How India will shape the new global order
Professor Sarat Mahanta Memorial Lecture
By Jayant Sinha
he Kautilyan sarkar also plays a subtle, but vital role in market development. Such market development is crucial to eble our entrepreneurial economy to flourish. Markets develop when important “public goods” are provided. By public goods or market infrastructure, I mean that the benefits of such items cannot be fully monetized by those who fund them. This is true for a range of goods, such as creating transparent rules for pricing of energy services; or protocols for administering certain new procedures in the health care system. The private sector will invest in such public goods only up to a certain extent, which will always be short of what is socially optimal.
So we need coordited action between the state and private companies to build market infrastructure and help entire industries get off the ground. This solves an important prospective market failure: the “absence of collective action”. In the absence of coordition, some of the capital that is needed for the market to develop may not materialize. Entrepreneurs and private capital may hesitate to invest if they believe that market infrastructure – such as regulation, rules under which licenses are granted, or access to public health facilities or franchises are under-developed or unclear. Our government is doing that with Aadhar, BHIM, UDAN, and facilitating the growth of electric vehicles.
So before the games can begin, before the players decide to take the field, before the crowds fill the seats, the Kautilyan sarkar has much to do. The ground has to be green and pristine, comfortable seating and facilities are required for the spectators, the rules of the game have to be defined and explained to the players, the pitch has to be prepared, the scoreboard has to be set-up. And, filly, the two umpires in their white coats armed with light meters (and with the help of a third umpire back in the pavilion) walk onto the field.
Only when all this is done, can the players get on the field. Yes, they will score delightful centuries, astonish us with their athletic catching, and bewilder the batsmen with their penetrating bowling. But it is the umpires, groundsmen, and cleaning crews that make it all possible. So it is with a modern-day, efficient state that supports innovators and entrepreneurs.
Being such a sarkar takes a lot of work, perhaps more work than being a Nehruvian sarkar. Citizens are treated with dignity, corruption is reduced, and the fiscal situation improves dramatically. The state is lean and focused on value-added activities. This is the rightful role of the state – and the only way to build a great tion.
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I will conclude now.
India’s economic destiny is to providefrugal products and servicesto the Next 6 Billion, the Next World. We are already one of the world’s leading producers of IT services, generic pharmaceuticals, small cars, and motorcycles. We will soon become a manufacturing hub for electronics and defense equipment. As we export our frugal and innovative industries across the developing world, we will likely spur growth and development for other countries in the developing world also. Such economic growth is consumption-driven and demand-led.
India also offers a template for redefining the role of the state in the Next World. We will run a rules-based, technology-driven state that ebles markets to flourish through well-regulated competition.
Thus India is poised to provide fresh impetus to global growth. India’s economic growth will be significant in terms of its absolute contribution to global economic activity. But India’s development model is uniquely innovative, frugal, and green. As other developing countries begin to follow India’s frugal model, it could potentially drive much more sustaible and equitable growth for the entire planet.
So here in Guwahati, you can be pioneers in driving this exciting transformation of India. You are working on innovative projects and government programs. You are inventing brilliant new solutions to our challenging problems of poverty, disease, and climate change. Perhaps someone young entrepreneur in Guwahati will createthe next Indigo, the next Google, and the next Apple.
So you will surely go forth and transform Assam and thus India. And, with your innovation and your energy, you will surely also transform the world.
Thank you very much.
(Jayant Sinha is India’s Minister of State for Civil Aviation and a Lok Sabha Member of Parliament from Hazaribagh, Jharkhand.These are his persol views.)