Government as a disruptor in a market economy – The New Indian Express | Bot To News

The Union Budget is around the corner. And while it brings a sense of anticipation, pro-market enthusiasts scoff at the excitement, saying the Budget should ideally be a routine event for the release of government accounts. They don’t want the government to play a very large role in the economy, and they want it to stick to some basic policy predictions. This ‘minimalist’ approach, also known as neoliberalism, often stems from an unwavering belief in markets and competition. But government intervention has been shown time and time again to transform markets, make them more inclusive and empower citizens to participate in a ‘competitive’ market economy.

Aadhaar and UPI are two prime examples in recent years that have proven that government intervention can benefit both citizens (or consumers) and businesses. Aadhaar, launched by the government about 13 years ago, provided the platform for India’s now thriving digital infrastructure. Indian companies are using Aadhaar to acquire customers, develop business models and increase the reach of their companies in new geographies. Unified Payments Interface, another government intervention, has changed the course of payments and remittances in India. Another revolutionary idea of ​​the government came before UPI to set up NPCI, an umbrella body to create a robust and low-cost payment and settlement infrastructure in the country. Equipped with Aadhaar and NPCI’s RuPay payment system, financial inclusion has grown by leaps and bounds, along with the formalization of the economy. The government is now building an open source e-commerce platform in India. This allows small sellers, restaurant owners, etc. to access a larger customer base without having to split the 30-40% commission they share with existing platforms.

While some may question the need for the government to create such platforms when the private sector is already doing so, as long as the government remains only an enabler and enabler, this approach cannot be faulted. The government cannot sit idly by when the larger interest of the people is at stake. In a “perfect” market economy, people are treated as consumers whose fate is decided by market competition. However, the government can occasionally play the role of a disruptor to shake up the status quo in the market. We have already seen the benefits of this.

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