I for one have not fallen prey to the gloom that surfaces from time to time. It is worth appreciating that the intentions of the Centre and the course chosen by it stay true to the development and livelihood-led aspirations of millions.
But the enormity of the task demands that we frequently assess the status and lend support through constructive suggestions.
Available data or arguments soothe us into ‘satisfactory’ comfort zones, but we also have data — be they business or financial performance pains or lack of creation of meaningful and sustainable livelihoods — of simultaneous ‘underperformance’ zones.
Charting the path
In the year 2000, Sumantra Ghoshal and other experts conceptualised a phenomenon they termed “satisfactory underperformance”. Ghoshal argued that this trend is pervasive in India and gets embedded in the culture and, consequently, in organisations and systems. This entrenchment is one rational explanation why the efforts are not delivering results at the speed we desire or need.
Since the Budget is around the corner, many writers have articulated the need for a “bigger bang”. But I also reason that the Budget by itself is not the comprehensive instrument through which all elements addressing strategy and implementation are addressed. However, the Budget speech can be made significant in charting the path ahead in terms of revenues, investments, spending and fiscal administration.
So we must keenly await articulation of a wide-ranging but grounded action plan that businesses and citizens can reasonably look forward to, covering the next 3 to 5 years. I throw in some ideas.
One possible structured presentation is by way of outlining sectors likely to attract investments — from government, private business or FDI — and estimate the resulting creation of livelihoods by the sector over the next 3 to 5 years.
In short, find a good way to connect fiscal thought and plans to employment in the mind of the average listener, at the same time set up internal metrics linking job creation to investment.
Can we think of suo motu issue of PAN cards to Aadhaar holders (92 per cent of the population)? No liability for tax or filing of returns is suggested, but why not regard such an exercise as a parallel to creating zero balance accounts, and see what the future holds?
Can we substitute the usual incremental expenditure budgeting by zero-base budgeting for material government spending (going beyond expenditure commissions or the like)? India will soon be left with no option but to find ways to protect its industrial base from external onslaught without violating international obligations. Without being protectionist in principle, we have to find ways to shield local manufacturers in key industries, whether through tariff or non-tariff barriers. This budget is now the twilight opportunity.
Of confidence and logic
Despite many positives around us, average citizens are hard-pressed to recognise where and how their lives have improved compared to, say, five years ago. Are small businessmen excited about where they are going? Is the average housewife happy, even if inflation is generally under greater control? Are consumers exhibiting confidence in their own earning stability that allows them to spend while making long-term commitments? Is the next generation on farms clear about whether agriculture will keep them afloat in the coming decade?
Citizens’ faith in the present is essential to building trust. People are seeking real answers beyond policy and perception. Therefore, the more factually reinforced the message, the better will be the outcome in building confidence.
How does one address the inherent concerns of business investors? If one has to wait until the ‘ease of doing business’ numbers published by international agencies look good, it may be too late to achieve meaningful outcomes in the next 3to 5 years (investments take a few years to deliver). The strong signal that the Centre is very serious is necessary but not sufficient to push investment. Intent has to be backed by demonstrable outcomes.
Meanwhile stronger messages from the top will only help drive positivity. In my opinion, there is great merit in Sunil Mittal’s statement from Davos that just the way the Prime Minister promotes India’s economic interests before foreign business, it is time to collect 100 top, committed entrepreneurs and encourage them with his full backing to find solutions to systemic difficulties in their operating environment.
Let us not forget many of these people are those who remained invested in an India growing at the “Hindu rate of growth”, minus ‘ease of doing business’, with ‘old infrastructure’ and for entirely non-mercenary reasons.
New initiatives have both signalling and long-term value. Since the government took charge, there has been a need to seek out both short-term hits and long-term fixes. We have leveraged good fortune (for example, oil prices) to our aggregate economic favour, handled hazards quite well (poor monsoons, inflation risks), and triggered long-term fixes (hygiene, financial inclusion).
Now is the time to deliver short-term hits that improve both real and optical delivery to the people at large. The logical option is to find ways of putting more money into the hands of people and to make sure that infrastructural spending by the state produces new employment.
All of this at this stage of our economy may ultimately go against the prevalent thinking of adhering to internationally expected targets on fiscal matters, but we must decide our own course.
We cannot simultaneously be the global darling “because we have growth” and financially an outcast “due to fiscal numbers”. But revenues from an expanding economy will correct this.
Satisfactory underperformance is a more dangerous illness than is apparent. That we have no choice but to rely on a notorious, creaky implementation machine that developed over decades is obvious. But we have not built a healthy paranoia that allows us to execute stretched targets and pushes our decision-making and monitoring processes out of the comfort zone.
The steps taken so far to break familiarity and kill unhealthy habits must go a long way beyond eliminating entrenched interests. The new India requires more evolved solutions.