March 15, 2015

A ‘Bharatiya’ approach to development

Visiting Fellow Praveen Chakravartywrites in Hindu Business Line: "India is too diverse and unique a society for Western models to be effective. The MUDRA initiative takes this into account."

Excerpts below:

"… what constitutes a ‘Bharatiya’ model?… The fallibility of a one-size-fits-all Washington Consensus type economic model has been highlighted by many, including Princeton economist Dani Rodrik in his 2006 paper, Goodbye Washington Consensus, Hello Washington Confusion. Rodrik not only endorses the China counter factual example but also elucidates the damage inflicted on many Latin American and sub-Saharan African countries from blindly adhering to such economic policy prescriptions… 

In a provocative paper entitled Community Networks and the Process of Development, Cambridge University professor of economics, Kaivan Munshi, provides an example of what can form the contours of a ‘Bharatiya’ model… He argues that the caste system with 4,635 distinct genetic groups is an integral aspect of Hindu society and any development model for India must embrace this inconvenient truth… The proposal to set up the Micro Units and Development Refinance Agency (MUDRA) is perhaps a first step, expanding on the idea of last mile financing through established social networks in rural towns and villages."

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