| Last week, as my colleagues and I were wrapping up a project we were doing for a major European client and were preparing an executive summary for the CEO, we were advised by our client-contact to be a bit cautious when presenting the India story to his board. He said that some questions were already being raised about the sustainability of India's growth in the European media and hence we should be prepared to defend our somewhat optimistic projections about the potential for their business in India. This advice came in contrast to the very palpable exuberance felt for India at the recently concluded World Retail Congress at Barcelona in March this year, where India occupied more than its fair share of the attention of the leadership of leading retail businesses. |
| After objectively reflecting on what could have caused this change in these last few weeks, I tend to conclude with a sense of dejà vu that the India story may be losing just a bit of the momentum that had been build up in the last three years. A series of seemingly unconnected developments are somehow coming together to lead some to already start questioning if India has indeed successfully launched itself into a self-sustaining high growth orbit. For observers outside India, the government's knee-jerk reaction to control inflation through a series of ill-advised moves such price controls on commodities with public warnings to manufacturers to fall in line was one such trigger to start raising doubts if India is indeed on the way to becoming a freer, market-driven economy. Stories of unprecedented power cuts even in Mumbai brought many to realise that the ground reality is that our inadequate infrastructure has finally been stretched to its limit and can no longer support further growth unless new capacity becomes available. If the number of stories appearing on Google news is any indicator, the ridiculous Shilpa Shetty/Richard Gere episode and now the more serious Gujarat encounters have caused more damage to India's image than the goodwill that was generated not so long ago at the World Economic Forum at Davos. Within India, I read with dismay about the continued gross mismanagement of education and human resource development efforts with the ministry now scuttling plans for additional IIT campuses in Gujarat and Kerala ostensibly on political considerations, thereby continuing to contribute to the rot that first started with the NDA government's dogmatic minister of HRD. Leftist allies of the UPA continue to stall even the most innocuous of moves to usher in more structural/fiscal reforms, frustrating most within India and outside. Regrettably, it is quite likely that the current elections in UP will again lead to an even more fractured mandate and probably bring to power another unprincipled coalition in one of India's most populous, economically backward but politically important states. If this happens, not only will it negatively impact the hundreds of millions in this impoverished state but will probably further stymie the UPA government's functioning and may lead to even more anti-reform, populist measures in preparation of the 2009 general election. |
| If this inference about an impending slowdown in India's growth momentum is indeed correct, then what should we do about it? I believe that the billion Indians deserve to dream and dream big. Misguided or self-interest-guided political ideology has prevented India from fully realising its economic potential so far, and has led the country to have some of the worst socio-economic indicators in absolute terms""be it the poverty rate, access to water, sanitation, education, energy, roads and public transport, housing, and quality/affordable healthcare. India now needs to grow rapidly before these challenges go totally out of hand. Hence, I believe that our media must exercise its unquestioned power more judiciously and, for the time being, put the Gere/Shetty or Abhi-Ash trivialities on the back-burner while putting intense pressure on our political leadership and our bureaucracy to act judiciously and with a sense of urgency, to act only in the larger public interest, and to actually serve the interests of the aam aadmi, who has voted them into power. The captains of our industry and all the chambers of commerce must speak in a powerful, unified voice to force our antediluvian bureaucrats and the politicians to think modern, think liberal, think pragmatic, and think futuristic. Most change will bring some discomfort and probably some pain to a few. Larger interests of society must prevail while efforts should certainly be made to mitigate the pain of the few who may be adversely affected with reforms. |
| Those of us who in our individual capacity have some capability to influence the opinions of those who matter should use that capability forcefully. At this time, we need to build a momentum forcing change in political thinking and policy formulation, rather than merely wait for a change in government in 2009. If we do not do so this time, the loss will be immense not only in economic terms but, more poignantly, also shatter this very pleasant dream that many of us have been privileged to enjoy in the last few years! |
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
