India time to rebuild

Date:   Saturday , June 28, 2008

Congratulations on our country’s 60th birthday, a middle age by traditional measures for us humans, for India it is the start of its youthful generation. With over half of the population slated to be in the age group of 15 years to 25 years old, it will be by far the single largest group of youths anywhere in the world.

The challenge for the India of tomorrow is to channel the energies and ambitions of this youth into making India a modern and developed nation. Although India has been on rise for nearly a decade now, its growth has been primarily fueled by the service industry enabled by the flattening of the ‘always on’ internet connected globalized world we live in today. But just having a few million engineers employed in the IT service industry will not make India the strongest economy at the end. To feed, clothe, shelter, and educate its remaining billion, India need to build a stronger and sustainable growing consumer base by drawing out the rural population to participate in its economic growth. To achive this, besides education, there is an urgent need to rebuild the country’s infrastructure—to meet the basic needs of its citizens’ like adequate and clean water, electricity, medicine, houses, and air; and equally importantly to build the necessary infrastructure—roads, highways, railway lines, airports, seaports, ship building, etc. for enabling cost effective manufacturing, necessary to provide employment to tens of millions of non-IT, non college degreed youth coming up on stream.

No large nation in the history has built itself to greatness by skipping on the responsibility of building a large base of employment in hard core manufacturing industry and India cannot assume it can leapfrog itself without engaging in it as well. It is the only industry where eventually hundreds of millions can be employed with low skills and pre-school education. The purchasing power of these millions can be the engine that can continue to keep our economy growing at ten percent GDP for next 50 years and even longer. But to make India a one stop shop for building world’s emerging needs for all types of household products from furniture to cooking appliances, from automobiles to laptops and cell phones, from Televisions to all types of media entertainment gear—we need to become the lowest cost producer in the world. Even though our cost of labor for manufacturing these goods is very low, in some instances lower than that of China, the overhead of increased cost in transportation, due to poor infrastructure, is preventing India from playing well in this huge and vast market.

India has clearly seen the potential of the private entrepreneur. Given the reformed environment for investment, Indian entrepreneurs from Narayana Murthy to Sunil Mittal have amply demonstrated their acumen to build large companies and successfully compete globally, while competitively meeting the domestic needs of the country. Now is the time to arm the private Indian businesses with the mandate to build a world-class infrastructure to make India a modern nation that it deserves to be by 2020.

The leadership for opening up the floodgates of private ownership in building roads, freeways, highways, ports, and townships lies first in the hands of our top political leaders and bureaucrats. We must put these reform processes on fast track. There is no reason,to take 3 to 5 years just to give approvals for building the essential airports in the capital of our nation and big cities like Mumbai. We must move far more speedily and cut down the red tape; we do not have to allow the nation’s progress to be hampered by the age-old infrastructure that is badly in need of refurbishing across the nation. The building of a new infrastructure alone can gainfully employ the tens of millions of illiterate people and contribute to continuing a strong economic growth for decades to come.

I believe our leaders should make this the first priority for our nation. The central government should play a key role in rebuilding our country and entrust the private industry with the mandate for constructing the vital infrastructure network of modern India.