Fireflies are rising
Reforms ought to be directed towards enabling more entrepreneurs and innovators.
Recently, a European business leader asked me a question. How come India's economy continues to grow at around nine per cent a year even though the government has so far not implemented most of the reforms that economists and foreign business leaders have recommended as essential for the economy to grow? Where, then, is the energy for India's growth coming from, he asked. "It is coming from India's fireflies," I said. That intrigued him, and he arranged a meeting of European business leaders in which I presented the scenarios of India that were developed some years ago, based on an analysis of forces shaping India's growth. These forces were described to readers of Business Today in January 2005, in an article captioned A Nation of Fireflies (http://bit.ly/mairainbt).
The validity of those scenarios is borne out by the progress of the country today. The scenarios were comprised of four models of leadership and development that are operating simultaneously in the country. One is 'Buffaloes Wallowing (While Children are Waiting)'. In this model, progress is expected to be brought about by experts and leaders at the top. This is the traditional model for managing large systems.
However, when the leaders are unable to agree among themselves, there is no 'reform' and no progress. Meanwhile, the people are waiting for results. In India's case, education and health of our children must improve rapidly, and productive jobs must be created for them, for the county to realise its 'demographic dividend'.
Another model, vigorously operating in India now, is 'Peacocks Strutting (While Little Birds are Scrambling)'. The opening of the market and removal of government controls has enabled many people to become richer, and some very rich indeed! However, many do not have access to opportunities offered by the market because they do not have education, or access to finance.
Reacting to inefficiencies in government schemes, and to increasing corruption and crony capitalism, another model of leadership is spreading across parts of the country. This one forces change by violence. Described as 'Wolves (and Tigers) Prowling', it is seen in extremism-affected districts.
In 2005, the World Economic Forum (WEF) used these four models of change to construct three scenarios of the future of India. Economic forecasters in Britain and India then estimated what the growth prospects for the country would be under these scenarios. The first scenario was described as 'Atakta Bharat' (or Hampered India, based on the model of 'Buffaloes Wallowing') in which growth is hampered by the sclerosis in governance. In this scenario, according to the forecasters, GDP growth could decline to six or seven per cent. The second was called 'Bollyworld'. In this scenario of insufficiently inclusive growth, 'Peacocks Strut', but 'Wolves Prowl' too. This reflects India's present reality. Like in a Bollywood movie, glamour as well as violence is the daily fare of news. It may be fun, but it will end. In this scenario, growth will cross nine per cent for a while but as internal contradictions and tensions increase, it will taper down, was the analysts' verdict.
The WEF's third scenario was called 'Pahale India' or India first. The growing force for change in this one is 'Fireflies Arising'. In this scenario, growth would cross 10 per cent and sustain at these levels. The 'fireflies' are entrepreneurs and local leaders of change. They are women in self-help groups across the country, drawing women into the mainstream. They are innovators finding frugal solutions to meet the needs of masses of poorer people. They are self-employed vendors, conducting business over the ubiquitous mobile phone.
In the past few years, tens of thousands of SMEs, or small and medium enterprises, have been vying to get the 'Best SME' awards sponsored by some private sector banks. The SMEs have created many times more jobs than the organised manufacturing sector in the past few years. Almost 40 per cent of India's manufacturing exports are from the SME sector.
In Himachal Pradesh, the sight of girls in school uniforms scrambling up the hills, and in Bihar of girls riding bicycles given by government for going to school, are images of a changing India. All these are the millions of little fireflies whose energy is boosting India's economy.
The explanation to the European business leaders was that both the 'peacocks' and the 'fireflies' are contributing to the country's growth. The business media celebrates the peacocks, who are becoming well known in the world. But the fireflies are contributing much more to the country's growth than we give them credit for. To further boost and sustain India's all-round growth, reforms ought to be directed towards enabling more fireflies to light up, and to spread around and scale up innovations. People, right down to the bottom of the pyramid, must be active participants in the processes of governance and economic growth.
They should not be included merely as passive beneficiaries of state hand-outs and corporate charity. State hand-outs make people beholden to politicians, which politicians like. And corporate charity makes the givers feel good. But people want to stand on their own feet. They want opportunities to earn. They want to be empowered. Therefore, rather than dispense relief through palliative schemes, reforms must create conditions for citizens to participate fully in the economy, through financial inclusion, vocational training, right to information, etc.
Leaders at the top should not wallow any more. The country needs reforms to end the 'Bollyworld' story of excessive greed and glamour, and corruption and corrosion of values. More urgent than financial sector reforms now are police reforms, judicial reforms, political funding reforms, and regulatory reforms.
The stalled processes of devolution of powers to local urban and rural bodies must be unclogged and expedited. The poor are the scrambling sparrows and squirrels, while the peacocks strut and wolves prowl. Bollyworld must turn into Pahale India for India's growth to be inclusive and sustainable. Let an India well known for its Buffaloes, Peacocks, and Tigers become best known for its Fireflies that transform the country.
The validity of those scenarios is borne out by the progress of the country today. The scenarios were comprised of four models of leadership and development that are operating simultaneously in the country. One is 'Buffaloes Wallowing (While Children are Waiting)'. In this model, progress is expected to be brought about by experts and leaders at the top. This is the traditional model for managing large systems.
However, when the leaders are unable to agree among themselves, there is no 'reform' and no progress. Meanwhile, the people are waiting for results. In India's case, education and health of our children must improve rapidly, and productive jobs must be created for them, for the county to realise its 'demographic dividend'.
Another model, vigorously operating in India now, is 'Peacocks Strutting (While Little Birds are Scrambling)'. The opening of the market and removal of government controls has enabled many people to become richer, and some very rich indeed! However, many do not have access to opportunities offered by the market because they do not have education, or access to finance.
Reacting to inefficiencies in government schemes, and to increasing corruption and crony capitalism, another model of leadership is spreading across parts of the country. This one forces change by violence. Described as 'Wolves (and Tigers) Prowling', it is seen in extremism-affected districts.
In 2005, the World Economic Forum (WEF) used these four models of change to construct three scenarios of the future of India. Economic forecasters in Britain and India then estimated what the growth prospects for the country would be under these scenarios. The first scenario was described as 'Atakta Bharat' (or Hampered India, based on the model of 'Buffaloes Wallowing') in which growth is hampered by the sclerosis in governance. In this scenario, according to the forecasters, GDP growth could decline to six or seven per cent. The second was called 'Bollyworld'. In this scenario of insufficiently inclusive growth, 'Peacocks Strut', but 'Wolves Prowl' too. This reflects India's present reality. Like in a Bollywood movie, glamour as well as violence is the daily fare of news. It may be fun, but it will end. In this scenario, growth will cross nine per cent for a while but as internal contradictions and tensions increase, it will taper down, was the analysts' verdict.
The WEF's third scenario was called 'Pahale India' or India first. The growing force for change in this one is 'Fireflies Arising'. In this scenario, growth would cross 10 per cent and sustain at these levels. The 'fireflies' are entrepreneurs and local leaders of change. They are women in self-help groups across the country, drawing women into the mainstream. They are innovators finding frugal solutions to meet the needs of masses of poorer people. They are self-employed vendors, conducting business over the ubiquitous mobile phone.
 People want to stand on their own feet. They want opportunities to earn. They want to be empowered |
In Himachal Pradesh, the sight of girls in school uniforms scrambling up the hills, and in Bihar of girls riding bicycles given by government for going to school, are images of a changing India. All these are the millions of little fireflies whose energy is boosting India's economy.
The explanation to the European business leaders was that both the 'peacocks' and the 'fireflies' are contributing to the country's growth. The business media celebrates the peacocks, who are becoming well known in the world. But the fireflies are contributing much more to the country's growth than we give them credit for. To further boost and sustain India's all-round growth, reforms ought to be directed towards enabling more fireflies to light up, and to spread around and scale up innovations. People, right down to the bottom of the pyramid, must be active participants in the processes of governance and economic growth.
They should not be included merely as passive beneficiaries of state hand-outs and corporate charity. State hand-outs make people beholden to politicians, which politicians like. And corporate charity makes the givers feel good. But people want to stand on their own feet. They want opportunities to earn. They want to be empowered. Therefore, rather than dispense relief through palliative schemes, reforms must create conditions for citizens to participate fully in the economy, through financial inclusion, vocational training, right to information, etc.
Leaders at the top should not wallow any more. The country needs reforms to end the 'Bollyworld' story of excessive greed and glamour, and corruption and corrosion of values. More urgent than financial sector reforms now are police reforms, judicial reforms, political funding reforms, and regulatory reforms.
The stalled processes of devolution of powers to local urban and rural bodies must be unclogged and expedited. The poor are the scrambling sparrows and squirrels, while the peacocks strut and wolves prowl. Bollyworld must turn into Pahale India for India's growth to be inclusive and sustainable. Let an India well known for its Buffaloes, Peacocks, and Tigers become best known for its Fireflies that transform the country.
