Radical Uncertainty, is the title of a book co-authored by Mervyn King, former Governor of the Bank of England and currently member of the House of Lords in the UK. As Britain deals with the aftermath of the tax reforms fiasco and a change in leadership, it is not the only country in the world grappling with developments in the economy, leading to “decision-making for an unknowable future”.

Across the globe, unprecedented macro-level changes are taking place in all major economies, flummoxing policymakers. India’s position, however, appears to be relatively better. It is more confident of tackling problems because the macros including good forex reserves, a stable financial sector, growth trends and political stability provide comfort.

But now is the time to rethink our development agenda for the next 25 years. And as it appears that the “economics question papers set for different countries are different” the answers too have to be endogenous, suiting each county’s civilisational ethos.

A relevant contribution to the discourse has been made by S Gurumurthy, a home-spun intellectual and the Editor of Tughlaq. He recently underlined the need for an Indian Way.

The West-led model of free-market economics has failed in ensuring sustainable growth, he said. The US has now become hostage to commodity price increases. As a superpower, its relevance is under threat. Its levers of control over the international financial structure and the power of sanctions have failed to challenge Russia and the centre of gravity of economic power is slowly but surely getting diffused. It is advantage India, China and a few other non G-7 countries, according to Gurumurthy.

Five matrices

In this context it becomes important to fashion a growth model taking into account Indian traditional values. There are at least five fundamental value matrices which to be considered, he says. First is the need to build on domestic savings as the prime instrument of our growth. While foreign money may come, savings has been a civilisational strength of the nation and should not be ignored by spending-led demand-induced growth. In other words, the savings-investment balance needs to be nurtured and maintained and a current account deficit to finance the savings-investments gap will not be a desirable pursuit.

Second, the country’s growth needs to be sustained by domestic demand. While linkages with the outside world through trade (exports/imports) will be an inevitability, it cannot be the fulcrum for our growth. This is especially true as the Russia-Ukraine war and its aftermath have undermined the “trust” element in the global financial order — even a financial transaction system like SWIFT has been used as part of the “sanctions” against Russia.

Third, such an approach would fit in with the government’s push towards Atmanirbhar India. In the post-Ukraine world order, the problems posed by supply-chain disruptions have been brought home with telling effect. Emerging powers which look for sustainable growth have to necessarily adopt self-reliance as a doctrine.

Fourth, there is a need for overhauling our educational system to rebuild national self-confidence. Models like family/community networks which lead to business clusters (examples being Tirupur, Morvi, Ludhiana, etc) should be adapted to the changing times.

Lastly, India cannot afford to adopt the totally individualistic development model of the West which places a premium on individual freedom of choice. Gurumurthy also raised the issue of what the consequences would be if families all over India were to disown the responsibility towards elders including parents, which is a foundational aspect of the Indian ethos. State welfare has its limitations, and no nation can create structures to replace what the family as a unit can do.

The writer is a commentator on banking and finance

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