For this to happen, GDP growth and the economy have to be treated and run like a corporate house, hungry and lean
Prime Minister Narendra Modi and top Cabinet Ministers have spent the last fortnight talking to numerous stakeholders and potential investors across the globe and at various fora, trying to convince them that India has lifted the shutters and is ready for business. Nitin Gadkari, Union Minister for Road Transport & Highways and MSMEs, has talked about potential opportunities for investors on the Delhi-Mumbai, Delhi- Meerut highway corridors, the linked and now commercially-available waterways and has gone on record to promise daily, weekly and monthly returns from investments in India’s infrastructure. Similarly, Minister of Communications, Electronics and Information Technology Ravi Shankar Prasad has announced an ambitious production-linked incentive scheme for large-scale electronics manufacturing firms, with potential financial incentives and sharp focus on high-value, globally-produced components of mobile phones and air conditioners.
Modi himself, at multiple fora and one-on-one conversations with top CEOs, has made a strong pitch for refuelling India with upgraded, long-term investments for a brighter future for enterprises and the global world order. Much of this effort has been made to keep the money coming in for Finance Minister Nirmala Sitharaman, who has been trying to find alternate sources of revenue during one of the biggest economic slowdowns India has seen in recent memory and to ensure that the State fulfils its commitment of providing basic amenities like food and medical care to a large section of the population. These efforts are the need of the hour for India, which is faced with the dual challenges of a raging pandemic and military/economic ambush from an aggressive neighbour, China. And there is still a large track left to be covered to become a larger than $5 trillion economy in a very short period.
So, what can be done? To begin with, GDP growth and the economy have to be treated and run like a corporate house, hungry and lean. Some may argue that it could lead to overlooking the welfare of a vast majority of the population. In a democracy, this could lead to uncomfortable questions in Parliament at a time when elections in some States are around the corner. While I won’t comment on the latter part of the argument regarding the politics behind stalling growth projects, the fact remains that there are many enterprises and cooperatives around the world where sustainable development of employees has gone hand in hand with healthy business growth.
To take an example, the Government has access to a vast amount of cash. It can very well enter into minority shareholding or profit-sharing arrangements with private fund managers and sovereign wealth creators, who can be tasked with bringing in high-value returns in a relatively short span of time. Of course, the challenge would be to put the perfect agreement papers in place, as too tight controls on managerial capacity could lead to efficient fund managers losing interest. On the other hand, too less control and the Government could be pulled up for corruption and collusion with wrong parties.
Second, the Government can again, by strategic choice, pick up a bunch of real estate and infrastructure projects stalled across the country due to lack of funds or slowing demand (even before the covid-19 crisis began). The Government’s track record of taking up construction has been much below market standards but it can make a fresh start by bringing world-class builders and infrastructure specialists on board. A leading example of bringing efficiency by smart partnering and teamwork is Delhi Metro, where both the Central and State Governments have an equal ownership but the money to build the 489-kilometre suburban railway network has come from Japan. The corporation thus formed runs with 10 nominees from the State and Central Government and eight (including the Managing Director) full-time Directors. What it ensures is equal say for most stakeholders and also brings the necessary momentum behind the wheels to tunnel through the toughest and most congested lanes of Delhi.
In a similar approach, Smart City, a pet project of the Government that is in tune with Digital India, can be broken into smaller self-sustaining, futuristic enterprises with an independent Board of Directors, equal nominees from the Union and State Government-concerned and a full time professional CEO (with a competitive salary to begin with). This team of approximately 20 people will have the task of converting an available chunk of land and its civic amenities into a global, high-tech piece of excellence, while empowered to raise funds for itself.
Modi has often been praised for his respect for the bureaucracy and bringing in the right talent for implementing projects on a mission mode. If he and his talented team put their mind to converting Smart City projects into globally-marketed profitable ventures in a relatively short span of time, it could be a game changer. It could help the country to come out of the current economic crisis and turn it into one of the biggest opportunities for the nation.
(The writer is a policy analyst)