Big firms don't connect with the masses

The zeitgeist has definitely changed for the better and the more authentic, moving from macro numbers of all kinds and world rankings of the economy as a whole to looking inwards at what's happening to People India and acknowledging that the core muscles of the economy need urgent strengthening.

- RAMA BIJAPURKAR

The post-Budget commentaries from India Inc and business media (not so much stock market analysts!) have been around job creation and investment stimulation, although there is a significant constituency that saw the absence of consumption stimulation as a big miss rather than a glucose shot for a weak body with doubtful results. Also heartening is that, at last, popular commentary is acknowledging the various linkages between investment, consumption, micro, small and medium enterprises (MSMEs), and employment, instead of the siloed ways in which these topics have tended to be discussed so far.

However, still not explicitly acknowledged and framed as a basis for policy prescription is the dual nature of India's supply and demand ecosystems (with implications for employment).

India has a "two ponds" structure of supply and demand: Large companies, with a few exceptions, primarily serve a small group of richer consumers (or bigger customers) and employ a minuscule percentage of the population, while small businesses serve and employ the remaining bulk, either as informal employees or contracted own account workers. This "two pond" structure - deliberately not called "two tier" or any other hierarchical label-requires sharply segmented policy prescriptions as the interlinkages between the two are low.