Abstract

With the deepening of democracy, increased decentralisation, increasing social and political awareness, digital penetration, shifts in demography, demand for quality services by common citizens has been accelerating at a faster pace. In such a scenario, the role of State is critical for promoting equity in access to services. To translate political equality of our democracy into greater equality in access to essential services like safety and justice, just as examples, are bottlenecks that remain to be removed. Improving trust among citizens, between citizens and the State makes it easier for the state to implement complex reforms. This calls for constructive civic engagement for nudging pro-poor policies and removing elite bias, real or perceived. Moral imperative of catering to basic needs of a large low-income population necessitates pro-poor policies to ensure that vulnerable are not bypassed from fruits of growth. Economic strength is currency of power and India’s low GDP per capita limits her ambitions of becoming an economic and military power. Citizens cannot assume that the States function in public interest, just like employers cannot assume that employees do their duties. Engagement creates empowerment and empowered citizenry can make States act because they must.

Introduction

India’s large population, accounting for over a sixth of humanity, unparalleled diversity, and early democracy makes the country a global outlier. To accomplish the goal of becoming a Viksit Bharat¹ i.e. developed nation by 2047, India needs to focus on providing a roadmap for improving governance and state capacity. This will enable the state to deliver essential services more effectively for all Indians. In our democratic system, it is primarily through the state that those disadvantaged can pursue greater equality. However, the Indian state's weakness in delivering basic services limits our ability to translate the political equality of our democracy into greater equality in access to essential services like education, safety, and justice. ‘Democracy before Development’ has given all Indian citizens the ability to make a claim on the state, but has not by itself provided either the resources or political incentives to build the capacity of the state. Effective democracy requires active citizenship, and the quality of governance will reflect the extent and quality of citizen engagement.

Bhartiya Model of Development

The Article 1 of the Constitution of India states, "India, that is Bharat, shall be a Union of States”, signifying that both ‘India’ and ‘Bharat’ are equally official short names for the Republic of India. ‘Bharat’ has deep roots in our civilizational history, as demonstrated by the proto-republic Janapadas and Maha-Janapadas. Our age-old culture influences our approach to economic and social development. The traditional role of community in trade, production, and investment continues to underpin entrepreneurship, capital raising, and risk-taking. Balancing individual rights and societal responsibilities has evolved over time. In ancient India, Kautilya, for instance, synergized economic well-being and political administration in the Arthashastra, with spiritual good in the backdrop. Essentially, the indigenous or Bhartiya philosophy of development encapsulates the idea that 'the greatest happiness of the greatest number' serves as the ultimate criterion for determining what is right and wrong.

India has recorded steady growth despite domestic and global challenges including the once-in-a-century COVID-19 pandemic followed by an oil price shock. Numerous ideas that have shaped Indian policymaking are increasingly being embraced by developed nations across the globe. India's indigenous development approach has continuously adapted, evolving with accumulated experience and shifts in both national and global contexts. The Bhartiya development model encompasses Antyodaya and Empowerment. Antyodaya implies caring for the most disadvantaged in society, while empowerment affords everyone the opportunity to develop their talents and enables income-generating capability.

India's distinct combination of a vast population, unparalleled diversity, and early democratic roots places it uniquely on the global stage. This uniqueness calls for indigenous or Bhartiya solutions which often poses challenges for policymakers. While championing indigenous ideas means navigating uncharted territory without established global blueprints, foreign concepts risk rejection due to incompatibility, real or perceived, with India's context. Specific proposals such as developing a robust data and measurement framework or refining decentralized governance lack global precedents, raising concerns about their efficacy and potential drawbacks.

India’s indigenous development strategy has evolved with experience and changing national and international environments. For instance, ancient Indian treatises like Arthashastra mentioned efficient revenue collection, tax rates, and land utilization, leading to the golden period of ancient India. In the 1950s-1990s, India adopted a mixed economy model emphasising self-reliance, public sector dominance, and a focus on heavy industries and agriculture through Five-Year Plans to promote economic growth and development. Post-1990s reforms involved liberalisation, privatisation, and globalisation (LPG), opening up the Indian economy to foreign investments, reducing trade barriers, and encouraging private sector participation. The service sector, especially in IT and software services, has undergone significant growth.

Notwithstanding this, policymakers must focus on careful innovation and experimentation, with iterative refinement based on ground-level insights. Emphasizing state-level reforms encourages diverse approaches and generates valuable data and feedback. While these initiatives are grounded in informed judgment, their success is not guaranteed. For instance, the Aadhaar biometric ID project exemplifies India's capacity for pioneering innovations. Despite initial challenges, Aadhaar's widespread adoption and citizen satisfaction underscores its success in reshaping service delivery and digital payments.

In terms of financial inclusion, more than 51 crore Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, just as example, have been opened. Further, improvement in the financial inclusion index (FI-Index) reflects a deepening of financial inclusion across the country. The value of the index increased to 64.2 in March 2024 from 43.4 in March 2017, reflecting the steady rise in financial inclusion alongside economic development. A unique feature of the FI-Index is the quality parameter, which captures financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services.

Private social organizations such as NPOs and NGOs are essential in a democracy. These non-profit/non-government organizations provide public goods undersupplied by the government. They supplement and support the public in areas requiring a humane, personal touch at the community level. These organizations provide emotional and social interaction for orphans, the disabled, the mentally challenged, widows, and the aged. They are effective, efficient, and sustainable inter-generationally. Therefore, the government’s role in the economy needs careful crafting to ensure private initiatives and activities are not crowded out. The government should move from ‘command and control’ to ‘plug and play’. This will go a long way in achieving sustained and inclusive growth.

In essence, the Indian approach to inclusive development, from a development economics perspective, is built upon three fundamental pillars namely Market Economics, Empowerment, and Pragmatism. These include providing basic needs such as Food, Water, Sanitation (toilets), Health, Fuel (cooking gas), Electricity, Housing to every citizen.

Citizen Centricity and Trust

Fostering trust both among citizens and between citizens and the state is a virtuous cycle between enhancing state effectiveness in public good provision, citizen engagement, and increasing trust in the government. An increase in trust will, in turn, make it easier for the state to tackle more difficult problems and implement complex reforms that require some upfront costs but can generate long-term gains for all citizens of the country. For instance, there was a food crisis in India when the US abruptly stopped shipment of key wheat supplies in mid 1960s. Lal Bahadur Shastri, the then PM’s clarion call of eating cereals only once a day was followed wholeheartedly by one and all, be it rich or poor, man or women, child, young or old. No second question was raised by anyone. This challenging issue could be tide over because of trust between citizens and the State.  Conversely, three Farm laws had to be rolled back in 2022 due to lack of trust between citizens and the State. This happened, despite these three laws being pro-farmers as assessed by most agriculture economists of National and international repute. These two contrasting real life instances abundantly illustrate the impact and importance of trust between citizens and the State. In short, if Citizens distrust the State, citizens will make it hard for the State to implement even welfare oriented reforms. Civil society's effectiveness improves when it collaborates with the state, and governments become more effective when they build trust with citizens. Low trust also undermines advocacy for the poor, harming our collective capacity to engage in positive-sum actions.

With the deepening of democracy, increased decentralisation, increasing social and political awareness, digital penetration, shifts in demography, demand for quality services by common citizens has been accelerating at a faster pace. In such a scenario, the role of State is critical for promoting equity in access to services. To translate political equality of our democracy into greater equality in access to essential services like justice and safety, just as examples, are bottlenecks that remain to be removed. This calls for constructive civic engagement for nudging pro-poor policies.

India's subdued performance in service delivery is significantly influenced by elite bias in policy and public spending. According to Bardhan (2004), three elite groups viz. government employees, large landowners, and big businesses, exercise disproportionate influence in policy making and disproportionately benefit from public resources. Empirics show that such a state of affairs prevail not just in India but around the world, albeit in varying degrees. Due to their greater access to power, policies often reflect the preferences of these elites. ‘The police in India are primarily geared towards serving the ruling class rather than the citizens’, so says Prakash Singh, former DGP (UP). Such elite bias has compromised the effectiveness of India's service delivery system. Constructive Civic Engagement is, therefore, crucial to mitigating this bias in both policy-making and public spending.

‘Rule of law’ under the scheme of the Constitution of India mandates everyone to be equal, no body is above the law and none below it.  Implicit in it is that not just elites, but poor and middle class too can contribute to development. While  poor can contribute by making them more empowered, middle class by being more engaged in civic life and shaping public sphere by lobbying for collective goods and governance reforms in areas such as environment, safety and justice. Citizens can not assume that agents (the State) function in public interest, just like employers can not presume that employees do their duties. Engagement creates empowerment and empowered citizens ought to make Government act because they must.

Pro-poor activists argue ‘State favours elites by default…’, necessitating continuous pressure for pro-poor policies. They often pursue opportunities to enact pro-poor programmes, even without conclusive data on effectiveness, due to the perceived pro-elite bias. In contrast, local elites frequently resist well-designed welfare programs, fearing a loss of control over the poor. Given such resistance, even efficiency-enhancing welfare programs like MGNREGA would have never come into being without sustained advocacy of CSOs. Weak public service delivery raises costs for businesses which makes them less competitive.

While free-market capitalism promotes efficiency and growth, it often exacerbates inequality by benefiting elites with financial, physical, and human capital. This entrenches their power, undermines state support for the vulnerable, and makes institutions more extractive. Global evidence indicates that elite capture of institutions to maintain advantages is common, with similar dynamics observed in India. Market-led growth can worsen conditions for the vulnerable unless the state acts to broadly distribute growth benefits.

Efficient public spending can deliver significantly more for the poor. Improving the effectiveness of public spending transcends a technical, financial and moral imperative. CSOs should acknowledge that well-regulated competitive markets are among the most effective tools for poverty alleviation, as evidenced by transformative growth in China and India following market-based reforms in the 1980s and 1990s. The power of free markets lies in using market prices to allocate resources and create incentives for efficiency and innovation. Societies that rely more on free markets than on state control tend to experience higher economic growth and greater human development.

Reforms: Agriculture

Agriculture is the life blood of Indian economy and farmers its backbone. Indian agriculture deploys 45.5 per cent of total workforce in the country, 60 per cent of country’s total land area, 83 per cent of fresh water, yet it contributes only 15.1 percent of GVA.  Implicit in it is that Agri-labour productivity in India is low at 21 percent compared to that of non-agriculture. Surely, something is missing in the sector and it calls for reforms. When LPG reforms were initiated in India in 1990s i.e. reforms were introduced in tertiary and secondary sectors of the economy but kept the primary sector (agriculture) away from those reforms. The fruits of reforms undertaken in tertiary and secondary sectors trickle down to primary sector rather slowly. In an Economy, agriculture lies at the bottom, manufacturing in the middle and services sector at the top. If reforms are like launching the rocket, these ought to have been initiated and fired from the bottom, not from the top.

Figure-1: Contrasting Approaches to Reforms, India & China

While non-farm sectors may offer higher growth rates, agriculture remains crucial for inclusive growth, employment, renewable energy, and sustainability. Therefore, reforms in agriculture sector have to be placed at the core of development strategies. This will go a long way to accomplish the objective of a "Viksit Bharat²" by 2047.

Reforms: Food Security

As the home to one-sixth of the world's population and a burgeoning young workforce, India plays a pivotal role in global food security. Food is  peace. Hunger and food insecurity are key drivers of conflict and insecurity. Hunger and conflict feed on each other. WFP too underscores the importance of addressing hunger to prevent conflicts and create stability. SDG 2: Zero Hunger aims to “…end hunger and ensure access by all people to nutritious and sufficient food all year round.” Our goal should be to create a world where no one, particularly those in vulnerable situations or affected by crises, goes to bed without bread.

Each grain of food saved from waste is as valuable as each grain produced. Addressing avoidable food waste³ is critical to food security. Food is often discarded by companies when surplus packaged goods approach their 'best before' dates, by restaurants and caterers with excess but usable cooked food, and by local communities. India should implement a 'No Food Waste' (NFW) policy to channelize such food effectively. Promoting a Food Banking Network (FBN) could significantly contribute to achieving zero hunger. Hunger is not only a food issue but also a logistics challenge. The FBN would play a pivotal role in providing safe, nutritious, and sufficient food for all by collaborating with companies, corporations, retailers, caterers, and restaurants to recover safe, wholesome food (both cooked and packaged) that would otherwise be discarded. Leading food companies should be encouraged to redirect their surplus inventory to the FBN. This network would manage inventory, establish warehouses, and oversee shipping, storing, and distribution. Aggregated food would then be directed to institutional feeding programs and community-based organizations for distribution to those in need. This approach would significantly alleviate hunger, increase awareness about reducing food waste, and support the progressive realization of the right to adequate food for vulnerable populations.

Reforms: Fertilisers Subsidy

Crops need a balanced mix of nitrogen, phosphorus, and potassium (NPK) for optimal growth. While urea (nitrogen) supports plant growth, phosphorus accelerates blooming and stress resilience, and potassium is essential for photosynthesis. Despite the recommended N:P:K ratio of 4:2:1, the existing ratio has become skewed to 11:5:1 for the Kharif season 2023-24, resulting in an overuse of urea. Overuse of urea—by a factor of 2.75 times—degrades soil fertility and causes environmental harm.

Urea, the sole controlled fertilizer, is sold at a statutory notified uniform sale price, while decontrolled phosphatic and potassic fertilizers are sold at indicative maximum retail prices (MRPs). Although urea prices are fixed with fluctuating subsidy levels, the subsidies for phosphatic and potassic fertilizers are fixed, while their prices fluctuate. Urea has consistently been priced low at Rs. 5,360 per tonne (due to subsidy), compared to approximately Rs. 27,000 per tonne for DAP and Rs. 33,500 per tonne for muriate of potash (MoP). This misalignment in fertilizer pricing policy has led to imbalanced fertilizer use, higher domestic resource costs (DRCs) in urea production, increased greenhouse gas emissions, water contamination, and reduced soil biodiversity, all of which negatively impact the environment and ecology.

Fertilizer subsidies have more than tripled from Rs. 81,124 crores to Rs. 2,51,339 crores over the past three years (2019-20 to 2022-23). Implementing Direct Cash Transfer (DCT) to farmers in lieu of subsidized fertilizers would allow them to select the optimal fertilizer mix for their soil without being affected by the distorted NPK price ratios. This change would also grant farmers the flexibility to grow crops that do not require urea, addressing the current policy's tendency to favour urea-dependent crops like wheat and rice over pulses, which require other, more expensive fertilizers. This has led to a skewed crop production mix that does not align with demand. A more efficient approach would be to provide direct subsidies to farmers. With a gross cropped area (GCA) of 191.76 million hectares and the government spending over Rs. 2.51 lakh crores on fertilizer subsidies in 2022-23, the annual subsidy equates to Rs. 13,090 per hectare. Based on this, if a weighted average cash amount of Rs. 12,744 per hectare is transferred in a graded system Rs.16,000 per hectare for small/marginal holdings and Rs. 8,000 per hectare for large farms as outlined in Table-1—the total fertilizer subsidy bill could be reduced to Rs. 2.44 lakh crores for 2023-24.

Table-1: Direct Cash Transfer in lieu of Fertilizer Subsidy, 2023-24

DCT would not incur any additional net expenditure from the exchequer beyond the current level of fertilizer subsidies. It would enable farmers to select the fertilizer mix best suited to their chosen crops, free from the distortions caused by the current NPK price ratios. This shift would encourage fertilizer manufacturers to develop new 'value for money' products tailored to specific crops, soils, and agro-climatic conditions. Concurrently, farmers would transition from chemical-based agriculture to organic and natural methods, enhancing local fertilizer production, improving soil health, reducing environmental impacts including GHG emissions, and optimizing the production mix within the agricultural ecosystem.

Soft and Hard Power of India

The terms 'soft' and 'hard' power are often used across the world to characterize countries' ability to shape the global environment to advance their respective National interests.  A country's 'soft power' reflects its ability to co-opt other countries to be favourable to its interests by aligning values and culture. It is boosted by building goodwill among other countries that can be tapped in times of need, and used to further mutual national interests. In contrast, a country's 'hard power' reflects its ability to coerce others to promote its interests. It is influenced by factors such as total GDP, per capita GDP, tax to GDP ratio, and military strength, which determine countries' ability to wage economic or military warfare and bear the costs of doing so.

India owes her more soft power than hard power to the broad appeal of India's democratic values, respect for diversity, and a tradition of non-aggression, widespread popularity of Indian culture, movies, cuisine, and classical rich music. In recent years, India's standing in the world has been steadily rising. The combination of India's democracy, steady economic growth, large domestic market, favourable demographics, vibrant innovation ecosystem, and highly successful diaspora are both indicators of success as well as enablers of a bright future. Together, these factors have contributed to India's growing international stature as a key pole of a multipolar global order that can both drive global economic growth, and contribute to the provision of global public goods like security, vaccines, and mitigating climate change.

However, we also face several internal challenges-especially in basic service delivery to all citizens. This challenge is so severe that ‘…the majority of Indians outside a narrow elite face a broken ladder whereby they simply cope but are not able to advance' to prosperity, reasons Krishna (2018). This broken ladder not only limits the potential of the affected individuals, but also limits India's overall potential by not leveraging the talents of over a billion people. This is why acting on the reform roadmap will help India boost both its soft and hard power.

While India's context is unique, her governance challenges are not. Many low and middle-income countries (LMICs) face similar issues including public safety, access to justice, effective social safety nets, and job creation. They also grapple with weak governance and state capacity.

India's soft power can be amplified by leading in the development of digital public infrastructure. For example, the World Bank's ID4D (Identity for Development) group, which assists countries in establishing digital ID and public infrastructure, heavily draws from India's Aadhaar experience. The World Bank's Living Standards Measurement Survey (LSMS), which has formed the basis for globally comparable measurement of living standards, drew heavily from the Indian template. Muralidharan (2024) reasons ‘Reflecting India's global leadership in this realm, the World Bank ID4D group has facilitated learning missions for officials from various LMICs to India in recent years’. By testing and refining such ideas, India can offer solutions applicable to other countries, thereby enhancing her global goodwill and soft power.

One of practical constraints to building India's hard power is her lower GDP/capita in relation to many other powers. The best way to build India's hard power is to have faster economic growth. Even if India grows faster than China for a few years, just as an example, China's total GDP will grow much more during this period because their starting level is four times higher.

Table-2: Projected Scenario of Economies of India & China

China's GDP will increase by more than double that of India even if India grows twice as fast. So, the gap between China and India is likely to grow in the near future. China's greater economic growth results in a more substantial increase in their military spending. Bridging this gap requires her to sustain annual growth over 8 per cent per annum for a couple of decades.

Such a level of growth for a few decades can be sustained if the productivity of over half our population is augmented by carefully crafting investment in upskilling the skills of unskilled, public safety, health, access to justice, prudently allocating key productive inputs like land, water, credit. This will propel the country to fire on all cylinders, enable us to  push the frontiers, realise our full potential and thereby boost India's soft and hard power in the world.

Conclusion

Bhartiya philosophy of development encapsulates the idea that 'the greatest happiness of the greatest number' serves as the ultimate criterion for determining what is right and wrong. Indian approach to inclusive development is built upon three fundamental pillars namely market economics, empowerment, and pragmatism. These include providing basic needs such as food, water, sanitation (toilets), health, fuel (cooking gas), electricity, housing to every citizen. To translate political equality of our democracy into greater equality in access to services like justice and public safety, just as examples, are bottlenecks that remain to be removed.

‘Food is peace’, because hunger and conflict feed on each other. Hunger and food insecurity are key drivers of conflict and insecurity. Addressing hunger prevents conflicts and creates stability. While non-farm sectors may offer higher growth rates, agriculture remains crucial for inclusive growth, employment, renewable energy, and sustainability. India ought to implement a 'No Food Waste' (NFW) policy and promote Food Banking Network (FBN). This could significantly contribute to achieving zero hunger.

Growing citizens demand for better service delivery makes it imperative to invest in building the state's capability to deliver better services to the citizens. Internal reforms, punctuated with proactive global engagement, are essential for shaping a conducive international environment for India's progress. Citizens can not assume that agents (the State) function in public interest, just like employers can not presume that employees do their duties. Engagement creates empowerment and empowered citizens can make the Government act because they must. India, then, can realistically realise the dream of Viksit Bharat by 2047.

Network (FBN). This could significantly contribute to achieving zero hunger.

Acronyms : Trinity of Citizen, Society and State (Table)

Endnotes

1.       Indianised version of Developed India.

2.        Food loss occurs at the production, post-harvest, and processing stages of the food chain whereas Food Waste connotes what was originally produced for human consumption but then was discarded or was not consumed by humans. This includes food that spoiled prior to disposal and food that was still edible when thrown away. Food waste is more directly linked with consumer behaviour. Loss implies a lack of control and therefore, a lack of responsibility in contrast to waste which entails responsibility. Thus, loss is inevitable, but waste is avoidable.

References

1.       Bardhan, Pranab K (2004). Scarcity, Conflicts, and Cooperation: Essays in the Political and Institutional Economics of Development; MIT Press.

2.       Krishna, Anirudh (2018). Broken Ladder: The Paradox and Potential of India’s one Billion; Penguin Random House India.

3.       Mahbubani, Kishore (2009). ‘Can Asians think?’, Marshall Cavendish International (Asia) Pvt. Ltd., Singapore.

4.       Muralidharan Karthik (2024), ‘Accelerating India’s Development’, Penguin Random House India Pvt Ltd., Gurugram.

5.       Virmani, A. (2023). Bharatiya Model of Inclusive Development-Sabka Sath, Sabka Vikas, Sabka Vishwas, Sabka Prayas. NITI Policy Paper – May 2023. https://www.niti.gov.in/sites/default/files/2023-06/NITI_policy-paper_BMID_2023- May.pdf