There are certain key issues in the transaction of business in India which are not always factored in when enterprises draw up their strategy. This is often true when one looks at the environmental factors which determine the relationship among resource generation/ identification, resource accessibility and resource affordability.
What is required is a careful designing of the architecture of the delivery processes and the delivery institutions. These institutions which undertake the supply, by definition, could be embedded in the private sector ethos or the public sector ethos or be a part of the essentially governmental sector. Each of them would have its distinct defining characteristics.
As anyone who has dealt with the growth processes realises, it is a complicated process. It is often mired in a social context. It sometimes stumbles on economic blocks and often takes its own shape. It is difficult to deal with this kind of conglomerate through political processes alone. A definite strategy is needed from the policy perspective towards developmental concerns. This can only be achieved through an extended attempt at engineering contextual processes, also.
Interestingly, like everything else, affordability has also various definitions. In economic terms it means that, if one is actually in a position to pay the price of a product or the resource which one needs, one should be in a position to pay the price. The unstated part is that if this price is paid through use of loan, credit or subsidy, a spiral is created. The ability to raise the credit itself corrodes much of the intrinsic capacity to be self- determining and innovating. The operations within the domain of enterprise get directly affected by the policy and the regulatory frame of the governance.
The institutions which organise resources or serve as a through put for products are by definition, at the ground level, in closer proximity to people. This, of course, helps the people to identify with the product and in turn enable the branding of not only the product but also the enterprise.
Credit itself can be demand-driven or need-driven. The two have different trajectories and thereby influence the affordability of the product. Resources, therefore, become accessible to varying extent to different categories of people. The financial sector development has to begin factoring in these elements in its framework of reference, if it truly seeks to pursue inclusive policies. Without that the financial institutions may have difficulties in working out a realistic policy which would contribute to their being seen with a market image that is people-friendly.
If the credit is demand-driven, it requires a lending regime. If it is need driven, it requires a credit-cum-subsidy regime. It is difficult to find institutions which combine the qualities of a bank lending regime and an institutional subsidy regime.
Unless these questions are answered, the dynamics which drives institutions and take products to the market can not be fully comprehended or mapped. That, they cannot be comprehended fully or mapped does not make them in-operational. Indeed it only makes it complex beyond intervention.
As if the situation is not intricate enough on its own, the factors of the global economy only contribute to the complexity. The integration of any society with the global economy was earlier on seen as an element which affected relationship of the post industrial world with the developing countries.
As the crisis of 2008 ebbed, the world woke up to the realisation that integration with the global economy is an issue also of developed economies. The case of Greece, Portugal and more are too fresh to recount.
Growth or development, therefore, cannot be just a factor of institutions such as the IMF, the World Bank or the ADB. It has taken on an organic shape and a force of its own, which defies any assured success of any guided intervention.
Perhaps what is required is an engagement with the various stakeholders on how they are faring and how they can do better. A sensitive analysis of the stakeholders’ profile would be a prerequisite.
It is obvious that economic development has to be buttressed in an all encompassing manner to make it effective. Here the socio-cultural factors, also, have to be accounted for. For some economic development would have no meaning unless it marked a change in their social status and their ascribed role in society. For others it is a battle for dignity and honour.
