Harnessing the power triad

How can India hold its own during a time of strong geopolitical winds? There are many opinions on how we should be resilient.

However, the interest in this question has so far provoked only a uniform response. Most opinions point to three options – we should use this as an opportunity to reexamine our global friendships and make new alliances, initiate another round of reforms to liberalise the economy, and loosen the public purse and lending rules to boost domestic consumption. Trim the fat and tone up muscle, as former NITI Aayog head Amitabh Kant put it.

These things might help, and some proposed reforms were probably necessary even before we were provoked by Trump. But there is something else we can do, which would be far more powerful than technical and regulatory fixes.

For too long, we have lived with the idea that when it comes to development, the State must lead, and market and society must align or follow. It is quite easy to see that Nehru made this more or less explicit in his time at the helm, but even decades later, we continue with the framework. Some might even say that things have become more asymmetrically skewed.

Compounding this, we have endured the misconception that while national and state governments are important, local governance is just an administrative matter. Until the early 1990s, we didn’t even have a legal framework for local councils in most parts of the country, and since then, we have mostly not implemented the framework. Many states don’t even bother to hold local elections on time. All this despite the fact that people care quite about their immediate surroundings and public services.

These twin missteps have greatly slowed development. Critically, we are more vulnerable to the uncertainties of geopolitics. We have put too much faith in the centralised, top-down State, instead of giving ourselves a range of options. That has left us no choice but to embrace the flag and play victim, instead of looking at those who made this mistake.

In contrast, many of the countries we compete with have figured out how to leverage State, market and society into a concerted swarm. Some of them do it by force, like China does, but most others do it by letting each of these spheres be all it can be. On the other hand, the Russias and the Turkeys of the world are clearly sidelining the capacities of society by force and the market through cronyism. The net result is a reduced capacity to keep up with nations that harness the power of all three.

We watch with mirth and scorn when liberal talk show hosts blast Trump, sometimes in the harshest language laced with profanity, or when Elon Musk, after disagreeing with him publicly, threatened to oppose his party in the next election. We are relieved when judges around that country stall the US President’s oddball executive decisions. We even hope that such opposition might eventually rein him in. But we rarely pause to ask if such things are possible in India.

The Indian situation is not as extreme as that of Russia or Turkey, but we’re also not actively promoting a peer relationship between State, market and society. If we choose to do that now, it will signal confidence about the future by a method that invites more and more people to decide and steer it. There really is strength in numbers. We just have to believe that.

Merely tweaking the business environment will not produce such an equal relationship. What the State giveth, it can also take away. Or just dilute – it is also noteworthy that the drumbeat of Ease of Doing Business has not meant much to the majority of businesses. Nor has there ever been any commitment to improving the Ease of Citizens Engaging with Government. There’s a lesson in that for all those joining the reform chorus.