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In continuation to the article shared on the strategy for public policy, in which I mentioned the inclusive factors to be included while designing public policy, this article talks about the first and crucial factor, i.e., Social Capital.

Social Capital can be defined as a network where individuals in a society, with a common set of rules and values, work collectively towards a shared goal to attain mutual benefits.

In a country like India, the caste system determines social inequality. Though biased, still, it is astonishing to see the systematic accumulation of socio-economic capital and knowledge has been deeply embedded in our hierarchies for a very long time. This causes unnecessary hindrances in resource access and upward mobility for workers.

Religious-caste-based groups found in India can perpetuate existing social divides, thus suppressing cooperation and exchange between different groups, increasing distrust, and benefiting one group. At the village level, context-specific measures of social
capital are associated with children’s nutrition, but their impact is contingent upon local socio-economic resources.

After India’s independence, as India was an agriculture-based economy, we were sceptical of businesses and entrepreneurship. At the dawn of the 21st century, things began to change, when Social Capital generated within communities opportunities for individuals, creating a wave of favouritism and acceptance towards entrepreneurialism.

India is an oddball regarding entrepreneurship, as our entrepreneurial success is usually a result of support from communities and early capital. More generally, the evidence suggests that concentration in firms and wealth distribution is galloping ahead in India, which is bound to affect aggregate productivity and innovation against long-term capitalism adversely. However, it might give short-term gains to individual capitalists. In this context, capitalism, with its notorious history of never trying to address the problem of inequality in society, cannot remain unregulated. Social empowerment must be fought more vigorously than ever if markets are to be any guide. In the direction of capitalism, despite technological leaps forward in the overall capital formation, the relevance of social capital as a contributing driver in regenerating underprivileged groups remains undiminished in India, which has diverse and distinct land-based communities. Social Capitalism provides social up-bridging in the state, which subsequently provides a framework to implement larger-scale policy changes, for an example drinking water is a social necessity that, when provided, would increase the quotient of trust between citizens and government in terms of public goods provision (or utilization of resources), thus creating new social capital. Therefore, it is required to consider all the verticals of Social Capital while designing Public Policy in India.

By,
Dr. Abhishek Pratap Singh Sachan
Economist, Strategist & Academician