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Re-imagining India’s Growth in Post COVID World

Beyond Media Hype and Political Cacophony

It's really good to see that India wants to try once more and use the global anti china sentiment to build on the industrial growth which India missed from 1980 onwards.

Although it's a good thought, but thinking that it will come automatically is completely foolish. Further that’s a very negative way of looking at it. Growth can be imagined in a far more constructive way than relying on a anti sentiment.

It will also not come because suddenly everyone feels that US is supporting India. There can't be any thing more foolish than that. First US is fighting for its own supremacy and not for India and second, US outlook will change significantly post their elections.

Some of the thinking prevailing in current scheme of things are very dangerous for reclaiming India's lost growth. Policy positions and media narratives emerging related to these are:

1. All China based US, European, and Australian companies are ready to set shop in India

  • Reality is Europe is divided house and Entire Europe is no longer following in US footsteps.

  • US companies don't necessarily follow what their government wishes.

  • They will move to the place where it makes a good business sense. And right now India doesn't provide that comfort.

  • Although Indian media portrays a complete isolation China, but believe me a lot of Europe, Russia, Almost entire Africa, Almost entire middle East and still a lot of East Asia contrary to our belief will be standing with China in days a d years to come. Any policy makers will ignore this fact to their own peril and of their countrymen.

2. Removing Labour Laws and other Commercial laws will make it attractive for companies to come  here

  • Reality is it sends s signal that it's a dystopian form of governance.

  • It signals lack of policy consistency

  • It also sends a signal that it's a lawless society. Sustainable Economic development can never happen at the cost of lawlessness.

3. There is a arrogance that skill is abundant in India

  • Reality is that even to get a high end building work our companies have to bring workers from China and other East Asian countries

  • At the higher end of white collar work skill situation is comfortable

  • Lots of make in India is being showcased, but that is still more of assembling jobs in India and not truly made in India

  • Few spaces like IT Auto, and Pharmaceutical have lots of made in India. But it they still lack deep cutting edge R&D work. A lot of first time truly innovative work still happen outside India.

  • Services is another area where we are generally average in skill availability, but it requires a different type cultural sensitivity and governance framework to truly exploit and grow this segment.

  • Another reality is abysmal low standard of our education especially at primary and secondary levels. Scene is so bad that we keep over certifying individuals without real skills.

4. Made in India is panacea for all Ills of our growth rate

  • Reality is: It may make few vested groups very happy, But in reality that's not the case.

  • Suddenly because of COVID and global Lockdown it's not going to be isolated islands.

  • Integrated global economy is a reality, which only a foolish economic wizard can ignore.

5. Suddenly the handful of capitalist ruling Indian economic scene will no longer promote crony capitalism and they will follow a healthy corporate governance.

  • Reality is that, they will continue to fork out profits on monthly, quarterly basis from their own entities and thereby looting their own shareholders, Employees and customers.

  • Reality is our CAs (no generalization here) will keep providing structural vehicles through which even a loss making promoters will make money

  • Reality is that our economic scene is still largely occupied by less of empire builders and more of traders cutting their daily trades. Empire builders have the wherewithal to support the entities they create even at the cost they personally getting bankrupt, but they make sure that the company they have created will last year's beyond their own and their offspring’s lives.

So where to start? How we can truly take advantage of emerging geopolitical scenarios?

Answer probably lies in the realities, which I described against prevailing media and government painted scenarios. If we address them we can still emerge as a developed economy. Some of the solutions which I can suggest are following:

  1. Take some opportunistic advantage of emerging scenario, but that shouldn't deter you from path of real required changes.

  2. Real Education reform is required. Universal quality education should be prioritized over universal health. That comes second. We need to go away with any capitalist involvement till 12th standard. Post 12th class everyone should be encouraged to take-up economic activities. Any higher education beyond this should be highly merit based. Remove this arrogance that India have abundance of skills. It took china a good 30 year to upgrade their skill-pool. They started their investment in this area around 1980s when India lost its two decade of development in Mandal vs Kamandal war.

  3. Push the pedal on corporate governance. Without healthy corporate governance, you can't have a level playing competitive economic play.

  4. Play geo-political game with more maturity. There is more to polity than organizing events across the globe. A country can give you initial dope of well orchestrated campaigns in their stadiums but the same country will act against your interest when it comes to real play

  5. Re-imagine your villages and cities. All of us have seen the disadvantage of very few mega cities where countries 1/2 of economic activities were centred. Our entire economy is going to contract because of this over dependence on few mega cities. We need more of smaller economic hubs and self reliant villages if we truly want to become global economic power.

  6. Do something urgently on Population control. Immediate measures on this front if not taken will take the country on downward path. It's no longer a advantage considering path breaking development happening across the globe on digitalization. Whether you like it or not most of manual and transactional work is going to go away. Whether you are ruling party or opposition party, no one can create enough jobs for so many hands. Opposition parties can keep enjoying the benefit of shouting about unemployment till the time they come in government. This last point has to be addressed on a war footing without any further delay.

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