What India needs is a high double-digit growth rate
Over the past decade, India’s growth story has unfolded to global acclaim, yet widespread disparities in income and access still plague the overall economy. The goal, therefore, must be a consistent double-digit growth, writes Shailesh Haribhakti.india Updated: May 24, 2010 22:09 IST
Over the past decade, India’s growth story has unfolded to global acclaim, yet widespread disparities in income and access still plague the overall economy. The goal, therefore, must be a consistent double-digit growth.
Our economy is largely hamstrung by a lack of infrastructure, broad-based access to education and healthcare, and a shortage of power. So, the recent appointment of a panel headed by Deepak Parekh to raise a $11-billion infrastructure fund is a welcome step.
For inclusive growth, we need to immediately build at least 50 airports, 25 ports, one million houses, 100,000 schools, 50,000 hospitals, and 500 flyovers, in addition to ensuring efficient occupation and utilisation of all the commercial real estate capacity that is already online.
Also needed are 10 gigawatts of power, 200 million mobile connections, 100 million broadband connections and an orderly evacuation of mined coal, iron-ore and bauxite.
It is important to do this in a targeted and immediate manner. For this, we need:
* A genuine government-industry-people partnership
* Suspension of old mindsets
* Energetic execution
To achieve the above goals in the near-term, every state government must pre-clear all projects applied for. If the states do this for just 90 days, India will have a bank of pre-cleared permits that can be auctioned in no more than a week, just as all the permits for multi-billion dollars of debt and the entire issue of IIFCL bonds were sold in three hours of the announcement of their availability.
The accruals will give a few states a revenue surplus, and many more states could become revenue surplus with the indirect taxes.
Having paid for the permits, implementing agencies will deploy the best technologies to speed up execution. Pre-built, factory constructed, simply assembled, high reliability, green-ready, frugal construction — all these will become part of the vocabulary in India.
The country also needs to jump out of its scarcity mindset to one of ‘abundance' fuelled by its new-found size ($1.31 trillion GDP), better currency valuation, high growth rate and a population with the best demographics (over half-a-billion in the working age group).
If we are continuously reminded that we are globally the lowest cost producer of telecom and IT services, cement, steel, carbon black, bicycles and a host of other products and the recipient of the highest remittances ($ 49 billion), the mindframe must alter.
The enablers are in place, the money is available and technologies can be mastered and harnessed. The synergies of effective partnering, a changed mindset and our inherent capabilities will drive energetic execution. What is left is to get on to the path and not look back.
The writer is a chartered accountant and chairman of BDO Consulting