India is destined to rise as an economic superpower but it must get rid of the past baggage and put its house in order by cutting an extra flab

The Indian nation is at a crossroads. While the world is going through a phase of undeclared economic recession, worsened and complicated by Covid-19 and now by the protracted war between Russia and Ukraine, India's economy is stable and growing the fastest. But our economic progress is far below our true potential.

India is a gifted nation from the point of view of natural resources and bounties as it shows a latent potential and promise for high growth-even in the adverse circumstances outlined above. The inherent potential for the explosive growth of the economy is even today strikingly visible.

The slowdown in India's economic growth from 2018 onwards was seen in the wake of persisting clear deficits and lingering gaps in infrastructural facilities, the slowdown in consumer and industrial demand as also a sharp decline in manufacturing output. It is also not difficult to see that India has not achieved substantially on the economic front - in terms of parameters of growth employment generation, manufacturing, and exports. 

Systemic changes are meant the changes in our constitution and the governance frameworks that derive from the constitution. Our vertical hierarchy type bureaucracy is by far the worst type of system for the administrative functioning of governments and governmental institutions of a sovereign nation. It is exploitative and attaches to the senior members more authority and less accountability. This type of bureaucratic structure was devised by the British to continuously plunder India and, alas, this structure is being followed by the extant governments even seven decades after independence.

We are certainly not seeing the best from our PSUs whose share in our economy is 15 percent but who drive the growth of small and medium enterprises significantly. Some of them like BHEL have lost heavily on the order book while others like MTNL and VSNL have gone deep into the red.

The fallouts of the wrong structure of governments are not confined to PSUs. They percolated deep down into private sector business houses controlled by them and the whole set of SMEs (small and medium enterprises) governed by them.

Despite what the ruling NDA says, the government is also in the business--of governance. Yes, the business of governance is not profit-centered. But it needs essentially the same techniques and methodologies that are employed in the commercial world of profit. It needs perseverance, honesty, transparency, and accountability to serve its purposes well. It needs professionally sound, foolproof systems that will establish discipline and efficiency. It needs economic and fiscal discipline like any commercial business. Changes and reforms, howsoever well-intentioned, will deliver beneficial results only if the implementing laws and machinery are appropriate.  These are the very reasons for the failure of the government to attract FDI and Indian private sector investment for Make in India. Regrettably, the Swadeshi bandwagon of RSS was given a go and foreign companies like Amazon continued to devour the domestic retail sector thus closing the shutters on retail outlets in huge numbers.

While talking of the archaic laws and systems of administration in India, it would be necessary to mention that these are the reasons also for the slow growth of the infrastructure, marked by poor investment therein by the private sector. The obsolete Land Acquisition Act, Indian Police Act, Civil Services Act, Indian Penal Code, etc. were never designed to serve the interests of a sovereign India and need to be recast sooner than later.

Hence, we must create perStructural and administrative changes as suggested above will give a quantum boost to indigenous manufacturing which is the engine of economic growth. They will speedily enhance India's share of manufacturing in GDP which is tottering at 15 percent over the last 10 years.

While dealing with China as an economic competitor, it should be clearly understood that today, the average cost of goods and labour in China has soared to 6 times that of India, despite its government's action to keep inflation under check-by restricting the money supply. Such action by the Chinese government has created a big ballooning debt crisis which is a huge growth dampener. Moreover, Chinese exports still thrive on high subsidies by their government. China is also suffering from the heavy costs of coal imports due to its rising prices and this situation has created a power crisis leading to shut down of many industrial units in recent times. India is at an advantageous position regarding its manufacturing cost competitiveness vis-à-vis China today. This provides verily the best situation for India to exploit.

Many strategic steps can be suggested to give a boost to India's economy in various sectors. Investment in value-added food and agro items, in our traditional healthcare system of Ayurveda, and tourism will pay us rich dividends considering their potential in the current global scenario. But the bottom line is that we must reform our systems of administration and judiciary in line with the radical constitutional reforms cited above.

With such changes, we shall see a new India emerge fast which would be the leading economic superpower-and not for the first time in global history.

(The author is a Management Consultant and a freelance writer on subjects of economics, development and governance. The views expressed are personal)