India has always been proud of being a democratic country. A combination of young and not-so-young entrepreneurs, who have infused billions of dollars of funds and global technology, has helped give millions of unutilised human resource employment, to build the India of today and for tomorrow. Let us accept that industrialisation and manufacturing is here to stay in India, and is a large contributor to the economy.
The year 2013 was reminiscent the era of 1990s when India faced its second economic crisis, but also saw the dawn of the liberalisation of the economy. Opening up of foreign investment, liberalisation in industrial policies to give impetus to growth, disinvestment of under-performing public sector companies, and similar policies were seen as an opportunity to give a much-needed boost to the economy. The formula worked in favour of India and the country not only came back to its growth path but also became one of the most preferred destinations for foreign investors.
Today, India needs strong global confidence in relation to its policies, commitments and government support. At one point, justice could even be denied, but justice delayed paralyses the industry and the economy.
The year ahead, 2014, is being seen as one of hope and revival. The industry is looking forward to a speedy disposal of proposals and clearances. Agenda that could lead to not just creation of strong infrastructure but also result in massive employment generation leading towards eradication of poverty are being proposed. We will discuss a few salient features that could help India move pas the impasse of last year.
Disinvestment for growth
When companies like L&T, ICICI and HDFC can run world-class organisations without being owner-driven, why cant the 250-plus state and central government-owned companies These PSUs too can follow the example of the aforementioned private sector giants to create huge value for themselves. Why should the government house-keep these companies It is time that 51% shares in the PSUs are sold to the public who will then hold the management accountable for companys performance. Ultimately, the government should be looking to divest further, and hold 26%. More so, the government should divest to an extent where no one has more than 10% of the shares. This move alone can create at least 50 million jobs that will change the face of modern India.
Auction natural resources in the revenue-sharing model
No country in the world can develop without manufacturing. The contribution of manufacturing in GDP and GNP cannot be ruled out. At one point, countries like Brazil, Canada, Australia and those in Latin America were on a par with India when it came to utilisation of natural resources. Today, these countries have moved far ahead and we have remained stagnant. The fall of GDP growth can be attributed largely to the sluggish growth of manufacturing in India. Further, in states where manufacturing drives growth, the economy is in shambles, thanks to the artificial shortage of resources.
How long shall we hoard these natural resources There has been no large bauxite mining in India in more than 35 years. Gold and copper mines are awaiting to be explored, in spite of the Supreme Court judgment to open up the sector. Having our own reserves and resources, and then spending billions on their import makes no sense. As much as 3,000 million tonnes of bauxite remains unutilised in India. How long shall it stay that way
In Goa, it is a matter of survival for over one-third of the states population. The mining ban has paralysed almost 20,000 trucks. But the biggest loss is to the economy, with the loss figure touching R25,000 crore. The loss of over $6 billion on account of the ban on iron ore export from Goa alone has been one of the major factors responsible for compounding the current rupee crisis.
We can keep these reserves for another 100 years, but ultimately, their utilisation is necessary to benefit the very citizens whose interests we are purportedly protecting with the ban. So, auction these natural resources in the most transparent manner with simple policies and allow them to be used in the most sustainable manner so that it helps in strengthening and rejuvenating the economy.
End public sector-private sector discrimination
Discrimination between the public and private sector companies hurts business sentiments. Where ONGC has been allowed to explore shale gas, the private sector is still awaiting approvals. Even in iron ore, in spite of mining ban in Goa and Karnataka (Karnataka has now opened up partially), NMDC has been finding iron ore mining easy. In the transmission business, PGCIL is reaping the advantage being a public sector company while the private companies are struggling. The example of Nalco is even peculiar. Nalco is exporting alumina at a rate that is much lesser than the rate offered by domestic companies which are struggling for the want of this raw material used for making aluminium.
The public and private sector are both involved in building national projects so why such discrimination. Ultimately, the country is more important.
Commit to the interests of the future generations
India is home to the largest number of children in the world, and also home to the number largest malnourished children. Being a citizen of India, I feel it is my moral duty to ensure a secure future for these children. The 14 lakh government-run anganwadi centres need a complete transformation. Infrastructure, education, water and sanitation facilities, hand-pumps, solar energy for running teaching equipment, sufficient nutrition, and regular health check-ups are necessary for the future of these children. Bring in public-private-partnership (PPP) and let the corporates build a time-frame agenda to address these issues. The government sanctioned R1,29,000 crore in the budget and this only shows its seriousness in dealing with this issue. It is a mammoth task and we need a well-crafted approach in a time-bound manner.
Promote liberal arts and tourism in India
A substantive part of the population in the US has adopted liberal arts as a full-time profession. In India, we are yet to be convinced about the liberal arts stability as a career. As we have grown into a culture of fear and uncertainty, we look forward to guaranteed employment. The world has moved ahead and adopted liberal arts as one of the most sought-after professional careers while in India, it still needs to be promoted.
Second, lately, India has been witnessing a fall in tourist numbers. A country which has been attracting about 6 million tourists every year has enough potential to attract 10 million. Rajasthan, Gujarat, southern and eastern India have been the most sought-after destinations for domestic as well as international tourists. Each of these regions have rich history, culture and heritage which attract about 3 million tourists ever year. There needs to be a concerted approach towards the promotion of tourism in India.
The world is looking at us and we have a lot to give to the people of India. One strong step and one decision is what the country needs today. Together, we can make a difference and we can build a nation. Both the government and the private sector need to sit on the same side of the table for development and for the people of India.
The author is executive chairman, Vedanta Group