Sāmatvārtha - Monetary Localism for India that is Singapore and Africa
This piece advocates for ecological harmony, technological innovation, and a comprehensive approach towards sustainable and regenerative urban development.
Sāmatvārtha for the Many Indias
In the previous article - we set the foundations for the mindset that will shape the policies to accelerate into a solarpunk circular economy.
To summarize, we need to embrace ecological harmony, technological productivity, market price discovery, and simpler administrative heuristics to achieve a more open, interoperable, sovereign, federated, modular, inclusive, sustainable, and regenerative future. We need to avoid over-abstraction of novation as well as of micro-management, to avoid the power creep by rent-seekers and control freaks. Throw away the baggage of the fabian-socialist, and reject the subversion of the candy-capitalist. Bring to life this collective vision of a solarpunk indic-futurism by accelerating civilizational progress while nourishing nature and ecology, instead of just exploiting it. A regenerative, embedded economic view of our human interactions. A solarpunk indic-futurism.
With due importance being given to the whole embedded economy, growth shall not spiral out of concerns of ecological and humanitarian exploitation. Therefore, the singular focus on GDP as a metric gets replaced with a holistic basket of opportunity cost signals to achieve those objectives. With a better set of holistic metrics, we can focus on delivering policy prescriptions with clear tenets (or objectives) in mind.
These goals will need the right policy prescriptions and equally crucial change management thereof, and Sāmatvārtha aspires to be the panacea. With this context on the vision and the mission, let’s understand where we stand right now.
India 1-2-3 that is Singapore and Africa
Kishore Biyani’s India 1-2-3 thesis has regained popularity thanks to his recent podcast appearances. To summarize, the reality of consumption patterns in India highlights a crucial segmentation of our economy and growth patterns. Per research by the famed retailer, India can be divided into three broad markets (not countries as some other commentators like to say):
- India-1: Consuming Class
- 30 to 40 Million households; 100-120M people
- Consumes say ~100k items/SKUs in lifetime
- Say anybody who has a domestic help
- Does most of the value-added consumption, and around 60% of the overall consumption portion of India’s GDP
- India-1 is further divided into three markets with following analogies:
- Singapore: 6M people. Family household income >$100k
- Poland: 35-30M people. Family household income >$40k
- Mexico: 70-80M people. Family household income >$20k
2. India-2: Serving Class
- 100 to 120 Million households; 300-400M people
- Consumes say ~10k items/SKUs in lifetime
- Say someone who works as domestic help, driver, watchman, etc.
- Helps India 1 lead a better life
3. India-3: Struggling Class
- The rest; maybe a billion people!
- Consumes say ~1k items/SKUs in lifetime
- Say a small farmer, daily wage earner, etc.
- Makes ends meet via government support; Sub-saharan life
KB suggested the need for India to increase value-added consumption massively to grow. But is this thought compatible with the tenets of Sāmatvārtha, or does it need more color? Is value-added consumption the only way for us to grow? And is it the kind of trickle-up growth that we can deliver or even sustain? Maybe inverting this lens, we can again reach a better framing - that of disposable income - of lack of jobs.
KB also famously said that India-1 doesn’t pay India-2 enough. While I agree with this, it is also a reflection of the job market. Ultimately, it is the equilibrium that has been reached between the India-1 economy and India-2 economy, further complicated by factors such as illegal immigration, social esteem of a job, large informal economy, etc. Without going deeper into what even it means to ‘work’, for now, let’s just accept the fact that the quality (demand), as well as the quantity (supply) of jobs, are nowhere near what they need to be. Further, the disincentives that ‘freebies’ politics create in the labor markets do not help either.
There are some other estimates for India 1-2-3. Back in 2018, there was a sudden discourse in VC circles about Indian startups not building for ‘Bharat’ but only building for ‘India’.
The key point to focus on is how do we think about the economics between these ‘India’, the jobs that are within as well as that connect these different worlds! Some estimates suggest that India needs to create around 100 million jobs in the next decade! Who will create those? The government? Or the entrepreneurs? Well, I for one do not look forward to either the mai-baap fabian-socialists or the trickle-down candy-capitalists. The answer might be somewhere in between those, in self-employment and MSMEs, in monetary and fiscal localism, in Sāmatvārtha. What is needed is the atmosphere and incentives for the enterprising to envision a bigger pie and for the laborious to make it happen!
This jobs and entrepreneurship problem of India-1-2-3 can be retrofitted to our 3 key policies in focus: Taxation, broadly impacting India-1; Welfare, broadly impacting India-3; Urbanism, broadly impacting India-2. It is India-1 whose enterprising zeal will allow technological deflation unlocked by the productivity growth of India-2 to bring to life better opportunities for India-3. Trickle-down economics of jobs - not consumption - as a focus to trickle-up lifestyle for all.
Now while bad taxation policies can hamper the enterprising, bad welfare policies can further disincentivize the marginalized to take the next steps. A simple, reformed Taxation will accelerate India-1 ability to enterprise and innovate so that more people can become part of the India-1. A simple, reformed Welfare policy will ensure the safety net for the marginalized India-3 as well as the risk-takers in India-2 to aim higher. A simple, reformed Urbanism will ensure the basic necessities of life and ecology for all, be India 1-2-3. There is no profound insight here per se, it’s just that we have become so used to over-abstraction and micro-management that we simply rule out the possibility of simpler governing heuristics being effective as well as efficient. If not that, then the excuse becomes that of change management. This is an invisible door that needs to open now!
Eventually, everyone gets an opportunity to trickle up their lifestyle in our circular - more like spiral - economy. It won’t happen if India keeps up with its record of being a land of missed opportunities, certainly not with the latest political chauvinism similar to Lebanon’s Confessionalism in the name of J.A.U.H. Having said that, it is not impossible to achieve Sāmatvārtha, we just have to carefully curate and repeat China’s scale efficiency with Singapore’s policy effectiveness. The aim is to go from India 1-2-3 that is Global South, to Bharat that is Singapore.
Authored by Moberation. Published by Brhat.