After stewarding the Indian economy to its highest-ever economic dream run of eight years, our economic managers are now suffering from a never-seen-before hubris. Instead of pushing the pedal on accelerating the growth rate and through it jobs, they sit back in the glory of a fast-fading past.
By being unable to take either the Opposition or their allies into confidence over vital reforms that can bring the India story back on track, the Congress-led UPA is frittering away all goodwill, all expectations that it has accumulated since 2004. In the process, it is watching India’s biggest-ever growth opportunity fade into a could-have-been.
What can it do? Here are 10 ideas.
10: Put political might behind the Land Acquisition Bill and convert it into a law that allows those losing their land to get a more-than-fair and long-term compensation, companies to create jobs and wealth.
9: Open pipelines to infrastructure development. To prevent allegations of corruption, establish an independent PPP regulator who’s also effective and not merely a sinecure for ageing bureaucrats.
8: Right to food is important --- no Indian should sleep hungry --- but without agriculture reforms, it would simply burden a slowing economy. For starters, free the farmer from the tyranny of middlemen, by reforming the rent-seeking, anti-farmer mandi system, at least in states governed by the UPA alliance, thereby creating a demonstration effect, where other states would be shamed into following.
7: Pull out the rural people out of agriculture by giving manufacturing a policy push. Create an atmosphere where entrepreneurs are encouraged to set up units that serve the world and which can absorb the surplus labour --- agriculture contributes 14% to GDP but 60% of Indians are dependent on it.
6: Aggressively build a regulatory infrastructure to oversee the urbanisation that will follow as the world's largest migration happens over the next 10 years, when people move to India's cities from its villages.
5: Play diplomatic cards to our advantage --- not any superpower's --- and ensure long-term energy security, an essential component for a double-digit growth.
4: Create political consensus on three key reforms --- one, Goods and Services Taxes Bill to ensure tax efficiency; two, Direct Taxes Code Bill, that will end all uncertainty on taxes; and three, allow foreign large retailers to come in by opening the sector to foreign direct investment.
3: Show global capital a little more respect. Reserve the right to make retrospective tax laws --- as all nations do --- but don't use it until India achieves a scale where it can afford to, a GDP of say $5 trillion.
2: Bite the bullet on interest rates and cut them drastically, so financial costs don't deter companies from expanding and households from continuing to drive the GDP growth through India’s famed consumption story.
1: Finally, deliver better governance. Let not the greed of the few overshadow the needs of the many. Make corruption a zero-tolerance zone.