Rajesh Jain

I am continuing by summarising the points that I gave in a talk at the Charcha 2020 event.

The  key question to ask is: Why are some nations rich? Poverty is the default condition in the world. A few countries made the right policy choices to create prosperity for their people. When one studies these nations, we find that the common theme has been policies made on the basis of a set of “prosperity principles” which included some or all of:

• Limited Government
• Non-Discrimination
• Economic Freedom
• Decentralisation
• Property Rights
• Free Markets
• Rule of Law
• Free Trade

Contrast these with the choices we made in India over the past 75 years:

• Limited Big Government
• Non-Discrimination
• Economic Freedom Command and Control
• DeCentralisation
• Property Rights Limited
• Free Markets Price Manipulation
• Rule of Law Delayed Justice
• Free Trade Protectionism

It is not surprising that Indians have not become rich. The pandemic-caused Third World War will be made worse by government actions unless a very different path is chosen. In 1947, India achieved political freedom, but the new political masters continued with British Raj 2.0. Only the skin colour of the rulers changed. And therefore, the outcomes did not change.

What we need is a new path – Nayi Disha – that charts a new course guided by the prosperity principle I outlined previously. India needs to be set free from the clutches of the government (politicians and bureaucrats).

At times like these, we must remember Daniel Burhnam’s words: “Make no little plans. They have no magic to stir men’s blood…Make big plans; aim high in hope and work.”

This where Mission 10-20-30 comes in.

Tomorrow: India’s Mission 10-20-30 (Part 7)

I spoke on May 15 at The Nudge Foundation’s Charcha 2020 event in a panel on public wealth organised by the Centre for Civil Society. My talk was entitled “Mission 10-20-30: The Nayi Disha for Prosperity.” It built on the ideas I have outlined on the blog in the past month, and expanded on them.

I started by outlining the crisis we face and the importance of thinking differently:

• We are in the midst of The Third World War. The pandemic started it, and actions by governments are going to worsen it. As happens in a war, we are going to see immense economic destruction and the poor are going to bear the brunt of it.
• India has also been hugely impacted. We are seeing falling incomes, rising job losses and failing enterprises. Migrants who came to the cities in search of betterment of their lives have become internally displaced persons. As a poor nation, India faces immense humanitarian and economic crises.
• At a time like this, it is good to keep in mind Milton Friedman’s quote: “Only a crisis-actual or perceived-produces real change. When the crisis occurs, the actions that are taken depend on the ideas that are lying around.” What we have to do is to bring forth new ideas that can perhaps persuade the policy-makers to make the right decisions.
• India has a choice between two futures – one in which the government is everything, and the other in which we (the people) choose our own destiny. This is India’s Mao or Deng moment. Mao pushed the Chinese people down the road to serfdom and starved over 40 million of his fellow Chinese. Deng’s policies lifted hundreds of millions of Chinese out of poverty and set them on the path to prosperity. What will India do? Continue with policies which have resulted in “perpetually planned poverty” or change the rules so that we can achieve different outcomes?

Tomorrow: India’s Mission 10-20-30 (Part 6)

Mission 10-20-30 is about creating 10 crore new jobs in 20 months with a minimum monthly income of Rs 30,000.

In the near-term, job losses are inevitable. But we can start taking steps now to build the New India from the wreckage of the Third World War unleashed by the virus. Without jobs, there are no incomes. Without incomes, there will be starvation deaths – because no government will have the resources and reach to save every impacted family. That is why we need to think positive. Once we use the frame of reference that this is not a 2-3 months impact event but one which can last 2-3 years, we can act now to create a different future.

There are 7 elements of Mission 10-20-30.

1. Start by putting money in people’s hands. As crores of Indians lose their jobs and business struggle, India is facing an unprecedented demand shock. To address this, we need to first put money in people’s hands. This is not about printing money, but giving every Indian family a fair share of the public wealth of the nation. By doing it now, we can kickstart the process of economic rejuvenation. Rs 1 lakh returned to 26 crore families each year for the next 3 years will require one trillion dollars.
2. Simultaneously, all bottlenecks for entrepreneurship and manufacturing should be removed. This will need structural reforms at every level. In case there are challenges, special economic zones could be created to accelerate the process of creating new legal frameworks where companies can operate – much like China had done.
3. India needs to upgrade its hard and soft infrastructure. A modern nation needs high-speed rail, many more highways, more ports and airports. It also needs better soft infrastructure – rule of law, property rights, contract enforcement. The government needs to commit a trillion dollars over the next few years to building this out.
4. Where to get the funds for this? Borrow $2 trillion from abroad.
5. How can these funds be repaid? Through a massive programme of public asset monetisation, and the increased production of wealth that will follow.
6. Cities must be made independent from the central and state governments – because cities are where the jobs will be created. Urban governance reforms are needed to free India’s cities.
7. Finally, taxes need to be streamlined – no tax in India must exceed 10%, so people and companies can keep more of the money that they earn.

Taken together, these 7 elements will work as the foundation for Mission 10-20-30 and kickstart a long boom for Indians and an irreversible march towards prosperity.

Tomorrow: India’s Mission 10-20-30 (Part 5)

In 2018, I had started the Nayi Disha initiative to create a free and prosperous India. While I failed to get traction due to the many mistakes I made as a prosperity and political entrepreneur, the ideas behind Nayi Disha are even more relevant now. This is how I began the Nayi Disha manifesto:

Poverty is not our destiny. India should have been a rich, developed nation by now but it is not. We, the people of India, have the important duty to make India prosperous. Indians are quite capable of creating wealth, as they have demonstrated in every part of the world they have migrated to. The primary reason for the failure to produce wealth in India is incompetent governance, myopic leadership, and bad policies. It is time we — all of us — took up the challenge and changed India’s direction with a new model of governance and politics.

The simple truth is governments do not create prosperity; people do. At best the government provides the enabling environment for people to create wealth; and at worst the government actively prevents the creation of wealth by needlessly handicapping the people through bureaucratic red-tape, corruption and high taxes. The ‘license permit quota control raj’ of Indian governments has doomed India to poverty, just like the British government did before independence.

The improvements in the lives of over 130 crore Indians depend on what we do today. Let us not waste any more time. We must free India from the stranglehold of the government. We have to do what we must do so that we can tell our children, ‘We did everything we could to change India’s direction.’

In India’s 130 crore population there are 130 crore futures waiting to be set free. Who knows how many great scientists, poets, social reformers, inventors and sports champions India has to give to the world — only if they had the opportunity to flourish. That cannot happen if they are trapped in poverty.

I wrote in the manifesto:

The world today is fabulously rich compared to the world of the year 1750 when most of the world was poor. The wealth of the modern world is due to a new set of ideas — known as the Enlightenment — which led to the Industrial Revolution in the Western nations and made them rich. Indians have been kept poor while other countries like Singapore, South Korea and China have put their citizens on the fast-track to prosperity in the recent few decades.

India has lagged significantly behind its Asian peers in creating prosperity for its people. The question we should be asking of our government: Why are we not 10 times richer?

People create wealth when they have the freedom to produce what they are capable of and trade in free markets. But Indian government policies coerce people and deny them economic freedom, thus ensuring poverty. Only those nations which enjoyed the benefits of free trade, and in which individual rights were protected by law became wealthy. If Indians have to become prosperous, India must become free. For India to become free, Indians must demand freedom from government control.

This is Nayi Disha’s objective.

The Third World War will hurt every nation. We can ensure that the work of building the New India starts now. What India needs is a Nayi Disha, which means both a new direction and a new perspective. We cannot easily stem the loss of jobs that is coming because industries are going to be transformed as people’s behaviour changes. Regardless of whether the government intervenes or not, businesses will need to be re-configured. The world of January 2020 is now a distant memory. A new world is coming whether we like it or not. We should be ready for the changed world.

The first step towards creating that New India is what I call Mission 10-20-30 – creating 10 crore new jobs in the next 20 months with a minimum monthly income of Rs 30,000. This way by the end of 2021, in time for India’s 75^th anniversary of our Independence, we would have taken giant leaps towards a free and prosperous India.

Tomorrow: India’s Mission 10-20-30 (Part 4)

The right frame of reference to look at the future is to view what we are living through as a War. But this is not just a localised skirmish between two groups or even nations. It is one which has rapidly engulfed much of the world. Few of us have lived through a World War. All we know are the stories which mark the start and end dates. The hardships faced during a World War are not what we have personally experienced. This is about to change.

In his blog post “The Third World War”, Atanu Dey writes:

World Wars are events that are global, cause severe economic damage, and result in very large numbers of deaths. Unlike ordinary wars, which are localized, by definition world wars involve the entire planet and no nation is entirely immune from the death and destruction that follows.

This world war, unlike the previous two in the last century, is not a military war. But like them, it will lead to some economic, social, and political upheavals that could not have been anticipated at the start. The start of world wars can only be identified in hindsight, when the whole world is engulfed in conflict.

Once this pandemic is seen as WW3, several implications follow. First, it is not going to be short-lived. World wars last several years, not a few months. Second, it is an inflection point. The before and after images of the world are radically different. Expect the unexpected. Third, all aspects of the world are affected negatively. The body blow to global health will cause economic disruption at all levels, and in all sectors. The tiny village in a poor nation will suffer, as will the mega region in an advanced industrialized nation.

Fourth, the political effect. Governments, which under normal circumstances gradually ratchet up their economic control, as they do in any war, increase their power and control at breakneck speeds. This is the most pernicious effect of this WW3, and this will cause more death and destruction than the pandemic will end up doing directly.

As Atanu concludes: “We were born after the two world wars of the last century, the last of which ended 75 years ago. People are used to wars around the world but have become accustomed to a world without a world war. We just don’t think it is possible that we will have to suffer a world war, or that global progress will be halted and reversed.”

Once we have a better understanding of what we are living through, we can start imagining the future. Based on that, we can take actions today which can reduce the impact of the worst that can be expected. In every war small or big, it is the poor who bear the brunt. India has lived with poverty for far too long. Till 1947, we could blame the British. After 1947, it has been the actions of successive governments that have created what I have previously called “perpetually planned poverty.”

What do we need to do to make sure the Third World War does not plunge tens of millions of Indians deeper into poverty? What can we do to build a New India from the ravages of the virus? How can we turn our greatest crisis into our biggest opportunity? What will it take to create ‘The Indian Miracle’ – like what China did starting in the 1980s?

Tomorrow; India’s Mission 10-20-30 (Part 3)

The recent story, “At Stake: 11 crore jobs, 30% of GDP,” in the Indian Express (May 2) leads with:

From a Delhi-based machine-part manufacturing enterprise which can’t pay its 24 workers to a paint-maker in Pune fresh out of insolvency but facing a funds crunch, a start-up which got a Rs 90-lakh order to make masks but is waiting for banks to give credit, to a Ludhiana export unit whose bills haven’t been cleared — no other sector has been pushed so far to the edge by the pandemic and the Covid lockdown as Micro, Small and Medium Enterprises (MSMEs).

These make up the heart of the larger industrial ecosystem, acting largely as ancillary units for the big enterprises, and employ, across 5 crore units, an estimated 11 crore persons.

At stake are not only these jobs but the future of what makes up 45 per cent of the country’s total manufacturing output, 40 per cent of exports — and almost 30 per cent of the national GDP.

How are MSMEs defined? From the story: “Even as the government is working on a new definition of MSMEs, the present classification for the manufacturing sector designates a micro enterprise as one with investment in plant and machinery not exceeding Rs 25 lakh, small enterprises with investment between Rs 25 lakh-Rs 5 crore and medium enterprises with investment between Rs 5-10 crore. For service sector classification, micro enterprises have investment in plant and machinery not exceeding Rs 10 lakh, between Rs 10 lakh and Rs 2 crore for small enterprises and Rs 2-5 crore for medium enterprises.”

I wrote earlier about the need to Unlock India and India’s Two Futures. 40+ days into the lockdown, Indians are hurting. In our effort to shield 130 crore lives from the virus, we are creating yet another epidemic which will kill many more – from lost jobs, destroyed livelihoods and concomitant starvation. The consequences of Covid will run deep through India (and the world). But India, because of its large poor population, will face even greater hardships. There is a need for bold measures now – before it is too late.

We need to change our frame of reference – we are not looking at an impact of a few months with everything returning to normal after that. There is no return to the world of early 2020. Because what the virus has unleashed is the Third World War.

Tomorrow: India’s Mission 10-20-30 (Part 2)