The distributed growth model . A keynote delivered on the invite of the World Bank in Algeria in June 2018
The distributed growth model . A keynote delivered on the invite of the World Bank in Algeria in June 2018
Innovation as a basic instinct for India to be an ‘Innovation Capital’
The recently released ‘GE Global Innovation Barometer 2018’ (GIB), is a good reference document. As always, being published by a corporate, it will have its share of ‘business interests’ at its core to ensure that the government and corporates think in a manner that helps the businesses, but a few points of the report are really important!!
As a student and a practitioner of innovation, I write this article to clear some basics about innovation
According to GIB,
When India is trying to grow to a 10 trillion-dollar economy over a decade, we cannot ignore the above facts. India has to become a pioneering leader in innovation to have a sustainable growth and become a strong economy as we cannot achieve our goals without innovation. The government needs to take the lead for innovation! Instead of MNCs driving innovation in India, it must be the MSMEs which should be majorly driving it.
In 2016, the World Bank said that, 69 % of the jobs in India are under threat due to automation, and that’s a part of the natural evolution and maturity; but another fact that we should remember is, that if India innovates in MSME, agriculture, education, health, smart cities, tourism and services sector, we will create more jobs than we can ever think of. Every household can have a decent job in the next 10 years and for that, we need the ‘India Innovation Mission’. Innovation is not prescriptive i.e. we cannot issue a G.O (Government Order) that India will innovate from tomorrow.
Let’s understand some basics about innovation:
India presents a unique opportunity to innovative in almost every sector. Everything in India that can be touched has the potential to be innovated and transformed. Since we have huge population to cater to, and we have resource crunch in terms of finances and infrastructure; the only way India can survive is by innovating, and the challenges in India present a fertile ground, making India a melting pot for innovation.
So, how do we go about making India the innovation capital? India needs to set up the India Innovation Mission (I2 M), under which, we address the following;
A lot to learn from the USA: I have travelled most of the world, and I observed that USA remains a leader in innovation, and we can learn a lot from the US. I arrived at the following six commandments for making an organization/institution/ country innovative;
Innovation cannot be enforced externally and has to be inculcated as an ‘intrinsic quality’, facilitated by a conducive ‘ecosystem’, with ‘planned efforts’. In India, under the I2 M, we need to bring a massive and planned change
More so, with PM Modi’s vision of a New India , India will have to become the Innovation capital of the world and Innovation has to be the basic instinct . The same principles apply to every developed and developing country to become an innovative country.
We should remember; Earlier, we innovated when we got into a problem, now if we don’t innovate, we will get into a problem.
Prof. Rajendra Pratap Gupta holds a master degree in innovation & change management, is a Distinguished Professor of Innovation @ a Central University
“Distributed Growth model” is the need of the hour. Growth alone will not suffice.
India’s budget preparation is in the final leg and it will be unveiled soon. Last two budgets have put the focus correctly; by giving thrust to rural development, agriculture and infrastructure, but the bureaucratic red-tape has been an impediment. We have a long way to go and we need to evolve a new model – the ‘Distributed growth model’. All these decades, we have chased the ever-elusive “double digit” growth, but we are not going to achieve that with the current approach.
“Too many economists spoil the budget”. We had a world-class economist running the country for a decade, we had the best economists running the RBI and the erstwhile Planning Commission, and we still could not achieve double digit growth, and floundered. So, it’s time to have a fresh look at our economic approach. A mere change in the interest rates have not done anything, and will not. Economy is not about tax collections, interest rates or money supply alone, it is much more. ‘Text book economists’ do not understand the country’s complexities, and neither they do good to the economy, or to economics. Also, the general perception is, that only 3 % pay taxes. Yes, 3 percent may be paying direct taxes but every citizen of India pays taxes indirectly when s/he purchases a product from the market. With GST implemented, all the more! So, to use this reason of low tax payer’s base is wrongfully placed.
It is time we considered a model that leads to growth which percolates downwards and spreads wide, that what I call as, ‘Distributed Growth model”. How do we make it happen?
Let’s look at the following data;
Health & Education
Recent study had revealed that 50 million go below poverty line due to healthcare costs. Also, it is a known fact that most of the ‘educated’ are not ‘skilled enough’ to do the jobs that the country needs as its economy evolves. Hence, education and health needs investment. If the workforce is not healthy and competent, how can the economy be strong? In fact, anecdotally (since I am not an economist by training), I would take the liberty of stating that GDP growth would be equal to the GDP spends on education, and health! Our healthcare system and education system is in shambles and it needs massive investment. For achieving ‘distributed growth model’, investment in health and education are a precondition.
Strongest thing about India’s economy is ‘1.34 billion consumers’, who run the consumption story (growth engine) for the country, and we add about 18 million new consumers every year. With more opportunities for consumers from Agriculture, MSME and Tourism; and assuring them with quality health and education; we will fire the economy to grow 10 percent a year, and that too, sustainably.
I see foreign trained economist keep warning India about the Fiscal discipline. If the investments are going in areas outlined above and not in opex, we must not worry. Even if the fiscal deficit reaches 5 percent, investments in these sectors will payback, and our economy will be amongst the 3rd largest in a decade. USA is a case in point. It is too big an economy and though its fiscal arithmetic is baffling, does it worry about its ratings or deficit!!?
In oil rich Gulf countries, GDP and GDP per capita appears fantastic as statistics, but since the oil fields are in the hands of a few royal families, the wealth gets concentrated in a few hands. Recently, the annual Oxfam survey has found that the wealthiest 1 % Indians garnered 73 % of the wealth created in 2017. This is due to the ‘Concentrated Growth model’. So growth alone with not suffice , and we need ‘distributed growth’. In the “Distributed Growth” model lies the answer. India should move to this model before the gap between ‘have’s’ and ‘have nots’ increases more!
What the policy makers must aim is on enhancing the income and money in the hands of consumers by creating more avenues to work, earn and spend. This will happen if we invest in agriculture and value addition in allied agro based industries, MSME, tourism, infra, health & education.
Lastly, let us not forget, electorate will evaluate Modi government’s performance on health, education, employment, electricity and inflation. These hold the key to a massive win in 2019.
Good economics is long term politics!
Rajendra Pratap Gupta is a leading public policy expert. Views are personal
Hon’ble Prime Minister Modi,
Your time is very valuable and hence instead of seeking a personal appointment, I am writing this letter to you.
Peter Huntsman, CEO, Huntsman Corporation, US, said at the recently concluded ‘Vibrant Gujarat’ summit, which was inaugurated by prime minister Narendra Modi, that “Mr. PM, you visited our country in June and there are many of us who wished you would have stayed and taken over leadership of our country”.
This is the first time in history that any head of state would have received such a compliment and it is not easy to come by, and that too, for a developing country! This speaks volumes of how much the world believes in your exemplary leadership and seeks your guidance as a Vishwa Guru! I have always said that you have brought a lot of trust and respect to our country in the short span that you have been at the helm, and I am sure, what we have seen till now, is just 10 per cent of what you can do, and that you will totally transform the country over the next 10 years.
The earlier governments kept singing the slogan of ‘Garibi Hatao’ for decades, but, actually, they neither had the will nor the vision to do so. You have clearly shown that your focus is clear and you have clearly articulated the path to Garibi Hatao by your vision to provide water, electricity, house (with toilet) and access to every Indian by 2022. Moreover, the last budget set the direction for empowered citizens and developed India by focusing on rural development, agriculture and infrastructure. Rather than promising to people, you have decided to work hard and deliver, and this had been missing in the country and because of which, the people have lost confidence in politics and politicians both. You have a big responsibility of not just running the country as our most revered Prime Minister but a bigger goal to bring back the trust in politics and politicians
We have recently seen that you stand for your principles. Demonetization and the surgical strikes have proven that you will not hesitate to take tough decisions in the interest of the poor and to safeguard the nation. A few in the opposition have talked against demonetization. Post demonetization, we are clear about where the money is! Else, the so called world class economists talked about double digit growth and fooled us for years without even knowing how much money was in the system and where! Now other countries are considering to implement demonetization.
While you have initiated some big changes and more are likely to follow post the budget and the assembly elections, it would be pertinent here to state that the biggest drag on Rajiv Gandhi and Dr. Manmohan Singh Government was the same bureaucracy that we have inherited and which failed them, and it will fail this government as well if we don’t get rid of this imperial legacy – bureaucracy. We are beholden to bureaucracy as if, without them, the government cannot function, but the history proves that bureaucracy has ensured a status quo for this nation and worked on the principle of ‘I, me and myself’. Actually, the current bureaucratic set up is a bottleneck for fostering innovation and enterprise.
Let me quote;
“Rajiv wanted to revolutionize the bureaucracy and make things more efficient”. –Mark Tully in an interview
“You have sought a change in the manner in which this country is run and reform of administration to improve the quality of services will be our immediate priority”. Dr. Manmohan Singh, June 2004
Some of these leaders identified the real problem in India for implementing reforms as the failure of the bureaucracy to implement, and which let them down. I have written about the need and the path to transform the bureaucracy.
Also, am submitting the following for your kind consideration;
* ACR system be changed to CPR (Comprehensive Performance Review, wherein, 50 % of the appraisal depends on the individual performance, 25 % on the department’s / Ministry’s performance and 25% on the overall government’s performance).
* All posts, starting with the Joint Secretary, to be on a 5-year contract, based on annual comprehensive performance review, linked to implementation of the budget announcements and yearly plans. No bureaucrat be appointed as Secretary who has less than a year to retire & a bureaucrat at the level of Secretary have a fixed tenure based on yearly comprehensive assessment
* Start the lateral entry and compare the performance of career bureaucrats and professionals inducted in the government
* Sack the non-performing secretaries to send a strong message.
* This reform cannot be left to bureaucrats, as they will never let it happen. Also, if this is not done, it will be the biggest setback to the Modi Administration and will cost dearly.
In the USA, key officials come with the incoming President and are aligned to his vision. Also, the USA, U.K. and New Zealand governments have transformed bureaucracy to make their nations innovative and growth oriented.
Jairam Ramesh was bang on when he said, ‘the responsibility for bringing in reforms and change cannot be outsourced to bureaucrats and technocrats, as reforms, in essence, is a political enterprise”.
In the past, the political leadership could never deliver on getting rid of bureaucracy, despite the identification of the problem and only made statements from time to time to reform the bureaucracy. We are hopeful that, with a leader like Modi at the helm, we can now see this major reform becoming a reality, which will unlock the true potential of every Indian, and if this happens, in 2019, you can plan the mission of 400 plus for Lok Sabha.
Rajendra Pratap Gupta
Disclaimer: The views expressed are based on facts and experience and personal
Kill bureaucracy to convert Red tape toRed Carpet
On May 28th, I wrote the article in the ET; ‘Bureaucrat Mukt Bharat (http://blogs.economictimes.indiatimes.com/et-commentary/steel-frame-of-bureaucracy-is-an-obstacle-to-development-its-time-to-rehaul-it/).
On Independence day, we heard the Hon’ble PM saying that his Government’s motto is to reform, perform and transform. Also, on 01st September, Carnegie Endowment for International Peace wrote, “India’s economy has grown rapidly in recent years, but the country’s bureaucratic quality is widely perceived to be either stagnant or in decline”. A former PM had once said about the Indian Civil Service (ICS) , the earlier avatar of IAS; “as neither Indian, nor civil, nor a service.”
I think it is time to re-look at overhauling the bureaucracy, if we wish to realize the vision of Modi’s idea of India
We need speed, we need efficiency and we need effectiveness in our entire chain of command. This is the pre-requisite in realizing the vision of the greatest statesman – Modi.
We have had a mixed bag of experience with the bureaucracy in implementing some of the key announcements from the Hon’ble Prime Minister, and the commitment on budget announcements and schemes. I have the following suggestions;
The reason our bureaucracy fails is because of the following;
So, the time has come when we think out of the box and overhaul this system. Else, in 2019, our biggest failure will be because of the inefficient and unaccountable bureaucracy who will fail to implement Government’s key schemes.
We need to focus on the team approach; ‘One India, One team, one Goal’, that touches and transforms life till the last man standing in the line.
Re-defining the Appraisal System: As of now, we have an appraisal system that looks at ACRs, which only counts for an individual’s performance. If the performance and payment of the bureaucrat was based besides his individual performance (50% weightage) , the performance of his department / ministry (25%weightage) and the overall performance of the Government (25% weightage) , then the bureaucrats would work as a team and give up the siloed approach . So the first change is;
Move from ACR to CPR (Comprehensive Performance Review), which includes
Weightage for each level of review for the Comprehensive Performance Review (CPR) :
Increments, variable pay/ incentives and promotions of officials should be based on CPR
Implementation: Can be in a phased manner ;
Parameters for IPR could be picked up from what is already defined under ACR, but it must be more specific like;
For any of the misses, the weightage be objectively apportioned.
Department’s Performance Review (DPR)
For any of the misses, the weightage be objectively apportioned.
Government Performance Review (GPR)
A part for the GPR be based on actual data / facts, and must be done by an independent government agency (40 percent weightage) and the rest must be based on public perception (60%) ; or it can be made (50 %) of actual assessment by an independent agency and (50 %) by public voting ;
The government works for the citizens, and finally it is the citizens who are the best judge of its performance. Parameters 1-6 above can be objectively judged with data / facts, and others can be subjectively judged by the citizens under Jan Bhagidhari Assessment (JBA) through online voting.
At the end, it is the Government ‘for the people’, so the people must rate the Government on overall performance through public voting, after Government presents its self- appraisals on the points mentioned from 1-6 above.
The voting should be open for 30 days for the public to vote by a missed call from their registered mobile number on a toll free number; (60 % weightage should be assigned to public perception / judgment on performance) and 40 % on self appraisal / independent assessment by the Government.
Major change in bureaucracy is about making it a ‘performance based contractual service’: Also, one reaches the rank of Joint Secretary after a minimum service of 17 years. Joint Secretary is the actual ‘official’ who runs the show for the Government on a day-to-day basis, but if one sees the performance of the Joint Secretary, in a real sense, s/he does not feel accountable to anyone. The reality is, that now they are more driven by authority and administration and less by duty and development.
The biggest bane of bureaucracy is their job security and on one can demote them or remove them. When politicians have to go every five years for their performance review and renewing their term before the electorate, why should the top officials not undergo a review and renew based on their performance? Let us give them job security, but for performers. The Government is serious about a ‘Big Change’, and has to go and seek appraisal from the voters in 2019, but most of the bureaucrats are not as serious. They have been used to seeing government after government for decades. For them, this is all routine office work but for the Government, it is an implementation emergency. This is the only way to bridge the divide and bring about a cultural change for performance, accountability and rewards. Today, only the politicians are accountable but not bureaucrats! And it is time to change and fix the accountability based transparent review process / system.
All officers of the rank of Joint Secretary and above must be put on a 5-year contract, based on their performance review, with a performance based financial incentive for their outstanding work. So, the salary structure should have a fixed pay and a variable component . If they fail to live up to the performance standards (IPR) below 80 % for three years (out of five year term), they must be relieved. Let us not forget that the ‘Best are first to be hired and last to be fired’. So no worry for the best performers, rest should worry about themselves.
Even, Nirmal Kumar Mukarji, the last serving Indian Civil Service (ICS) officer in India who retired as Cabinet Secretary in 1980, as chief guest at the Indian Administrative Service’s 50th Anniversary celebrations 1997, had called for an end to the all-India tenured services.
Also, PS to the Minister is considered an important bureaucrat but he is a junior IAS. (below the rank of Joint Secretary), and hence s/he plays safe dealing with his seniors, as one day he might have to work under them, and the loser in this case always is the Minister. So, we need to consider that the PS to the Minister be a Special Secretary rank .
eOffice & eFile – Files are taking months to move from one table to another . e-Office / eFile concept must be implemented. No file should take more than three weeks and pass more than three levels. If there is a delay of more than a week, the note should be made on the file justifying the reasons for delay
Modi has the intent, the will and the vision and he is working really hard. Will his administrative system be able to catch up? There is a big difference in how the minister and the common man are handled by the bureaucrats. So the first impression here, should not be the last impression! Bureaucracy is slowly putting red tape to the red carpet !
Modi rightly said recently, “We cannot march through the twenty first century with the administrative systems of the nineteenth century”. If we see, we still have ‘Collectors’ in post British India, and this itself shows that the bureaucracy is still in 19th Century! A senior IAS wrote to me, ‘Modi is ahead of time’ and I said ‘ Yes, Modi is definitely ahead of time but unfortunately, the bureaucracy is still in the 19th century’. When Modi was thinking of Planning Commission, he made a profound statement, “Sometime it is better to build a new house than to repair the old one”. May be the same approach is needed for the ‘institution’ called bureaucracy. Do we repair the old house or / and build another one. The transition is critical and we have no time to lose. It needs to start soon and there should be a time bound plan to implement it
Rajendra Pratap Gupta
The world is going digital, and this is not just about changing reading habits , it is also about the changing business landscape . We need to look at this ‘digitization’ more deeply.
On June 5th 2016, we saw the news that, now the Audit Bureau of Circulations (ABC) — an independent body that provides audited newspaper and magazine circulation — is foraying into the measurement of digital properties, to track audience in the online space.This is going to create the biggest shakeup in the media industry. If people are spending more time online, the money will follow there and so, print media will either have to evolve new business models or face crisis of existence. Also, it means that the advertisement spends will now be in the hands of American giants like Google , Facebook etc. This is cause of serious concern .
Let us look at some more facts about how this evolution is taking place
One of the top global magazines;Newsweek, after 80 years, ended its print edition in Dec 2012. This signaled the direction to where the print media is headed about three years ago
Also, Let us take the case of book stores; Barnes & Nobles, Borders and Amazon. Barnes & Nobles was the largest book store in the world in 1997 (19 years ago) and at one time,Barnes and Noble and Borders controlled 25 % of the book market. But now, Barnes & Nobles (which started in 1886-130 years ago), is making losses and the valuations have dropped to USD 719 million. Also, Borders went out of business last year after being in business for 45 years. Amazon which started as a book store in 1994, 22 years ago, is valued at USD 88 billion. The industry went upside down in the past two decades, and we even don’t need a publisher now…. times are changing andthe message is clear .
Changing Role of Media – The Political dimension: Media is now not just a platform, it is a tool If you wish to fight an MLA election in Uttar Pradesh next year, you need to have 25000 followers online to seek an election ticket .
Also, over the past few years, we have seen that the government policies were withdrawn due to the ‘hue and cry’ in social media. So, the online / digital media has a new veto power in politics
Politicians are now reaching out to the audience via twitter and providing relief.The online media is also personalized and interactive, and delivers on the target.This is flipping the power in the hands of the consumer
Social media is very important for politicians as not only,it connects them to their audience, it amplifies their reach, knowledge and impact
Old media could cover news and the new media has the power to create news. This makes it a great tool
My personal experience: How media has changed personally for me? I stopped reading the print newspapers a few months ago,because;
1. During my travels , the news papers would pile up in my study and it was tough to catch up with the unread newspapers
2. With online newspapers ,I can forward ( email ) or save important news
3. I can read when I am traveling and news from any part of the world in any part of the world
4. Also, it is updated live … I don’t have to wait for my newspaper vendor to come late or bring a wet newspaper during rains,and wait for the magazine to come every fortnight or month, when I need and can read the news instantly
5. I can comment and put forth my views. So, the old media is passive media and the new media is active and interactive …. It makes sense to be using new media. Digital media has an edge over the traditional print media
6. Above all, It is free
The new age mediais bottoms up and not top down. You can ‘buy’ the new age media ..‘Trending’ will size you up Also, the new media is smaller and crisper. I don’t have to read the entire news, I can read the headline and go into the content based on my interest
I believe that in the next few years, twitter will become a news-channel or newspaper, and so will your TV transition into live app on phone, or Youtube may make way for multiple TV channels.
The media world will change faster than we can think Media has evolved from being a newsmaker to career maker and a policy maker The flip side of the new media is same as old age media … it is getting over crowded too fast. Luckily, it is asset-light to withstand balance sheet pressures
Now, the ‘virtual’ world Is the ‘real world’, and at this time, digital media is complementing the print media but in the near future, it has the potential to replace it, andwe cannot rule out its progression from prominence to dominance in the next few years Digital is successful because of ‘edge’ and not ‘age’ and those who do not take corrective steps, will face a crisis of relevance and existence both
(Rajendra Pratap Gupta is a leading public policy expert. Views are personal ) –