Market Structures and Governance Support Measures
By: Amit Bhushan Date: 22nd Jan 2014
One of the least discussed and debated aspect in India with its so claimed robust democracy is our industry & market structures, their sustenance criteria and suitability to with reference to needs of our people. We have followed the industry and market structures prevalent in West or as kept them as promoted largely by the British. Take for example our robust Film industry. Its production as well as distribution is largely a replica of the British. This is even as their ability to reach out to large swathes of our people remains in doubt as it hasn’t happened over the period so far. The industry in the West more particularly the USA has to compete with various competitive forces like technology changes or Volumes of Capital behind Fresh ideas which invariably keeps on changing industry structure helping new messiahs to rise. Accordingly you witness, the new economy players lording over ‘paper wealth or valuations’ and the old economy struggling to adjust to these new challenges. The government in the West and political leaders are generally supportive or at least maintain ambivalence with nuanced support for these new players as stifling such entrepreneurs is politically even more costly than protecting the old economy behemoths (where consumers, community & interest groups and tax payers groups are quite vocal & political leaders are under pressure to be even handed).
In India, the entrepreneurs face capital/credit constraints and cultural constraints along side massive risk for failure & social stigma. The political leadership happily opts to mingle with ‘established’ industry players while playing lip service to consumers, community & interest groups, and tax payers; maintaining a policy for ensuring smooth credit supplies for such ‘established’ players irrespective of questionable bankability seems to be a part of the ‘good governance’ definition for most parties and leaders. The justification for such policies come partly from society itself where the community members of business community find relatively better opportunities for nurturing their ideas and support for nascent businesses; and government backed banker’s credit supply policies fulfill the remaining part. The stifling of voices of consumers, environmentalists and tax payers etc. who do not find issues being addressed; is the added additional support for established businesses ensured by the leaders. The result is a democracy without any support for migration of ordinary people in economic hierarchy though there may be a few exceptions. It may be noted that wherever we may have such exceptions, those who have risen from the ranks of poor without political support and with extra-legal dealings will be still quite a minority. The weak judiciary which is unable to prosecute even criminals on timely basis, is unable to cope up with social, environmental or consumer issues or to ensure any broader reforms which they are anyways supposed to keep away from.
While the society cannot shake away from its share of responsibility for continuation of the situation, however it is only recently that we see quest for social mobility across a spectrum of initiatives including politics and other economic activities. The failure of leaders in this regards has been lack of focus on developing a rule based market structure which provides a level playing field as well as even handed governance on back of smoothly functioning regulatory structure (which remains biased towards the economically dominant). The focus of leadership is on championing projects under their tutelage in order to satisfy ‘their constituency’ and in the process maintain the social order and biases rather than challenging the ‘old school’ even as they continue to sing paeans about the development of the West compared to our own society. In fact when such structures are challenged then the leadership response is to defend such structures citing the great traditions, rich history, culture and values or even economic circumstances, labour welfare; rather than the nuanced support or ambivalence along side a smooth flow of Capital/credit as in the West.
We are yet to see any movement to improve services for the ordinary people like government communications in people’s own language. In fact the language bogey takes this as an opportunity to raise a stick on private enterprise language or even to run down Business Process Outsourcers or IT industry while the babus, senior offices, judiciary officials continue to function as per their comfort (in languages they comfortable with) rather than comfort of the larger public. Likewise we do not many banks having ability to process transactions in client’s language or even other businesses making attempts to interact with customer’s in their own language even though we claim to be super power in IT driven services. The focus on Agriculture leads to providing subsidy to fertilizer companies for cheap fertilizers and to seed companies for cheaper seeds or else we start gimmickry of Support prices for produce which actually yields very little support for the most needy while the better off continues to benefit much more and political regime change remains clueless in even recognizing issues while making claims to ‘targeted subsidy’. We therefore are witnessing is process of continuation of the changing polity till these real issues are addressed, though pundits in commercial news media may continue to have there take.
By: Amit Bhushan Date: 22nd Jan 2014
One of the least discussed and debated aspect in India with its so claimed robust democracy is our industry & market structures, their sustenance criteria and suitability to with reference to needs of our people. We have followed the industry and market structures prevalent in West or as kept them as promoted largely by the British. Take for example our robust Film industry. Its production as well as distribution is largely a replica of the British. This is even as their ability to reach out to large swathes of our people remains in doubt as it hasn’t happened over the period so far. The industry in the West more particularly the USA has to compete with various competitive forces like technology changes or Volumes of Capital behind Fresh ideas which invariably keeps on changing industry structure helping new messiahs to rise. Accordingly you witness, the new economy players lording over ‘paper wealth or valuations’ and the old economy struggling to adjust to these new challenges. The government in the West and political leaders are generally supportive or at least maintain ambivalence with nuanced support for these new players as stifling such entrepreneurs is politically even more costly than protecting the old economy behemoths (where consumers, community & interest groups and tax payers groups are quite vocal & political leaders are under pressure to be even handed).
In India, the entrepreneurs face capital/credit constraints and cultural constraints along side massive risk for failure & social stigma. The political leadership happily opts to mingle with ‘established’ industry players while playing lip service to consumers, community & interest groups, and tax payers; maintaining a policy for ensuring smooth credit supplies for such ‘established’ players irrespective of questionable bankability seems to be a part of the ‘good governance’ definition for most parties and leaders. The justification for such policies come partly from society itself where the community members of business community find relatively better opportunities for nurturing their ideas and support for nascent businesses; and government backed banker’s credit supply policies fulfill the remaining part. The stifling of voices of consumers, environmentalists and tax payers etc. who do not find issues being addressed; is the added additional support for established businesses ensured by the leaders. The result is a democracy without any support for migration of ordinary people in economic hierarchy though there may be a few exceptions. It may be noted that wherever we may have such exceptions, those who have risen from the ranks of poor without political support and with extra-legal dealings will be still quite a minority. The weak judiciary which is unable to prosecute even criminals on timely basis, is unable to cope up with social, environmental or consumer issues or to ensure any broader reforms which they are anyways supposed to keep away from.
While the society cannot shake away from its share of responsibility for continuation of the situation, however it is only recently that we see quest for social mobility across a spectrum of initiatives including politics and other economic activities. The failure of leaders in this regards has been lack of focus on developing a rule based market structure which provides a level playing field as well as even handed governance on back of smoothly functioning regulatory structure (which remains biased towards the economically dominant). The focus of leadership is on championing projects under their tutelage in order to satisfy ‘their constituency’ and in the process maintain the social order and biases rather than challenging the ‘old school’ even as they continue to sing paeans about the development of the West compared to our own society. In fact when such structures are challenged then the leadership response is to defend such structures citing the great traditions, rich history, culture and values or even economic circumstances, labour welfare; rather than the nuanced support or ambivalence along side a smooth flow of Capital/credit as in the West.
We are yet to see any movement to improve services for the ordinary people like government communications in people’s own language. In fact the language bogey takes this as an opportunity to raise a stick on private enterprise language or even to run down Business Process Outsourcers or IT industry while the babus, senior offices, judiciary officials continue to function as per their comfort (in languages they comfortable with) rather than comfort of the larger public. Likewise we do not many banks having ability to process transactions in client’s language or even other businesses making attempts to interact with customer’s in their own language even though we claim to be super power in IT driven services. The focus on Agriculture leads to providing subsidy to fertilizer companies for cheap fertilizers and to seed companies for cheaper seeds or else we start gimmickry of Support prices for produce which actually yields very little support for the most needy while the better off continues to benefit much more and political regime change remains clueless in even recognizing issues while making claims to ‘targeted subsidy’. We therefore are witnessing is process of continuation of the changing polity till these real issues are addressed, though pundits in commercial news media may continue to have there take.