Finance Minister Nirmala Sitharaman in a recent speech stated that the government’s policies will be oriented towards betterment of the poor, farmers, youth and women. These four now constitute the Hindi acronym GYAN (Garib,Youth, Annadata, Nari). In the vote-on-account on February 1, and later in the new government’s Budget, emphasis has to be laid on schemes for these four interest-groups as they also converge in a larger canvas if we look at the county’s development imperatives over the long term.

Given our current growth rates, what appears to be a certainty is that India will be the third largest economy in the world by 2030, behind China and the US in that order. That will bring a leading capitalist nation, a giant “socialist” country and a mixed economy as competing entities for the pole position in the world order though India will be way behind the top two in absolute GDP terms as well as on a per-capita basis.

What then is the economic path that India needs to follow to move ahead?

It is now globally accepted that both the capitalist system based on the principles of Adam Smith and the communist order which harks back to the theories of Karl Marx have inherent drawbacks.

The capitalist system places too much emphasis on the individual, ownership of property and capital, freedom of choice, supported perhaps by Keynesian intervention and the ability of “animal spirits” to deliver growth. Economic equality is not its fundamental concern. Wide disparities exist in countries following the capitalist model.

Adam Smith swore by human endeavour above everything else and prophesied that this would create wealth for all. “The natural effort of every individual to better his own condition…is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human law too often encumbers its operations,” he wrote.

The Communist Manifesto, on the other hand, posits the exploitation of the proletariat by the bourgeoisie as an unalterable result of capitalism and aspires ideally for abolition of private property and finally rule by the proletariat. Apart from the collapse of several countries which tried this model even the example of China proves that our prized democratic system will become the casualty if the Marxian model were ever to dominate our economic approach.

Which brings us to the need for a Third Way of Economics in India’s journey forward. This model has to be essentially Indian or Bharatiya.

A nation is not a mere collection of individuals. There is a common binding factor, an “ethos”. This national consciousness or “Chithi” (soul of this nation) has been discussed by the likes of Swami Vivekananda, Aurobindo and Deendayal Upadhyaya, a leading light of the Bharatiya Jan Sangh.

An economic model based on this Chithi will have “integral humanism” as its basis — it will attempt to see human beings in totality accounting for the entire hierarchy of their needs (Maslowian included) and aspirations. A minimum standard of living will be a birthright or an “entitlement” in this structure. But the additional layer of economic progress, over and above the minimum standards, will be built in accord with our nation’s “Chithi”. Naturally, the four groups forming GYAN have to be uplifted. There are four broad economic pillars which could pivot this architecture.

Livelihood support

“Antyodaya” or the uplift of the poor through livelihood support will have to be the first pillar. We have considerable ground to cover as per the NITI Aayog’s own poverty index. There has to be a combination of free ration, free education and healthcare, direct cash transfer and micro credit with focus on the family/household as a unit with identification of these families and support through local self-governments for decent housing with people’s participation.

The second pillar is “Laghu Udyoga” or small industry and small business/trade which needs to be supported even as there will be onslaught from organised big industry and supermarket chains. This has to be resisted both for economic reasons of local self-employment/jobs for youth and for social reasons as our ethos is structured around mutual dependence among the local provision shop, vegetable seller, milk vendor and households in a virtuous cycle of forward and backward linkages overriding caste/communal divides. These economic linkages are the best insurance against communal/caste divides.

“Sahakar” is the third pillar. The cooperative movement with due cleansing will provide the ballast for a range of economic activities which will enhance farm incomes and improve their position as economic agents. Cooperatives and collectives (including FPOs) will lead to economic heft for farmers and a rightful place for them in the agri value chain up to production of quality products. Amul is a prime example. The formation of a separate Ministry for Cooperation is a step in the right direction as the potential for the cooperative model in even trade and industry is immense if it is well mediated.

And fourthly, ‘Atma Nirbharata”. In a re-globalising world, the re-emergence of nationalism as a material force is a reality, whether we like it or not. To be relevant and be counted in this new emerging order, we cannot afford to be economically dependant on the world outside for essentials at least.

These four pillars can form the underpinning for the economic strategies for an Indian Third Way. The vote-on-account could well be an ideological starting point for this journey forward.

The writer is a commentator on banking and finance