• UGI USER
  • Dec 08, 2022
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Scenarios for the future of India, and the world

Mains GS Paper II & III: Significance of G20 countries, Bilateral, regional and global grouping and agreements involving India or affecting India’s interests.

 

ARTICLE SUMMARY

  • The fast growth of BRICS (Brazil, Russia, India, China, South Africa) economies was forecast by economists at the turn of the millennium.
    • The prediction had a large impact on the public imagination and on corporate investments.

Context

BRICS:

Background of rise of BRICS:

  • Japan: The post-war performance of Japan, had predicted that the 21st century would be Japan’s century.
  • Some Economists: Predicted the quick collapse of the Soviet Union or foresaw China’s remarkable ascent.
  • In the next decade: Japan’s growth was limping, the Soviet Union was history, and China was the country investors were being directed to.
  • India, Brazil, Russia, and South Africa were the other four Economic powerhouses.

 

WEF’s scenario planning exercise for the BRICs countries-2004(collaboration with the Confederation of Indian Industry (CII)):

  • Systems thinking: The foundational discipline of scenario planning was systems thinking.
  • Scenario planning does not begin with the data: It starts with listening to diverse points of view
    • About what is going on within a complex system at present
    • To understand the undercurrents that will surface and disrupt predictions of economists’ models.
  • Scenarios depict shapes that a country’s economy may take in the future depending on changes in social and political conditions with economic growth.
  • Systems’ scenarios include subjective perceptions of poverty and inequality.
  • Includes Mistrust in institutions of governance: which are “externalities” to economists’ quantitative models.

WEF/CII report, ‘India and the World: Scenarios to 2025’ (published in 2005):

  • BollyWorld: It revealed forces which would dampen growth in the future if not responded to in good time.
  • Atakta Bharat: It showed how increasing inequality and insecurity could compel the government to impose controls on politics for security
    • It also compels to play a larger role in the economy without adequate resources.
  • Enterprises by the people for the people: The changes that people need are produced by them:
    • By local leaders of women’s self-help groups
    • Cooperatives for water conservation
    • farming and dairying
    • Profitable business enterprises based on local production and consumption.
  • Pahale India: The scenarists projected that by this model, economic growth would be more inclusive, more environmentally sustainable, and faster too.

Positive impacts of opening of economy:

  • More opportunities for private enterprises
  • Wealth increase: Rapid increases in the wealth of the top 1%.
  • Young people aspired to become wealthy.

 

Negative impact:

  • Signs of their increasing frustration.
  • Violence was not restricted to rural, “Naxal” areas
  • Petty urban crimes, many violent, also increased.

Why these predictions about India?

  • India Shining: India was in an “India Shining” mood at that time.
  • Fastest growing economy: It was celebrated as “the world’s fastest growing free market democracy” to tempt western investors.

Way Forward

  • Glamour and violence can be mixed for the entertainment of viewers of Bollywood movies.
    • However, India’s “BollyWorld” economic growth is a real story that is becoming painful for millions of citizens living in it.
  • Increasing inequality and insecurity around the world, rising along with “free market” globalization, have resulted in reactionary forces in many countries, including China and Russia amongst the BRICs.
    • They have appeared in India too.
  • Concentration of power in governments and large business monopolies for imposing more security and pushing faster GDP growth.
    • This leads to further unrest and “ Atakta” (stalling)
  • Local systems solutions for environmental and economic problems, cooperatively implemented by communities.
    • This model solves global systemic problems
    • It also creates a more harmonious world.
    • India must promote this model in the G-20 it is hosting this year.
  • Gandhian approach: India must also adopt this “Gandhian” approach more determinedly to make “ Pahale India” a reality for all Indian citizens.
  • South-south cooperation: We need to expand south-south cooperation to share experiences on food and agriculture production and make expanded efforts to share India’s experiences for countries in Africa and Asia.

QUESTION FOR MAINS

  1. Is inclusive growth possible under market economy ? State the significance of financial inclusion in achieving economic growth in India.(UPSC 2022) (200 WORDS, 10 MARKS)