Arvind Singhal: More challenging years ahead

MARKETMIND

There are many reasons to be optimistic as the New Year begins. Inflation is well under control, the finance minister remains confident about the economy's growth prospects and the strong likelihood of achieving 9% or more in the current fiscal, exports have grown by almost 27% in November notwithstanding the rising din about the adverse impact of a stronger rupee vis-à-vis the US dollar, the stock market indices continue to show growth trends notwithstanding some hiccups now and then, and there's every likelihood of many more Indians making it to the list of the global super rich.

With this pervasive "feel good" factor in the pink and electronic business media as well as in swathes of India especially in the metros and other select large urban centres, it is easy to underplay or even overlook the many challenges that lie ahead in 2008 and beyond.

To start with, the recent strong electoral reverses faced by the Congress party are likely to make an already hamstrung government become a lame duck one in the shadow of the next general election that is not too far away. Critical decisions on structural policy changes or progress on implementation of major social and infrastructural projects are likely to be further stymied, further aggravating bottlenecks already being faced by most businesses. One only has to look at how many kilometres of new highways have been built or modernised, how many megawatts of new power generation capacity has come on line, how many more engineering and medical and other higher education seats have been created, how many additional hospital beds have been commissioned, and how many actual low-cost housing units have been built and delivered to the tens of millions of BPL and low-income households during the term of the current government to understand the gravity of the impact of further slow-down in the implementation of action on the ground.

India continues to show up strongly on myriad global top-10 lists where it should not be. It has the largest number of illiterate people in the world (over 300 million), it has the most people living below $1 and $2 per day (400 million and 800 million, respectively), two of the 10 most polluted cities in the world happen to be in India and three of the 10 most industrial polluted sites also happen to be in India, in a list of 221 "" India fares worse than Kyrgyzstan and Kazakhstan in infant mortality rates and, at 200 million, has the highest number of malnourished children in the world (despite this, we take pride in the demographic dividend potential of India that statistically shows that we have amongst the youngest populations in the world), and at 0.7 per 1,000 has amongst the poorest doctor-to-patient ratios in the world. Finally, on all corruption and inefficiency of performance of various bureaucratic institutions, India continues to rank very highly.

On the flip side, there are many other global top-10 or even top-100 lists where there is hardly any or no presence from India yet. No Indian academic institution is represented on the list of the world's top-100 colleges or universities, no Indian medical institution makes it to the list of the best 50 in the world, no Indian product or company has made to various lists published in 2007 relating to 10 or 100 most innovative products or businesses, no entry in any list of top 10 scientific discoveries, no entry in any list relating to tallest or biggest or largest man-made structures (if one does not count the recent list of Delhi's Akshardham as the world's biggest temple complex!), no entry likely in the list of top 10 medal winners at this year's Olympics at Beijing and just about no world record in any athletic event, and finally, no entry in any list of world's top 25 or even top 100 philanthropists in 2007.

Given India's size (geographical and population) and diversity (almost in every dimension), it is a Herculean task to make it to any of these aspirational lists or to get off the damning ones. Further, this task is not only limited to the government or our political representatives. In fact, in more ways than one, India desperately needs innovative models in the so-named public-private partnerships, be it the social sectors such as education, healthcare, urban development and management, public transport, and perhaps even internal security or in the physical infrastructural and economic sectors including the oft-mentioned including roads and airports, power, irrigation and potable water, agriculture, etc.

Having lost valuable decades in debating and posturing and lecturing each other, it is critical to make 2008 (and the following years) as the year of thinking really big, think really out-of-the-box, and acting with a sense of unprecedented urgency. Yes, it is likely that some plans will fail and some decisions or implementations could end up sub-optimally or even disastrously. However, the price to be paid for inaction (or timid actions) would be much bigger not only for the ruling coalition but for the rest of us too.

arvind.singhal@technopak.com