Today…………. every board room across the world speak about India. NRI’s wants to return back to India and become entrepreneurs. Business house’s want to have their presence in India. Income levels have risen. Aspirations have risen. A brand new India has risen.
"My only regret is that I am not 20 years younger because I think India
is going through a very exciting period in its history"
- Ratan Tata, 2011.
This has been the great Indian growth story.
But………. back in 1991, the economy was all time low. India had to pledge gold to infuse funds into the ‘kajana‘, which too got exhausted within the next six months. And India was seen as a bottomless pit for foreign aid. And India was just 40 days away from going bankrupt. With assassination of Rajiv Gandhi, things went from bad to worse.
Pamulaparti Venkata “Narasimha Rao” who almost retired, had to return back into politics to lead the minority government as the Prime Misnister. As the socialistic model was collapsing, he had to bring in a papradigm shift, which he did. He opted for the market oriented reforms. And his master stroke was to appoint a non-political reformer in the form of Dr. Manmohan Singh as the finance minister of India.
If today Dr. Manmohan Sigh is regarded as the father of modern economic liberalization, then P.V. Narasimha Rao is its Grand father.
Rao held the industrial portfolio with himself. He devalued rupee. He took away industrial licensing and MRTP clearances. With this the biggest hurdles to industrial expansion was dumped. He put a full stop to the dreaded license raj once and for all. He made the delicensing announcement on the day when Manmohan Singh presented his first budget. This made Manmohan Singh to be seen as the reformer, while Rao took the back seat.
Meanwhile Singh reduced the import duties, corporate tax and income tax. Foreign investment was liberalized and import of technology was freed. And he initiated the process of privatization of public sector companies.
Both Rao and Singh implemented policies to free up the economy and change India’s socialistc face to capitalistic one.
Twenty years later, about 300 million people—equivalent to the entire population of the United States—have escaped extreme poverty. The fruits of liberalisation reached its peak in 2007, when India recorded its highest GDP growth rate of 9%. With this, India became the second fastest growing major economy in the world, next only to China. Guess what?? nobody imagined it 20 years before.
All these policy changes brought in by Rao and Sigh was heavily criticised and was opposed. Opposition even came from the congress party itself. Yet Rao had the political chavunism in him, to get the bill through. But the goverment was shown the door in 1996 elections. Yes!!! this was the govt which worked for the welfare of the peple and not with the intention to get votes.
Comming to the current situation. If for the west, it is osama, obama, eurozone and inflation, then for India it is corruption.Corruption is hindering our growth. To accelerate growth, black money has to brought in as quickly as possible. Wellh….welll…..well… I do not beleive in such statements. FYI, countries have developed not because they dont have corruption but despite the corruption they had. It is the Anna Hazare’s , Baba Ramdev’s and the media to sensationalize it. But the truth is, corruption in India has come down. Well…dont beleive it!! Then check it.
If the great Indian growth story has to be sustained then major reforms must be done in the following stuffs……………….
1. Energy 2. Labour reforms 3. Infrastructure development 4. Education 5. Land reforms
Energy Reforms
The most important area of reforms is perhaps India’s power sector. Virtually no sector of the economy—industry, agriculture, or services—can achieve successful transformation without adequate supply of power. The power sector has been a government monopoly at the state level and suffers from proverbial inefficiency including large-scale thefts of electricity in almost every state. Reforms involving privatization of power generation and distribution should be be undertaken. This is the area with highest payoffs for imaginative reforms.
Labour Reforms
Second, Labor laws must be reformed so as to restore the employer’s right to layoff workers upon adequate compensation to them. At present, firms with 100 or more workers have no legal way to exit, since they cannot lay off their workers. This works as a major barrier to entry of new firms on a large scale: they hesitate to enter into a world that has no exit doors.
Infrastructure
Infrastructure is another important area of reforms. Roads, railways, and ports all need expansion as well as improvement in the quality of service. Cold chain storage network has to be established and ensure that food grains are not wasted away in logistics.
Education
Lakhs of students are graduating, year in and year out. The quality of the students and their employability is debatable. Reforms should be brought in, to improve the quality of the over all education system. More over, quality primary education should reach the nooks and corners of our country. Universities in India also remain a state monopoly. With the need to cut the fiscal deficit, the state has no resources to spare. Therefore, like most other countries including Bangladesh and People’s Republic of China, India must allow the entry of private universities.
Land Reforms
The plight of people, losing their valued land due to developmental purposes should be taken care of. They should be paid double the land value. This land reform is very important.
Finally, the reform of bureaucracy is essential. The problem of a bloated bureaucracy and the need for downsizing it is well recognized. But with policy making becoming an increasingly sophisticated and specialized activity, it is necessary to open the top bureaucracy to outside specialists.
These are the very stuffs, the government should work on. Without reforming these, if the issues of corruption and black money is solved, it is of no use, as the progress the progress of the nation would be dumped.
Well, yes corruption is an issue but it is not the only issue. Moreover, it is not as big an issue as it is being portrayed.
Dear Hazare’s and Ramdev’s, we also do have strong anti-dowry laws for your information. So, has the dowry in India reduced??
Dear Media, please dont write/telecast anything less or more than what it is required.
India is young. India is restless. And we Indians, want to fly high. Sooner, we need to become the fastest growing economy in the world. Our aspirations are higher than ever before. This is the real Brand India. Let us not camouflage our Brand India image under the word Corruption. Let us be responsible citizens.
Jai Ho!!!!
