2015 should be the year India gets de-bottlenecked
The New Year should be about visible governance, better management of resources, and transparency in interface, writes Pawan Munjal, vice-chairman, MD and CEO of Hero MotoCorp Ltd.ht view Updated: Dec 30, 2014 01:01 IST
It is always wise to look ahead, but difficult to look further than you can see, former British prime minister Winston Churchill once said. Given the sudden and sweeping changes that we got to see in 2014, it would be both unwise and difficult to look very far ahead into the New Year.
For example, last December, who could have forecast that in five months' time, India would have a single-party majority government; or that crude prices would crash to less than $60 to a barrel in a year.
For a change, the unpredictable events of 2014 have worked to the country's advantage. There are prospects of stagnation in Europe and evidence of a sharp slowdown in China. In contrast, India could grow in excess of 6% by next year, aided by the revival of stalled investments filtering back into the financial system.
The fall in crude prices has given India the much-needed headroom, while the changed political equation has injected traction and mobility. If a greater purpose and braver decision-making set new paradigms, perhaps the days and months ahead will indeed see acche din in India.
Through 2014, I travelled extensively both in the West and in China; I saw world-class infrastructure and glitzy malls even in smaller towns and cities. Inside, though, there were few customers because of low demand and unfavourable demographics. In India, the situation is just the opposite: The hinterland is less developed, but a large and young population ensures quick commercial activity once the production and investment cycle picks up.
In August, a mainline newspaper asked me to draw up a report card on the first 100 days of the Narendra Modi government. I made three observations: First, India's priorities in 2014 were the same as 50 years ago - to provide bijli, develop sadak and ensure the supply of paani. Second, this government's ability to manage expectations would shape its success. Finally, I said that good ideas were not enough, a strong resolve was required to convert television bites into actionable points.
Now, as we head into another new year, I am heartened to see policy resolve. Visionary and 'doer' leaders now manage the crucial railways and defence portfolios. The prime minister has energised the bureaucracy to the extent that I run into very few of them on the golf course these days.
There is finally some traction on the Goods and Services Tax (GST), as the Union finance minister seeks to resolve disparate views with practical give and take. There is renewed attention on roads, and a number of contractual and environmental glitches have been resolved.
Long-pending pieces of legislation are seeing the light of day though still not at the pace we would like to. Yet, the changes are important; for instance, the recent amendments in the Apprenticeship Act might help in making our workforce more dynamic over time.
There have been a few clever geopolitical manoeuvres, and I was witness to some of these when I accompanied the prime minister to Japan. India has very strategically tweaked bilateral deals to its advantage on the nuclear front. Our country will soon be making advanced submarines on its own. This will not only reduce India's import bill, it should also be able to create an entirely new class of manufacturing-related jobs.
Far-reaching though these moves might seem, they need to work effectively on the ground.
For example, to get national highways and rural roads going, crucial changes are required in the Land Acquisition Act. Likewise, a GST rollout should enable a goods truck to drive through states and municipal territories without paying bribes under the garb of inspections.
The leadership's resolve to make India one of the world's top 50 places to do business in is one thing; making it happen across far-flung states, districts, small towns and mofussils and departments is quite another. In September, the Centre announced that labour inspectors would have fewer discretionary powers, and that inspections would be computer-driven. Now, my only wish is that the saved bribe money is not spent on securing a no-objection certificate from the fire department or the horticulture department.
Like businesses, citizens too need effective governance. A high-profile Swachh Bharat Abhiyan (Clean India Campaign) is no substitute for functional garbage disposal municipal trucks; likewise, a smart-phone app is no substitute for a properly verified cab.
This government came to power on a wave of hope. To ensure that it does not buckle under the tidal wave of expectations, it must get the small things right.
The year 2015, therefore, should be about visible governance, better management of resources, and transparency in interface. The focus should be on eliminating all the root causes holding India back. Let the world look back and remember 2015 as the year in which India got de-bottlenecked.
My final leitmotif for 2015 and beyond would be to encourage all of India - and not just parts of it - to shoulder the responsibility of growth.
According to a recent data projection by McKinsey, more than half of India's GDP growth between now and 2025 will come from just eight states (Gujarat, Haryana, Himachal Pradesh, Kerala, Maharashtra, Tamil Nadu, Andhra Pradesh, and Uttarakhand) - these states are home to just 31% of the country's population.
Until the 'other' India - where 69% of the population lives - is hand-held towards the path of growth, this country will struggle to cross the bridge that separates developed and developing nations.
Our leaders often glowingly speak of India's glorious past. With the same fervour, they must now energise people from across the nation and work with them to create a glorious future. I have no doubt in my mind that the government is absolutely committed to deliver on each of its promises, so we need to be a little more patient and give it more time.
2015 may just turn out to be a watershed year for India.
(Pawan Munjal is vice-chairman, MD and CEO, Hero MotoCorp Ltd. The views expressed by the author are personal)