Pointing out that the most intriguing aspect of India is its sheer size and the nature of problems at the bottom of the pyramid, he emphasises that each one of the problems can be turned into a major test for innovation. The focus should be on experimentation and not further refinement of models and solutions that have not worked.

The professor of corporate strategy at the University of Michigan Business School, USA, was in the capital last week to receive the Lal Bahadur Shastri national award for excellence in public administration and management sciences. He spoke to Rajiv Tikoo.

You have been advocating more emphasis on wealth creation than on distributive justice. Wouldn't that widen the gap between the rich and the poor further?
These are two issues-the nature of distributive justice and the level at which the bottom of the economic pyramid is pegged. We have worried too much about narrowing the gap between the rich and the poor rather than raising the income levels of all. I hope we don't give up our desire for distributive justice, but there is more to life than saying that we have reduced the number of the rich and made them more like the poor. If we raise the income of the poor from Rs 1,000 to Rs 10,000 and the income of the rich goes up from Rs 10 lakh to Rs 15 lakh, the distribution may look much worse, but we would have guaranteed the poor a basic minimum quality of life.

But wouldn't we still need distributive justice measures like subsidies? Particularly in the areas of food, health and education?

Subsidy is like giving a person a fish to eat rather than teaching him how to fish, which would feed him all his life. We have seen rice being sold in Andhra Pradesh for Rs 2 a Kg. The result is that the state is heading towards bankruptcy and the people have no food to eat.

What went wrong?
We didn't supplement subsidy with supporting measures like growing more food at cheaper rates. What is worse is that subsidies have become like entitlements, which has created a dependent society. Instead of exercising the easy option of providing subsidy to the poor, we need to build a market around them.

Why should market forces bother about the poor? Aren't they doing fine?
They are not making enough money. Look at the kind of money that global corporations are making! We can't build global MNCs if we can't take disenfranchised people with us because of their sheer number.

But they have no obligation to do it?
They do have an obligation. The obligation is not social but in terms of the market forces. There is no ideological posturing. A few pockets of affluence alone can't sustain success for long in a disenfranchised society. Social unrest will result.

Would you be for giving incentives to businesses to prompt them take such initiatives?
I would rather remove all constraints.

Looking at the poor as consumers calls for a paradigm shift in thinking. Where does one begin?
How to do it becomes lot more easier if you are willing to do it. We have to begin by examining the basic assumptions on which our policy is built. We have to see if these policies are defensible or appropriate in the changed circumstances. If we view the problem of India as the problem of poverty, then we have a set of conventional prescriptions. But if we think of how to convert the poor into active consumers, we will develop innovative solutions.

What would be the basis of the new model?
Firstly, we have to alter the price performance relationship in all existing products and services. A Rs 25-ice cream will not do. Why not a good quality ice cream for Rs 1? Secondly, the models must be scalable. Thirdly, the models must be environmentally sustainable. The use of water, energy and material needs to be reduced. Besides, we don't have to imitate what is happening in the west. We have to selectively leapfrog--and innovate.