- World over, inflation is at an all-time high.
- Oil prices are shooting up.
- There is a shortage of Wheat and other food items.
- China has shut down its major cities in pursuit of its “Zero Covid Policy”.
- Experts expect China to be in some kind of a lock down till 2023.
- Supply chain disruption which started with Covid in 2020 is still on.
- US GDP growth rate this year is likely to surpass China’s after four decades.
- The World’s love affair with China is over.
- Russia’s Ukraine war is dragging on without an endgame in sight.
- US companies have pulled out or shut operations in Russia.
- Affinity for Globalisation is now fraught with “Conditions apply”.
- Almost all nations are seeking “Atmanirbharta” in some form or other without saying so explicitly.
- A Unipolar world with US as its vertex that existed for two decades since the end of Cold War has now withered.
So, if one looks around, the picture is not very rosy. Where does that leave with the much touted “India Story”?
I think that this phase of 2/3 years is most crucial for India that can make or break the India Story. And the reasons are as follows:
- Globally companies who had invested heavily in manufacturing in China are looking at de-risking from China. As a country with a huge population and therefore a source for cheap labour, India can fill in, if we get our act together quickly.
- We are largely English speaking in business and our systems are integrated with the world unlike China which has strong firewalls in place for integrating all systems.
- India has already proven its prowess in IT and IT services worldwide.
- We have a functioning democracy that provides inherent checks and balances where transfer of power happens smoothly as per the will of the people.
- We have a stable government in place now for the past 8 years at the Centre with a leader who is acknowledged and regarded worldwide.
- India is back on its feet after two years of Covid.
- With a large consuming domestic population, it is an attractive market for many corporations.
- India can be the magnet for attracting manufacturing investments in areas where we have core competency like Auto, Pharma etc.
- India maintains friendship and strategic relationships with big powers like US, Japan, UK etc…
In short, reasons which are all obvious and which we are all mostly familiar with.
For a world that is looking at options, India can be that next best choice if we get our act together quickly. And that is a big IF. Why is it so? History of India is replete with missed opportunities. Opportunities missed at times due to external geopolitical reasons but largely thanks to internal politics. Can this time be different?
I believe keeping aside what happened in the past, as an eternal optimist, things can be different if we played our cards differently. Towards this, I am suggesting a three-point agenda:
- Put economic prosperity and therefore growth at the top of the country’s agenda. Think, breathe, and act basis the same.
- This means that at the Centre, States and local level including WhatsApp groups, we must put a stop to all divisive agenda items. The country must focus single minded on issues related to economic growth. Today, at these crucial times, we are spending our time and attention on issues like origins of temples and mosques. I think we all know the origins of the temples and we don’t need to further spend time and resources to establish the facts. This is a needless distraction at this point of time for us.
- Centre and states must work towards this goal of economic prosperity as a team. Unfortunately, today, there is an atmosphere of Centre-state friction for which I believe both the Centre and States are responsible. On the other hand, if Centre and states co-operate and work together, I am sure the pace of growth can be fastened. Let me cite two examples to demonstrate my point:
- In Mumbai, one of the crucial Metro line projects is now in limbo because of the tussle between Centre and State over the location of the Metro car shed/depot. This is clearly unfortunate and there seems to be no sign of a solution to break the impasse.
- Last week, at the World Economic Forum at Davos, many of the states from India had individual booths along with a strong contingent to pitch for investments. This is indeed appreciable. But, what if, instead of states fighting among each other to attract investments, the Centre and states had worked a joint plan? What if we had a common India pavilion at a much larger scale with separate booths sector wise with participation from concerned states? I feel this would have made a much larger impact and will also ensure joint ownership in execution once a project is landed.
- Labour is indeed a state subject. But it is high time a common acceptable labour code is thrashed out between Centre and states and implemented asap. A GST council type labour council be set up asap to arrive at a consensus on this. I believe that such a labour council will also help to wade off local political opposition to changes in labour laws for all political parties.
- One of the key issues for attracting investments for manufacturing is making available land at reasonable prices. Again, a consensus among states and Centre needs to be arrived at for changes in the current land acquisition bill and implemented asap.
- In essence between the Centre and State what is needed is Co-opted federalism and not Competitive federalism. Dwelling too much on semantics like “Union Government” Vs “Central government” is just a sheer waste of time.
Author and Columnist T.N.Ninan in a recent piece in The Print says, “For India, economic disorder is a reality to be reckoned with, but it also presents an opportunity” and I agree completely. If we blow this opportunity, I am afraid that the India story will turn to be a Saas-Bahu type soap where the end doesn’t matter as long as there is some drama every day.