Business Today

Fireflies are rising

Reforms ought to be directed towards enabling more entrepreneurs and innovators.

Arun Maria        Print Edition: Jan 9, 2011

Recently, a European business leader asked me a question. How come India's economy continues to grow at around nine per cent a year even though the government has so far not implemented most of the reforms that economists and foreign business leaders have recommended as essential for the economy to grow? Where, then, is the energy for India's growth coming from, he asked. "It is coming from India's fireflies," I said. That intrigued him, and he arranged a meeting of European business leaders in which I presented the scenarios of India that were developed some years ago, based on an analysis of forces shaping India's growth. These forces were described to readers of Business Today in January 2005, in an article captioned A Nation of Fireflies (

The validity of those scenarios is borne out by the progress of the country today. The scenarios were comprised of four models of leadership and development that are operating simultaneously in the country. One is 'Buffaloes Wallowing (While Children are Waiting)'. In this model, progress is expected to be brought about by experts and leaders at the top. This is the traditional model for managing large systems.

However, when the leaders are unable to agree among themselves, there is no 'reform' and no progress. Meanwhile, the people are waiting for results. In India's case, education and health of our children must improve rapidly, and productive jobs must be created for them, for the county to realise its 'demographic dividend'.

Another model, vigorously operating in India now, is 'Peacocks Strutting (While Little Birds are Scrambling)'. The opening of the market and removal of government controls has enabled many people to become richer, and some very rich indeed! However, many do not have access to opportunities offered by the market because they do not have education, or access to finance.

Reacting to inefficiencies in government schemes, and to increasing corruption and crony capitalism, another model of leadership is spreading across parts of the country. This one forces change by violence. Described as 'Wolves (and Tigers) Prowling', it is seen in extremism-affected districts.

In 2005, the World Economic Forum (WEF) used these four models of change to construct three scenarios of the future of India. Economic forecasters in Britain and India then estimated what the growth prospects for the country would be under these scenarios. The first scenario was described as 'Atakta Bharat' (or Hampered India, based on the model of 'Buffaloes Wallowing') in which growth is hampered by the sclerosis in governance. In this scenario, according to the forecasters, GDP growth could decline to six or seven per cent. The second was called 'Bollyworld'. In this scenario of insufficiently inclusive growth, 'Peacocks Strut', but 'Wolves Prowl' too. This reflects India's present reality. Like in a Bollywood movie, glamour as well as violence is the daily fare of news. It may be fun, but it will end. In this scenario, growth will cross nine per cent for a while but as internal contradictions and tensions increase, it will taper down, was the analysts' verdict.

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