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Special articles
A New Development
Paradigm
Employment,Entitlement and Empowerment
At the beginning of the 21st century there is the need for a new development paradigm that
recognises that 'government failure' is a much more important problem than 'market failure'.
'Privatisation' of government services by its employees and government's monopoly of power
are the real problems today. The new paradigm must be based on a clear and non-ideological
recognition of the strengths and the weakness of the state and the people. A democratic
society has enormous potential for entrepreneurship, innovation and creative development. The
people, their diverse forms of activity and association such as companies, cooperatives,
societies, trusts and other NGOs must be allowed and encouraged to play their due role. The
state must focus on what only it can do best and shed all activities that the people can do as
well or better. The heavy hand of government in the form of incentive-distorting laws, rules,
regulations, procedures and red tape have also corrupted industry and business and other
organised interest groups. These must be removed so as to release the energy of the people.
The state should confine itself to managing the economy so as to accelerate employment and
income growth in a self-sustaining manner, ensure that all citizens receive their basic
entitlements of basic public goods and services and empower the poor so that they have equal
rights (and responsibilities) with the better off citizens.
ARVIND VIRMANI
The old paradigmof development is that (old) development paradigm of the second
Introduction of a 'mai-bap sarkar,' based on the as- half of the 20th century.
sumption that the active involvement of There is therefore the need for a new
eepak Nayyar, vice-chancellor of the state is essential for economic develop- paradigm at the beginning of the 21st
Delhi University, has written that ment and poverty removal. Over the de- century, that recognises that 'government
thoughthe old economic paradigm cades this was used to justify intervention failure' is a much more importantproblem
of the first three-four decades of indepen- in and entry of the state into every sphere than 'market failure'. 'Privatisation' of
dence has been abandoned, no new para- of economic activity. Under the guise of government services by its employees and
digm has replaced it. He believes that the noble purpose the government had gradu- government's monopoly of power are the
economic reforms carried out since 1992 ally usurped the space occupied by the real problems today. The new paradigm
therefore constitute an ad hoc series of private sector, cooperatives, individuals must be based on a clear and non-ideologi-
measures without a clear framework.1 and social groups. This spread of Levia- cal recognition of the strengths and the
There is perhaps no clear and explicit than has been accompanied by a gradual weakness of the state and the people. A
writtenstatementof such a framework that butpervasivedeteriorationof governance.4 democratic society has enormous potential
can be debatedanddiscussed. Some policy Though this deterioration started with for entrepreneurship, innovation and
recommendations during the 1990s have, specific areas of government operations creative development. The people, their
however, been based on a new approach and specific regions of the country, by now diverse forms of activity and association
to development policy.2 The currentpaper it encompasses the entire country, every such as companies, cooperatives, societies,
tries to make explicit and spell out more state and every field of activity in which trusts and other NGOs must be allowed
clearly the underlying principles that were government is involved. In some states and and encouraged to play their due role. The
implicit in such earlier policy papers. This in regions of other states, government state must focus on what only it can do
does not mean that everyone involved in, failure has now reached a point at which best and shed all activities that the people
or talking about reforms, was (or is) government has become non-functional:It can do as well or better. The heavy hand
cognisant of these principles or that all the cannot even fulfil the basic role, the pro- of government in the form of incentive
actions taken in the name of reform in- vision of 'public goods', that it has played distorting laws, rules, regulations, proce-
volved genuine reforms consistent with for centuries, leave alone the grandiose dures and red tape, have also corrupted
these principles.3 development role envisaged for it in the industry and business and other organised