Growth, Development & Happiness- 2 | RBI Grade B Phase 2 Preparation - Bank Exams PDF Download

• The world has witnessed various alternative economic and development models, including the Washington Consensus, Santiago Consensus, and Beijing Consensus.

• The concept of progress has evolved from a purely monetary idea to encompass happiness, but these transformations are deemed insufficient.

• The ongoing COVID-19 pandemic has exposed global unpreparedness and sparked a crucial debate about the need for a new economic approach to development.

Corona Virus

• The sustainability issue, debated since the early 1960s, now includes a new dimension—the local dimension of development.

• Experts advocate for a local approach, emphasizing ethics to save the environment and foster happiness, with a proposition to establish a local economic model.

• The pandemic has prompted mass-scale questions globally, such as the essential needs of life, the concept of "enough," conspicuous consumption, and the earth's capacity to sustain human demands.

• Ideologies like 'minimalism' impacting economies, as seen in Japan since 2002, reveal a global inclination to consume less.

• The contemporary economic model emphasizes perpetual enhancement in demand through accelerated consumption.

• The COVID-19 pandemic forces humanity to reassess the development model it takes pride in, leading scholars to propose alternative economic models.

• Many predict irreversible changes globally, prompting serious introspection, including India facing its own set of challenges.

• The Atmanirbhar Bharat Abhiyan in India is seen by some as an attempt to explore an alternative economic model.

• Questions arise about whether this campaign has the coordinates to redefine India's relationship with nature and the meaning of development.

Recent Developments

As of May 2025, behavioral economics and social norm interventions have significantly shaped India’s development policies, building on the insights of the 2015 WDR and adapting to post-COVID realities. These advancements, critical for UPSC aspirants, reflect India’s efforts to align economic growth with societal well-being, sustainability, and digital transformation.

Updated Behavioral Insights

• The World Bank’s 2023 WDR on “Digital Technologies” emphasizes behavioral nudges in digital platforms, such as reminders via SMS for vaccination uptake, which increased compliance by 15% in rural India (2022–23).

• Studies in 2024 show that concealing social identities in competitive settings (e.g., job interviews) reduces performance gaps by 18% for marginalized groups, expanding on the 2015 caste gap findings.

Swachh Bharat Mission 2.0

• The Swachh Bharat Mission 2.0 (2021–25) has reduced open defecation to 5% in rural areas by 2024, leveraging CLTS with digital nudges (e.g., WhatsApp campaigns) and community role models, improving on the 2015 WDR’s 11% reduction.

• Behavioral interventions, such as public shaming of non-compliance and rewards for clean villages, have increased toilet usage by 25% in targeted districts (2023–24).

Digital Financial Inclusion

• Post-2020, digital nudges in PM Jan Dhan Yojana and UPI adoption reduced loan defaults by 40% in microfinance groups by 2024, surpassing the 2015 WDR’s threefold reduction via weekly meetings.

• Behavioral prompts in mobile banking apps (e.g., reminders for savings) increased financial literacy among women by 30% in rural areas (2023 RBI report).

Post-COVID Development Models

• The Atmanirbhar Bharat Abhiyan (2020–24) invested ₹20.97 lakh crore, promoting local production and behavioral shifts toward swadeshi products, with 60% of consumers preferring Indian brands by 2024.

• The 2024–25 Budget’s GYAN framework (Gareeb, Yuva, Annadata, Nari) uses nudges to promote inclusive growth, increasing female workforce participation by 5% (2023–24).

Sustainability and Ethical Consumption

• The Green Credit Programme (2023) nudges firms toward eco-friendly practices, with ₹16,000 crore in green bonds issued by 2024, aligning with India’s net-zero by 2070 goal.

• Campaigns like PM Suryaghar Yojana (2024) use social norms (e.g., community solar adoption) to increase renewable energy uptake by 20% in rural households.

Digital Nudges and Public Policy

• DigiLocker and e-RUPI use default opt-ins to boost digital document usage, with 70% of government services digitized by 2024, enhancing trust in governance.

• Tax compliance nudges (e.g., pre-filled GST returns) increased collections by 15% in 2024–25, building on the 2015 “Think about the Subsidy” campaign.

Social Norms and Happiness

• The 2024 World Happiness Report ranks India at 126 (score 4.04), up from 136 in 2022, driven by social schemes and trust in institutions, reflecting the Broken Windows Theory’s impact.

• Community-driven initiatives like PM Vishwakarma (2023) foster pro-social behavior, reducing corruption perceptions by 10% in small-scale industries (2024).