The economics of happiness – decentralizing resources for the sake of equity.

This research proposal was written in response to the Sri Ram College of Commerce’s annual paper competition – Sri Ram Paper Competition 2020 by Ar. Shubhayan M, currently a student of PGDM – Rural Management, Institute of Rural Management, Anand. This paper went on to win first place in the competition following a double-blind review and a final presentation. Please read the full proposal below.

At the heart of livelihoods exist a universal desire for capital, either fueled by need or want. While one needs money for sustenance and securing his future, the want (of money) is complicated, involving psychology, desire, and much more. In between these two extremes dwell happiness, a parameter that is (majorly) independent of your economic position. Why independent? Because happiness is, in theory, relative. Comparing economic status with the level of happiness and satisfaction brings us to such strange crossroads – on the one hand, we experience joy when our paychecks get credited, while on the other hand, we see millionaires complaining and poor households in the countryside living a comfortable life. What then is the relationship?

Money can indeed buy happiness in today’s world. However, money can only do so much as buy, and it is this purchasing power that imparts happiness and not money itself. Delving a bit deeper, we understand that having a significant bank balance is associated with heightened satisfaction. However, it only persists up-to a limit. Give a poor man a hundred rupees, and he will be overjoyed; give a salaried person the same, and his excitement will be much lesser. In short, this relationship isn’t a straight line. After a point, with every unit increase in one’s income, the associated happiness tends to decrease sharply. This point of maximum satisfaction is what economic models have tried to achieve for decades; however, attempts have been many, and successes – few.

The 21st Century India is the nation transforming itself from a developing country to a developed one. Furthermore, for the government to ensure a happy population, bringing economic equity is perhaps the most immediate step. Looking at happiness from the Indian perspective, one can understand that the factors that affect happiness are: economic position, access to opportunities, and infrastructure availability. While our cities do provide the benefits of opportunities and facilities, our villages are, to date, devoid of such developmental factors. Moreover, while poverty is widespread in our country, one cannot deny that living conditions are much worse in rural than in urban areas. Economies are booming in the urban hubs, while for the surrounding peri-urban and the far-off rural, the dearth of investments, opportunities, and development is visible. The 21st-century urbanscapes is this peri-urban land experiencing steady growth and getting ‘developed’ in India. While this is a brilliant opportunity for the generations of Indians in the next few decades to build appropriately, its mismanagement will lead to unrecoverable losses.

In its prime, an individual aim to set up a stable livelihood to support himself and his family. In exchange for the opportunity of earning a better wage (incentive), he gives off his family and comfort zone (opportunity cost) and migrates to a convenient urban area from the rural. Economic considerations (scarce resource) lead him to engage in this one-time tradeoff, which takes him away from his roots. With the onset of the pandemic, the plight of these millions of migrated labourers came to light. With no support (economic or otherwise), they were forced to return to their homes. The once adored cities had ignored them in need, pushing them back to the fringes they call home.

If long-term happiness is the goal, our economic policy needs to take care of this Rural India that has provided for the urban since time immemorial but has never received the resources it deserves. The future lies in diffusing economies away from urban hubs and distributing them amongst its satellite towns and surrounding rural areas. Cities and urban hubs need to start acting as enablers to this growth. Growing out of this sole-provider model into the fabricator and coordinator role is essential for the nation to ensure smooth development. Decentralizing growth and development is the only way forward. De-densifying cities to control their breakdown needs to be enabled by creating sustainable hubs of settlements around its periphery, with significant concern for sustaining the habitation – cultivation balance.

With the appropriate capital and expert support, the vast rural-lands will generate revenue, becoming self-sufficient in action and sustenance in time. Happiness might be relative, but for the simple people living in villages, the opportunity of self-sufficiency and working with honor will be reason enough for unbound joy!

Considering the above, I propose my thesis on “Developing policies for decentralizing economic allocations to bring equity in the Indian Heartlands.”

My focus will be on the following:

• Ideate a nationwide Rural-Urban network enumerating the enabler-enabled network of village-town-city-metropolitan hierarchy for effective administration.
• Prepare the policy roadmap for “Smart Village Mission” that will incorporate infrastructure, service, and growth opportunities.
• Provide Rural India with enough economic backbone to empower the localized entrepreneurial spirit and kickstart self-help initiatives, cooperatives and SMEs.
• Develop villages into sustainable hubs of production and business and establish strong supply chains with the surrounding rural units and the nearest urban hub.
• Policies for developing the satellite establishments as a mutual extension to the city that provides respectable habitation and effortless smart commute for the working population.
• Brainstorm policies to include critical development parameters like sustainability, energy efficiency, pollution control, gender sensitivity, walkability, and information management into this growth.

With the right help, Rural and peri-urban India has the potential of becoming creamy chunks of socio-culturally vibrant populations that will retain its identity, hold its indigenous roots in place, and bloom into localized, organic clusters of developing economies, aiding in a uniform, equitable growth. This reallocation of resources, intellectual or otherwise, is instrumental in ensuring that our nation’s fringes derive the benefits that the urban enjoy, allowing them to grow in equity with the city.

Economic self-sufficiency will reinforce self-respect, reduce the gender gap, empower women, and diminish social stigmas. In the Indian context, I believe these are the key parameters that need to be fulfilled in our pursuit of happiness.

Written by Ar. Shubhayan M. Feature image has been sourced from the internet.

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