Bottom-up economic growth, not trickle down, will bring about truly inclusive development

By Arun Maira

The rise of regional parties along with problems of coalition management is causing concern for the governance of the country, the process of reforms, and economic growth. By 2000, coalitions and regional parties had already become the norm and there was a yearning for political unity across the country. In that year, Indians from many walks of life came together to understand the systemic forces shaping India and the world and project scenarios of India’s future.

They predicted that growth would boom for a while and then decision-making and growth would stall unless alternative theories of development and governance were vigorously adopted.

The scenarists imagined four political configurations that could emerge for the country depending on election outcomes. Two of these were in the category of ‘Kaleidoscope’, in which power at the Centre and in the states is shared by several parties. One version of Kaleidoscope was ‘Federal Harmony’, in which parties respected each other’s rights and learned to work together. The other was ‘You stab my back and i’ll stab yours’, in which frontpage entertainment would be provided by politicians.

The other two scenarios were in the category of ‘Monochrome’, in which one party would dominate throughout the country (a condition we have not had since the 1980s). One version of Monochrome was forecasted as ‘Ramrajya’ , in which the leadership would be magnanimous and electoral losers cooperate with the nation-building agenda. The other was ‘Volcano’, with seething trouble and losers waiting to strike.

The scenarists also discovered a model of development and governance that would produce good outcomes for the country irrespective of which political scenario emerged.

In 2000, the scenarists predicted that India was slipping into a ‘Bollyworld’ model of development. Rapid growth was accompanied by increasing inequalities. Personal wealth and glamour were becoming markers of India’s rise. While poverty was reducing, resentment about unequal growth was also rising with demands for faster satisfaction of aspirations. Violence was spreading across larger swathes of the country, and young aspirants demanding ‘satisfaction now’ would commit more violent crimes in cities too.

Glamour and violence create tensions which infect the political space. The scenarists anticipated a second stage if these tensions were not addressed effectively. This stage was ‘Atakta Bharat’, in which interactions between political parties and between experts would become like ‘buffaloes wallowing in a pond’: unable to agree and decision-making stalled. Meanwhile, “the children would be waiting” according to the scenarists, for improvements in health and nutrition, education, and jobs for when they grew up. Inaction would dampen growth, undercut the demographic dividend and result in deeper social and political problems.

The third development model was based on a better architecture of governance along with an alternative theory of inclusive growth – not dependent on ‘trickle down’ but bottom-up contribution to growth. Not on ‘first growing the pie before sharing it’, but on growing the pie together, with faster growth of livelihood opportunities and strengthening local governance, capabilities and entrepreneurship.

The metaphor of this model is ‘Fireflies Arising’. The World Economic Forum asked Oxford Economic Forecasting in the UK and the National Council of Applied Economic Research in India to run the three models – Bollyworld, Atakta Bharat, and Fireflies Arising – on their computers to predict rates of GDP growth and poverty reduction. The results were that Bollyworld and Fireflies Arising would both accelerate growth. But while Bollyworld would degenerate into Atakta Bharat and growth would slow, Fireflies would be sustainable — socially, politically and economically. And poverty reduction would be fastest with Fireflies.

Fireflies Arising is a model of inclusion driven by widespread growth of respectable livelihoods rather than handouts to the poor. It is a model of governance based on a ‘4L’ architecture: localisation, lateralisation, learning and listening. Under this model, power will shift from the Centre to states and local bodies. Solutions will be local, not ‘one size fits all’ prescriptions designed by experts at the Centre. Silos will be broken and there will be more collaboration laterally: between government departments and between NGOs, governments and businesses. Collaboration is essential to develop new, systemic solutions. Therefore we need more dialogues in which people really listen to each other, rather than debates in which they aim to demolish others.

The scenarists of 2000 tested this architecture of governance in all four political configurations. They found that people benefited and the country would be more stable with this form of governance irrespective of which political configuration is thrown up by elections.

The conclusion is that Fireflies Arising, with the 4L governance architecture, provides an attractive vision for India’s future. Inclusion is faster and more dignified, and the economy grows faster and is more stable too. No wonder the World Economic Forum’s experts, who had also examined alternative scenarios of China’s future, described Fireflies Arising as ‘Pahale India’ (India First): the model by which India would emerge as the most respected country in the world.

(The writer is a member of the Planning Commission.)