A coherent development model for India requires a road map prioritising implementation structures. To prioritise among different possibilities, we need to have a valuation framework. Today, the measure of what is valuable is indicated by prices. However, there are other significant ways of judging value in society.
In her book, The Value of Everything, economist Mariana Mazzucato provides a new lens of imagining value based on social desirability in which she argues that public policy must value visions, processes and institutions that benefit people. India could consider using Mazzucato’s framework on many contemporary issues such as inequality, utilising transformative technology and the role of the State in society.
Combating inequality is important in countries where income levels are higher than in India. Instead, India should value prosperity. It must create an aspiration and opportunity structure conducive to raising income levels.
Half of India’s population earns very low amounts relative to other Brics (Brazil, Russia, India, China, South Africa) economies and developed countries such as the US. In such an economic reality, GoI’s focus on targets such as creating a $5 trillion economy by 2024-25 is aligned to valuing prosperity. India should first focus on economic growth before it begins to focus on redistribution.
According to the United Nations Development Programme’s (UNDP) human development indicators, the top 20 nations have an average gross national per-capita income of $51,787. India’s current gross per-capita national income is $6,353. The nations that value prosperity tend to have healthier and more educated citizens.
Furthermore, there is a correlation of prosperity with other desirable outcomes in society. In Transparency International’s corruption perception index, as well as Sustainable Development Solutions Network’s world happiness index, the best performing nations are all prosperous with high-income levels.
Technology is the greatest disrupter of our times. In times of such flux, it is essential that public policy understand technology’s value. Policy needs to go back to first principles and also become innovative. The Justice A P Shah Committee on data privacy has articulated the idea of first principles that include notice to individuals and consent from users about information collection, purpose limitation of data use for only those functions as has been communicated, security safeguards to be taken by data controller, and accountability measures taken by data controllers.
Policy innovations must ensure that we neither shun nor blindly adopt technologies without analysing them. A recent innovation that stands out is the idea of regulatory sandboxes. A Reserve Bank of India (RBI) working committee defines it as “live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing”. If there is clarity on social benefits from these technologies, its adoption can be structured accordingly.
As for the role of the State, since the 1990s, this has been ambiguous in Indian society. It must be reimagined, redefined and restructured. The State, in Mazzucato’s analysis, creates ‘tilts’ towards those objectives and outcomes that are valuable to society. John Maynard Keynes had also argued that governments should not ‘do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all’.
The State is valuable, in itself, for its exclusive functions, and also because it is a co-creator of value in society along with the private sector. The exclusive function that it should develop capabilities for is fixing market failures — the inefficient distribution of goods and services by the free market. This would involve curbing monopolies to prevent market distortion and manipulation, fixing information asymmetries to empower people by creating strong accountability mechanisms, minimising negative externalities such as pollution to improve quality of life, and providing for public goods such as education, healthcare, and law and order.
As co-creator of value in society, the State also invests in projects that are risky endeavours, such as space missions, ensuring that prices aren’t a hindrance for access to products such as medicines and vaccination. Finally, the State ensures security for its citizens.
It’s time to appreciate that the value of what is deemed valuable cannot be limited. It is not just important, but imperative, to acknowledge social desirability as the bedrock of public policy.
The writer works at NITI Aayog