PM Narendra Modi's meeting with top industry leaders Mukesh Ambani, Cyrus Mistry, Kumar Mangalam Birla, Sunil Mittal and others will not yield much unless he finds ways to push economic reforms in India.
What will PM Narendra Modi tell top industrialists like Reliance Industries’ Mukesh Ambani, Tata Group’s Cyrus Mistry, Aditya Birla Group’s Kumar Mangalam Birla and Bharti Airtel’s Sunil Mittal among others who will attend a meeting called by him in which the Reserve Bank of India (RBI) Governor Raghuram Rajan, top bankers, economists and senior government ministers and officials will be present?
Will PM Narendra Modi explain to them why he has failed to push critical reform statutes like the GST and the Land Bill, why has his government failed to clean up the tax and arbitration mess, and also why is he not able to take a decision on gas pricing or cutting the subsidies — and, seek their ritualistic support in driving investment which is not going to happen till the NDA government succeeds in improving the business environment — or, he will present a plan to capitalise on the global turmoil to attain higher growth?
The industry’s confidence on PM Modi about a turnaround in the government’s functioning and decision-making is waning fast, and these kind of meetings resembling the ones of former Prime Minister Manmohan Singh at the peak of policy paralysis during the UPA regime may not be of much help unless they are supported by concrete actions on the ground.
The 15-month record of PM Modi has been high on promises but low on delivery. The big-ticket plans — Make-in-India, Digital India, Smart Cities among others that have been announced — need policy support. How can a Digital India succeed until there is adequate spectrum support and also infrastructure to enhance broadband penetration?
Similarly, for Make-in-India to succeed, the government will have to find ways to improve electricity supply, land acquisition, tax administration and clearance processes both at the Central as well as the state level by working out a joint strategy through the co-operative federalism that he has talked about.
The reality is that the much-hyped co-operative federalism is yet to take off. If the prime minister is interested in change, he must start fixing timelines for various policy measures.
Thanks to the government’s say in the running of the public sector banks, the Jan Dhan scheme has succeeded in delivering impressive results despite strict timelines. Opening of about 18 crore bank accounts within 12 months of its start and over 40% of them getting seeded with Aadhaar is laudable, but this experience needs to be utilised to the full in delivery of the social sector spending and must be replicated in other areas.
Finance Minister Arun Jaitley has started the FY17 Budget-making process early and he has the opportunity to turn it into a package for removing bottlenecks for the industry and investment, and he might get good inputs from the Prime Minister’s meeting today.
There is no doubt that the Chinese slowdown and fears of foreign investors running away from the emerging markets need to be tackled on an urgent basis, but, this has also presented an opportunity for India to grow faster than other countries.
It would be interesting to see whether this meeting also turns out to be just a ritual or throws up solutions to grab this opportunity.