lacs income, the amounts disbursed are low. Instead of this if Government starts a student Loan Scholarship Fund which is open to all students irrespective of parental income that can disburse large loans, in a matter of time it can sustain itself. Let students who get employed sustain prospective students. At national level this can be scaled up and with richer alumni can be a catalyst for higher education

Twenty-seven From Targeting to Universal Benefits

Instead of targeting benefits that too poorly, give benefits to all, but based on what they actually need. This can streamline lot of policy issues. Every citizen irrespective of rich or poor benefits from the state. Now this can be quantified and reconfigured to suit different needs of different people.