"India is not a poor country. It is a poorly managed country." ~ William Nanda Bissell
William Nanda Bissell is an interesting guy with interesting ideas. He is the CEO of Fabindia - a company that sources and markets the products of 40,000 craftspeople across India - potters, weavers, carpenters and many others who live by the ingenuity and skill of their heads and their hands. He has written an immensely readable book, called "Making India work", that wowed me with its originality, and the breadth and depth of his ideas for India.
Taking India's poverty head-on, Bissell makes the point that we cannot consider ourselves a superpower while 60% of our population lives in miserable conditions. His transformative ideas aim at generating wealth at the bottom of the pyramid, rather than waiting for a trickle-down effect.
Inspired by Gandhi's ability to anticipate offer solutions to the problems that India would face in the twenty-first century, Bissell's ideas are based on Gandhi's fundamental principles of sustainable living. Gandhi said need, not greed, should be the basis of all consumption; he called for appropriately scaled institutions - decentralized, local institutions that are accessible to the people; and he cautioned us not to blindly ape the industrialization and consumption of the West.
The book has four central ideas:
1. Scaling down government:
Bissell recommends a 4-level structure of governance: The Community, representing around 25,000 people, as the basic active unit of government (replacing the Panchayats); an Area that is a collection of 100 contiguous communities (replacing the district); a Region consisting of 10 Areas (replacing the State); and the Nation at the highest level. He is for simplifying the government and reducing its role mainly to enforcing individual rights, setting standards, and regulating and monitoring compliance. Bissell says this structure would reduce the Indian bureaucracy, now 22 million strong, to a mere 2 million government servants.
2. Ending Poverty:
Instead of its current scattered approach to alleviating poverty, where less than 10 paise to the rupee actually reach the intended beneficiary, Bissell recommends a voucher system - Targeted Catalysts - ensuring that every poor person is guaranteed six essential services - nutrition, drinking water, sewage disposal, education, healthcare and legal assistance. These vouchers would be honored by private providers of these services against re-imbursement by the government. Bissell suggests the value of the reimbursement to the provider will increase based on his or her quality rating; those who provide better service will get paid more.
3. Simplifying Taxation:
The current plethora of taxes - income tax, capital gains tax, sales tax, excise duty, etc. -discourage productivity, and carry high costs of compliance and collection. Instead, Bissell suggest a simple system based primarily on a property tax (1% of property value annually) collected by the Community. He says that while the current tax system raises around $120 billion of revenues, the new system can generate $300 billion at a fraction of the cost. This would also lead to empowering the Community government because the bulk of the revenue collection and spending on Targeted Catalysts would happen at the Community level.
4. The Real Cost:
Bissell puts his finger on the reason today's capitalism is failing - because it does not value the real costs of a product, including its production cost, its environmental cost and its disposal cost. He says we need to factor the real costs into the pricing. Similarly, as citizens, we are entitled to clean air and water. Through environmental exchanges, communities that invest in biodiversity, forests and clean water will be able to trade these credits with communities lagging behind, leading to a more investments in 'greening' the environment. Bissell has also worked out a transition plan and the creation of a National Asset Corporation that would use the value of public sector assets to fund the downsizing of the government as well as other transition costs.
'Making India work' is a must-read for the New Constructs community. While the ideas in the book will evolve with dialog, they form a great foundation for reinventing governments not just in India but across the world. Do read the book and share your thoughts with all of us.
Sudhakar Ram is Chairman and Co-Founder of Mastek, a leading IT solutions company. He has written articles on transforming India, corporate governance, financial markets and governments. He believes that we have the potential to create a sustainable world and live in harmony with our environment. However, this would require a fundamental shift in our mindsets - the "constructs" that drive our attitudes and actions. The New Constructs is his initiative to leverage Connected Intelligence in realizing the Connected Age. Please share. Stay active, stay engaged.
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