Driving through the roads of Mumbai, it is hard to miss the triumph of the individual spirit. There is only so much road for so many to use. Everyone claims their share, utilising literally every inch that is available. To the newcomer, it would seem chaotic; to some indulgent others like me, it is a brilliant illustration of coexistence under tough conditions. One plods along with fellow humans, independent or irreverent to the other’s chosen mode of transport, speed and efficiency. Everyone is equal when the road determines the maximum moving speed. There is utter selfishness in the bikers’ nudges that happen unexpectedly from both sides of the vehicle. But the overall effect is that everyone moves ahead, cheek by jowl, optimising the space.
The road must take along everyone who manages to fit in, moving ahead alone being the objective. In a city of migrants, egalitarian accommodation is the cultural norm. Individual enterprise shines through as one walks the pavements and shopping areas. Outside the luxury retail store is the cart that sells 20 types of dosas, on a plate lined with paper torn from a roll. Food has long crossed those simple boundaries of convenient ethnic cuisines. Innovation rules in every menu across the city. Paneer fills a taco made with theplas; spicy chillies adorn the pizza; and the humble spaghetti is sautéed in a peanut and lime tadka.
That is the story I want to tell this week. The story of how India moves ahead by sheer grit, determination, and enterprising attitude of individuals. We solve our everyday problems without waiting for the government to come in and do it for us. That transformation over the years is an economic miracle that warrants detailed documentation. From a nation that looked up to the government to set up businesses, build housing colonies and pay secure salaries, we have transformed into a nation that is driven by the all-pervasive entrepreneurial spirit. We want to be in charge of our lives, and a country of a billion-and-a-half people offers the opportunity and freedom to pursue that objective to the best of our ability.
People are no longer sitting and complaining, but getting to do what they visualise as a viable business. It is not the rule of law that defines individual effort and reward. Privilege rules. The inequality of opportunity, access, comfort, and incomes stares one in the face at every turn. One drives through squalor and enters the urban bubble of a living community, where luxury resides. The rich have solved for their needs by carving out their living spaces amidst the dust and grime, unapologetic about the opulence. Everyone carves their slice of the city, dwelling within the realms of their means.
In this potpourri of classes and conditions blooms the fruit of economic endeavour. While one routinely hears stories of small businesses becoming big, these unicorns that list on the stock exchanges too soon after their revenues soar, are not the real big story. There are a million or more small businesses that won’t ever list. They will remain privately owned by their proprietors, who also roll up their sleeves to work through their ideas and implementation. They will innovate and modernise, strategise and specialise, but remain unlisted. What happens then to the capitalistic models of wealth creation and its distribution? What does one do with the little islands that generate revenues and profits which are shared privately? How does one address the ethical questions that arise when individual avarice dominates social well-being? What about the inequalities of income? This model of economic growth is so easy to romanticise.
The overarching assumption is that one pursues an economic enterprise that matches one’s ambition and abilities. The deployment of capital, both monetary and human, varies with the scale and design of the enterprise. As long as taxes are paid and incomes earned circulate in the economy through consumption, all-round economic growth happens. The challenge for policy is to manage the money supply implications of the dominance of private consumption over all other components. That is not all. This economic model is neither the socialistic equal division of benefits that spectacularly failed, nor the pure capitalistic celebration of growth, enterprise value, and ownership incentives. The market for control is non-existent in this small private enterprise model that maximises profits and doesn’t care much about maximising shareholder value. Shareholders and, therefore, the entire edifice of corporate governance does not exist in this model. Lazy investors like you and me who latch on to the shares of a thriving business to earn capital gains will be left by the wayside. These innovative entrepreneurs, who are providing products and services at every nook and corner of the economy, will not seek capital from investors like us. Nor will they let us view their audited accounts to analyse their growth strategies. There is no dividend to earn as passive income, nor is there scope to participate as lenders. There are only producers and consumers.Like any other evolving economic model, this will also make corrections for inefficiencies with respect to costs, property rights, social costs and benefits, as long as these limitations do not hurt the core that holds a self-centered individual who wants to maximise his income. The ‘greed is good’ argument of the capital markets is much hated for celebrating the speculative trader. But this model of self-motivated pursuit of profits has its feet in the real economy.
It engages with the society at its everyday operational level, engaging and paying resources, creating goods and services, and selling to real consumers to generate its profits. It is interesting for this reason. The anarchy of apparent unruly traffic, which also mimics the crowded economy with bustling entrepreneurs claiming their share of space, should evolve into a system that enables a larger number of participants to stay on track and reach their destinations. While it does so, it must inspire and lift those on the sidelines who need health, education and opportunity to participate in the economy. Will this fiercely private and self-driven juggernaut also be benevolent at heart? Will India lift itself out of the scarcity orientation to generosity, fuelled by these many economic successes? I remain an inveterate optimist.
(The author is CHAIRPERSON, CENTRE FOR INVESTMENT EDUCATION AND LEARNING.)