30th December 2019 : The Hindu Editorials Notes: Mains Sure Shot
Question – India needs a bottom-up growth model. Elaborate.(250 words)
Context – the disparity in India’s development.
What is bottom-up approach?
- There are two types of approach – top-down and bottom-up, and they are opposite of one another.
- The bottom up approach means that the policy decisions are taken at lower levels of administration, say districts, keeping in mind the requirements of that particular area.
- In this approach each region can have its own planning and address its specific needs accordingly.
- On the opposite side, top-down approach means that decisions are taken at a higher level of administration, say a higher body of planning, and then these decisions are passed on the districts and they merely implement them. In this approach the specific local needs of an area are usually neglected. The policies are more generalistic. Its like one size fits all approach.
- For example, Bottom-up approach of urban planning’ generally means that local governments or committees formed by local citizens are responsible for urban planning of their own districts, solving the urban problems and planning their future development, and thus the districts link together to make the whole nation or region become more developed.
- So, the ‘bottom-up approach’ is more ‘man-centered’ than the classic ‘Top-down approach’ which means the districts need to follow the guidelines and instructions of the central government to develop.
What does the article say?
- The article makes a comparison between China and India, the two most populous countries in the world, and says that both embarked on new journeys around the same time. But more than 70 years later, China has progressed much faster. India, other the other hand, is yet to reach the development indicators that China attained back in the early 1990s.
- It says that the reason is that India’s policies were more ‘growth-centric’ than ‘people-centric’ unlike China.
- So if India wants to progress faster and reach a new parameter of development, it should make its policies people-centric i.e. keeping the needs and development of citizens in mind while making policies rather than keeping economic growth as the aim. Because if the citizens grow and prosper, the economy will prosper simultaneously. So the citizens at the bottom of the pyramid must be the focus of reforms for sustainable growth
- For example, The Communist Party of China demands that local officials address the needs of citizens’ effectively, as does Singapore’s government. Despite being a one-party majority State (the Communist party), the Chinese government derives its legitimacy from citizens’ satisfaction with their well-being, not from a vote in an election.
- The Indian constitutional structure on the other hand gives the freedom to each state to decide its model of development. Thus, there is a ‘Kerala model’, a ‘Gujarat model’, and now a ‘common man’s model’ implemented by the Aam Aadmi Party (AAP) in Delhi.
- In this context if we compare the various states then we find that the states which adopted a ‘people-centric’ approach like Kerala and Delhi are more prosperous than others.
- For example, Local, participative governance has been a distinction of Kerala’s model. and the State has been well ahead of the rest of the country, matching China in its Human Development Indicators in education, health, and women’s inclusion.
- Delhi in the past five years has adopted a people-centric model of government. It has established School Management Committees with parental involvement. Teacher training budgets have increased five-fold. As a result the performance of Delhi’s government schools is not only higher than the national average, it now exceeds the performance of private schools in Delhi.
- Also Public health expenditures have more than doubled because ‘Mohalla clinics’ have been set up in poor colonies to provide accessible and affordable health care.
- The share of unauthorised colonies provided with piped water has increased from 55% to 93% in just five years, reducing the need for poor people to pay for expensive tanker-delivered water. But despite water subsidies for the poor, the Delhi Jal Board’s income has increased. Electricity supply has expanded to include 20% more consumers. Amongst Indian metros, Delhi provides the cheapest electricity. Yet, its distribution companies, all in the private sector, have improved their financial performance.
- The simple reason behind this is that since the government is spending a lot on people’s welfare needs like education, water and medicine, the common people have to pay less for these, leading to more money left in their hands (disposable income) to spend on other things like consumer goods. So this approach not only leads to the welfare of the people but also helps in generating demand leading to simultaneous economic growth.
- Even the government (Delhi government) has computed that its programmes for improving the ‘ease of living’ of citizens by improving the quality and accessibility, and reducing costs, of a range of public services has increased savings per family by ₹4,000 per month (i.e. their disposable income has increased and they have 4000 rupees extra each month compared to earlier to spend on other things). So, the increase in disposable incomes has resulted in additional consumer-buying power, estimated at ₹24,000 crore per annum.
- This proves that growth must be bottom-up to be equitable and sustainable.
- The failure of top-down approach is evident from the fact that though India has climbed many rungs on the World Bank’s ‘Ease of Business’ rankings as a result of government policies like making it easier to get a license or easy clearance to set up factories. Yet, investments to expand production ventures have not increased much because consumer demand has slumped, even for basic items like packaged biscuits. So the primary focus has got to be not policies but improving the consumerism of the people.
- It seems odd that democratically elected governments in many countries, including India, who should be focused on citizens’ well-being, have become so focused on making it easy for global capital to do business in their countries.
Why is it important for India to understand and adopt this approach urgently?
- India’s complex, socio-economic environmental system is under even greater stress. The country must improve on many fronts simultaneously. India ranks very low in international comparisons of human development (education and health), even below its poorer subcontinental neighbours.
- It is the most water-stressed large economy in the world; its cities are the most polluted. India’s economic growth is not generating enough jobs for its burgeoning population of youth: the employment elasticity of India’s growth (numbers of jobs created with growth) is amongst the worst in the world. Bold actions without an understanding of the whole system can cause great harm. For example, the bold move to demonetise the currency notes in 2016 was an egregious example.
- Unemployment of persons with vocational education has gone up between 2011-12 and 2017-18, from 18.5% to 33%. India now has a larger number of frustrated youth.
- India’s challenge now is to build an Indian ecosystem in which competitive enterprises will grow to create more opportunities for jobs for youth and for increasing citizens’ incomes. Growth of incomes in India will make India more attractive for investors.
- A stronger industrial system will give India more headroom in trade negotiations too. India’s industrial and entrepreneurial ecosystem’s growth must be accompanied by an improvement in environment. Policies must be managed with a whole systems view i.e. a broader and futuristic view.
- It has to be understood that while ‘Ease of doing Business’ gauges health from a business perspective, ‘ease of living’ should become the measure of the health of the whole system.
- Also, here Mahatma Gandhi’s talisman provides a good test. The government should think of the needs of the poorest citizens first. Reduced duties on imports benefit citizens as consumers. However, a citizen’s more fundamental need is for a good job and source of income to buy the imported goods. India urgently requires an employment and income strategy to guide its industry and trade policies.
Note – today there is another article titled ‘Good Governance’. It doesn’t have much content but the following are the major highlights:
Question – Comment on GGI and what does it show?(200 words)
Context – The GGI data has been released.
What is Good Governance Index (GGI)?
- It is a nation-wide comparative study of States on governance i.e. how each state is performing on different parameters compared to others.
- It is being carried out by the Government of India.
- It is a welcome exercise to incentivise States to competitively deliver on public services to the citizens.
What are the findings?
- The findings of the GGI’s inaugural edition (i.e. first time GGI index has been released though there are other indexes that compare and access the states) are significant in many respects. Although Tamil Nadu has always had the reputation of being a better-run State, it is only now that it is ranked first in any study of this kind. Its strength has been the ability to ensure stable and smooth delivery of services without much ado. But it is not the only southern State to have put up an impressive performance. Three of its neighbours are among the top 10 of the big 18 States, one of the three groups formed for the study with the north-east and hill States and Union Territories being the other two.
- Of course, traditionally, the south has been ahead of others in several parameters of development. What is more significant about the GGI is that the dubiously-labelled “BIMARU” States are seeking to catch up with others in development. Of the nine sectors, Rajasthan, a “BIMARU” State, has finished within the top 10 in five sectors, Madhya Pradesh in four and Uttar Pradesh in three. In agriculture and allied sectors, almost all the “BIMARU” States are within the top 10 category and in human resources development, U.P. and Bihar figure. In the composite ranking, Chhattisgarh and Madhya Pradesh are ranked fourth and ninth, respectively.
- The key message is that the GGI shows that these northern States can catch up with others in due course of time, if the political leadership shows the will to overcome historical obstacles and stays focused on development.
Review of GGI:
- All indexes have their own merits and limitations. Similarly the GGI has its limitations because some indicators — farmers’ income, prevalence of micro irrigation or water conservation systems and inflow of industrial investment — have been left out. The indicator, “ease of doing business” has been given disproportionate weight in the sector of commerce and industries, to the virtual exclusion of growth rate of major and micro, small and medium enterprises.
- But notwithstanding these shortcomings, what is noteworthy is that the Centre has made an attempt to address the problem of the absence of a credible and uniform index for an objective evaluation of the States and Union Territories.
- It goes without saying that the GGI requires fine-tuning and improvement. But that does not take away the inherent strength of the work that has been accomplished, keeping in mind India’s size and complexity.