Five Steps India Must Take To Restore Global Confidence
Bangalore: The recent Global Competitiveness Report 2013-14, ranking India at No. 60, leaves no doubt that these are exceptionally dire times for the Indian economy. This World Economic Forum report of Sep 4 puts India 31 places below its emerging market peer China and barely ahead of Russia; it is India's lowest rank in this survey.
Concerns on India's lack of transport, information and communications technology (ICT) and energy infrastructure are "largely insufficient and ill-adapted to the needs of the economy". This is truly a reflection on India's lack of commitment to economic development.
The report highlights serious concerns voiced by Tata Sons Chairman Emeritus Ratan Tata last month, when he said: "We have lost the confidence of the world. We have been slow to recognise that in the government."
The current economic scenario is no less grave than the 1991 crisis. The government is in a state of policy paralysis. A trust deficit irks foreign companies in India. Economic growth tests a new low every month. Independent studies talk of rampant corruption.
The government in an Ostrich-like approach refuses to address serious threats, terming these as a momentary phase that shall pass soon. Economists and business groups call it a policy paralysis and leaderless politics.
The political will is at its lowest in the last few decades, operational efficiency of the government is analogous to the pre-liberalization era and there is visible negotiation for development between inclusive growth and economic growth. However, they ought to go parallel. Since India cannot remain impervious in this globalised and integrated economic eco-system, it has no option but to change and be dynamic in its performance.
The government cannot function on a low performance index for long; it has to be accountable to deliver and be responsible for inaction. The extremely poor Balanced Score Card of Indian government performance demands drastic change before India loses to lowest, if it is still in offering amongst emerging markets.
Here are a few macro-level actions to fix the situation, to arrest the fall and to reverse the depressing escalation:
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