India today and tomorrow
Date: Wednesday , August 29, 2007
From one of the poorest countries in the world with a highly regulated business regime, we seem to be freeing ourselves from the shackles and become a forward looking, growth oriented economy. Poverty is decreasing but, but at a speed that is far insufficient. We need to bring depth to our reforms process so that it seeps to the poor man in terms of education, jobs, and an increase in per capita income, etc.
Some of the things which we have make us a great country - a vibrant democracy, flexibility, religious tolerance, youthful demography (versus some other countries that are baby boomers), and a great desire to succeed. What we still lack is the combined vision on several fronts including infrastructure, anti-corruption drive, and competitive positioning. Be it water, electricity, roads, ports, or airports we need several times improvement over what we have. Corruption is absolutely undesirable but it is everywhere in the world. What we need to follow is the Singapore Model that has ‘zero tolerance’ for corruption so that it is no longer institutionalized and the country gains some respect in global markets. On the competitive positioning, I personally find that India is much more expensive in everything except labor at the quality parity and we need to work hard to change this situation.
One of the ways to expand job opportunities to the poorest is the growth of sectors like manufacturing, agriculture, and fisheries. Unfortunately we have not done so well in this area, compared to countries like China. Without the infrastructure basics like roads and ports, even if you have world-class manufacturing or farming, it is not going to be possible to have the goods reach at the right time at the right place. Global markets are too tough and there is no scope for error. But the growth rate of infrastructure in India is still dismal.
I remember the days when the telecom minister used to take pride in the fact that India had the lowest density of phones because it was not possible to provide phones to crores of people and waiting lists used to be years long. After privatizing, India became one of the fastest growing markets and it has created hundreds of thousands of jobs, lots of wealth, as well as opportunities in ancillary industries. We should ask the same minister, how is it possible now to give a phone connection to anyone who wants it in just 2 hours instead of years of begging with telecom department? Same thing holds good for electricity, water, roads, airports, and ports as there is a desire to pay for quality and there is huge need for the same. But the regulatory regime still slows everything down in spite of the ‘so called reforms’.
I have been to over 40 countries and one of the important worries I have is that India is getting too expensive for comparable quality of goods, to the exception of labor. I can find an equivalent hotel in London or Tokyo cheaper than it is in Delhi or Bangalore, and so on. The cost of a lunch in a hygienic restaurant here exceeds that of a lunch in a similar restaurant in the developed world. Cost of hiring a car (obviously with a driver as you can’t drive yourself due to the poor infrastructure conditions) can be much higher than that in the U.S. In the competitive countries’ ranking we continue to be in the bottom ten, being less competitive from cost-productivity stand point. Our government and businesses need to take cognizance of the same and work on it to change the situation.
Anywhere in the world, Indians stand out as exceptional people with their intelligence and work ethics. We just need to work on some of the things at our end to make India one of the most competitive and powerful forces in the world. Eradicating poverty to a considerable extent and removing the stigma of ‘corruption’ are important.
I believe that our increasing middle class population and its spending power could be a boon to the country rather than a curse if the Government truly provides good governance and improves some of the things that I just talked about.
In spite of having lived outside of India for 12 years, I take a lot of pride in being an Indian and my pride continues to increase every moment.