Market Economy and Policymaking Imagining Socio-Capitalism in India: Leading through Crisis
Almost decade ago, India wound up consigned to the pack of 'fragile five' developing economies alongside Brazil, South Africa, Indonesia and Turkey and now it has moved from fragile five to the most preferred economy for foreign investment and today India's vulnerability metrics look undeniably more steady than they were previously.“India’s external debt ratio is significantly lower than five years ago, and India’s foreign exchange reserves now provide more than 10 months of import cover compared to around six months in 2012. India being one of the rapidly growing economies, it also happens to be the most unequal country” (Kundu, 25 Dec 2019).
Inequality has been steeply rising for the past few decades. The rich have accumulated a huge part of their fortune created through crony capitalism. Also, there has been a significant lag in strengthening and promoting free market enterprise policies to provide equal opportunities for new entrants and enable fair competition.“The inequality in terms of wealth distribution during recent times has been astronomical, and to make matters even worst, the unemployment rate has shot up to mind boggling 27.11% by the end of May’20 as per Centre for Monitoring Economy due to the COVID’19 pandemic, creating drastic disparities in terms of income” (Oxfam International, 2020). “As the pandemic led to a sharp economic contraction, half of the India’s 100 richest on the 2020 Forbes India Rich List saw humongous gains and their collective net worth rose by 14%” (Forbes.com, Oct 7, 2020). Socio capitalism depends on most citizens believing in the system and now because of the steep rise in inequality, the public’s belief in the government will be fading away going forward. With GDP growing steadily along with the rich getting even richer and increasing inequalities in income is causing imbalances to the Indian Economy indicating a strong capitalistic influence on the policy makers.
This paper proposes important measures for developing a free enterprise market economy and suggests measures by emphasizing two important levers towards improving the state of growing inequalities of income which will enable the society to contain the effects of crony capitalism and restore the trust and confidence in the system.
Keywords - GDP growth, Capitalism, Crony Capitalism, Income Disparities, Unemployment, Free Market Enterprise