While there is much talk these days about concentration of wealth in a few hands, a simultaneous process of capital dispersal draws very little attention.

Perhaps, this is because capital accumulation on the commanding heights of the economy is more noticeable while dispersal primarily falls in category of a silent revolution.

What is more significant is that dispersal seems to be outpacing concentration of capital at this point of time. And the trend is likely to gather momentum over time. One can see a wide dispersal of capital as well as production facilities and rapid shifts in export and investment markets. And fiscal devolution is making its own impact in this emerging scenario.

Traditionally, capitalism has tended to concentrate capital in few hands, population in cities and workers in factories. Now some of these trends seem to be reversing. For example, global demand and speculative trading in farm produce is shifting policy focus on agriculture. The surge in wheat support price is one indication that the widening disparity in incomes of urban and rural population is intended to be narrowed. A beginning is being made to correct the inter-sectoral imbalances between agriculture, manufacturing and services sector for harmonious economic development. Focus on farm productivity is fuelling growth in food processing industry.

Big companies are shedding labour, outsourcing other than their core businesses to become lean and thin and prospering through networking. Production under one roof is getting out of fashion. Inter-corporate financing is, at least for the time being, replacing bank borrowings. While credit to private sector is shrinking, farm loans are rising, though critics say not fast enough.

The number of big companies listed on the stock exchanges is stagnant while the number of private firms and partnerships etc., is swelling. Enterprising professionals are setting up their own shops and self-employment is on the rise.

There is growing evidence that the informal sector is more vibrant than the formal sector.Banks and financial sector are losing some of their official patronage with government borrowings being made cheaper through continuing central bank policy rate cuts. Worse still, banks are not growing on their own steam (through conventional mode of intermediation and lending to the private sector while government borrowings are hitting their limits).

Cash-strapped government suffers from rising debt and fiscal deficit despite enormous increase in tax revenue in absolute numbers over time. The gap between government revenues and expenditures seems impossible to bridge. Critics say the rich are reluctant to pay their due taxes, claiming tax exemptions for which they may not necessarily be eligible. But government spending on productive or non-productive pursuit translates into incomes for a sizeable segment of the population.

Philanthropists prefer to donate to community welfare organisations and NGOs rather than donate money to the government, as in the past, to provide relief to those affected by natural disasters.

The pervasive rent-seeking indicates that many big companies suffer from the lack of organic growth. That the more money they make, the more they are short of it. The earnings are not going so much into new Greenfield projects as setting up of ‘outsourcing businesses’ or in speculative trading in stocks, real estate, currency and commodities.

That is, accumulating cash rather than building productive assets — plants, machinery and equipment. It is an escape from a Nature-imposed obligation to produce goods and services to meet the needs of the people, a responsibility that imparts legitimacy to a social system.

Therefore, the much talked about sustainable economic growth is a deviation from the real objective of maximisation production and economic development.

Naturally, the output gap is providing the space needed for informal businesses to prosper in diverse ways, helped by information technology. Even in formal sector, diversification in production is visible in jewellery exports hitting $1 billion dollar per annum.

With the sway of international capital weakening over national economies since the start of financial crisis in 2008, domestic capital has found more space for its development and growth on its own momentum and in diverse ways. It has still to gather the critical mass to be loud and clear.

While the weakening of the rupee may not be good news for many, it is protecting domestic market by making foreign goods expensive. Import substitution and exports would thus be encouraged, leading the economy towards self-reliance. With Asia driving world economic growth, foreign trade and domestic production would also be further diversified.

The 2008 elections threw up multiple centres of power and spurred pluralism in the economy and politics. The national pools led to redistribution of resources and authority among the federation and its four affiliated units. The concept of ‘ unity of command’ crumbled with the strengthening of democratic federalism.

Instead of a strong centre calling the shot, reconciliation of conflicting interests and views through consensus decisions gained ascendancy. The economy and politics are in a transformation phase.