In terms of natural resources, we need a new economic model of development. As a policy measure, governments have been allowing the private sector to exploit these resources for the public good. Although we are moving towards extreme capitalism in a unique way.
A large part of public property and resources is being occupied by players close to power. We are slowly, but surely becoming an economic oligarchy, where key assets of the economy are monopolized over public assets such as natural resources by some who in turn make themselves more powerful. Without economic prosperity, the poor cannot be uplifted, but prosperity requires a model of development that accommodates all those who participate in diverse economic ventures. Such results are not possible due to economic resources being concentrated in some hands.
What we are seeing today is a growing disparity between rich and poor. The rich are about ten percent of the population, of which the richest one percent had 42.5 percent of national wealth generated in 2019, while the lowest level 50 percent had only 2.8 percent of the wealth. Similarly, the richest ten percent of people have 74.3 percent of the total national wealth, while the remaining 90 percent have just 25.7 percent. According to an Oxfam report released in January 2020, the richest one percent of people in India have more than four times the wealth as compared to 95.3 million people.
Around 80 crore people in India earn less than ten thousand rupees per month. It cannot form the basis of a successful economic model that drives growth. We need a specific strategy. Take for example the telecom sector, which revolutionized communication and spread it to about one billion people in the country. It is under heavy debt, including AGR arrears.
The Nobel Prize in Economics this year to Dr. Paul Milgrom and Dr. Robert Wilson for improving the theory of auction and innovation of new auction formats has given. He explained that the auction framework often leads buyers to bid more in purchasing resources without which their enterprise cannot run. Such resources are the raw material for such enterprises.
The result is called the 'winning curse'. Therefore, the remedy is to design the auction in such a way that the winner has enough income to be in a position to earn revenue to discharge his debt obligations. Apparently, spectrum auctions in India were poorly designed, resulting in two major players controlling the market. Despite the government's claims, the auction of coal blocks did not excite bidders in the private sector.
The government hoped that this auction would be a source of huge revenue for it. This hope crushed and major sectors of the economy were deeply affected. Our indigenous production of coal is insufficient to meet the demands of the market and the industry is overshadowed by the import of coal at a high price due to private enterprises not participating in the auction of coal blocks. The import of coal for energy in India has been increasing since the year 2017 and in 2019 it was around 20 million tons.
The main point is that the determination of the purpose of the distribution of other natural resources, including minerals, is necessary. If the objective is to enrich the government, the results will be skewed and the public interest will be "harmed". If the auction of land at market price for hospitals-educational institutions If done, only a few people will invest, because the value of the asset will make the enterprise unviable. Of course, public property cannot be distributed at the cost of a penny. Today there is a need for an economic model in which the government should share in the profits of the industries. The government should adopt this objective when making policies that allow the public interest of public assets to private enterprises.
The progressive prosperity of enterprises will have their own challenges in sharing profits with the government. The outright auction of public properties on the basis of incorrectly scheduled auctions would be a death knell for the industry. While working in each sector of the economy, the government should have a separate strategic plan, so that everyone involved in the prosperity of the particular region can have maximum participation.
The government will have to face issues related to technology and resources. In fact, the best use of most government resources should be done with the analysis of specific problems in each sector. Governments should not look at every entrepreneur with suspicion, nor should government policies benefit only a few partners.
The time has come for our political system to become stronger and transparent. There is an urgent need for an economic model whose clear objective is to bring prosperity to the lives of people who are at the bottom of the economic and social ladder.
We currently live in a country that has lost its way, a country that is obsessed with increasing the power of politics and power. A country where private interests take precedence over the public good.