State of Drift

India Today - - WINNING - by M.G. Arun

In­dia’s tran­si­tion from a prime des­ti­na­tion for in­vest­ment to a slug­gish econ­omy that ranks lower than most ma­jor de­vel­op­ing na­tions in the ease of do­ing busi­ness is well doc­u­mented. In­dia’s global im­age is now of a fal­ter­ing na­tion that is plagued with cor­rup­tion, high in­fla­tion and a low growth rate. The UPA Govern­ment’s dilly-dal­ly­ing on key pol­icy de­ci­sions along with the pub­lic and ju­di­cial scru­tiny of some in­vest­ment deals has only weak­ened In­dia’s case. It was to sum up this dire sit­u­a­tion that top in­dus­tri­al­ist Anil Agar­wal in­voked the leg­endary strate­gist Chanakya: “In the ab­sence of fruit­ful eco­nomic ac­tiv­ity, both cur­rent pros­per­ity and fu­ture growth are en­dan­gered.”

Agar­wal, whose fairy­tale rise from a scrap dealer to the head of a $70 bil­lion con­glom­er­ate, Vedanta Re­sources, is also a story of strug­gles and ex­tended wait for govern­ment ap­provals, ques­tioned the Govern­ment’s ap­a­thy to­wards the natu- ral re­sources sec­tor dur­ing the ses­sion ti­tled ‘How In­dia Can Win the Next Decade’. Agar­wal pointed out that In­dia im­ports $500 bil­lion worth of goods even though it has the ca­pac­ity to pro­duce most of these at home and, in the process, pro­vide jobs to an additional 100 to 150 mil­lion people. “Aus­tralia, Canada, South Africa and Latin Amer­ica pro­duce much more than we do. We have the ca­pa­bil­ity to pro­duce 600 mil­lion tonnes of iron ore but we pro­duce just 100 mil- lion tonnes and even that causes a hue and cry,” the in­dus­tri­al­ist said, al­lud­ing to the ban im­posed on iron ore min­ing in 2012 fol­low­ing al­le­ga­tions— sub­se­quently val­i­dated by a court or­der—of il­le­gal min­ing. To drive home his point that do­ing busi­ness in In­dia re­quires ex­tra­or­di­nary will and pa­tience, Agar­wal re­counted that he had to wait 18 months be­fore the Cen­tral govern­ment cleared his ac­qui­si­tion of Cairn In­dia.

Agar­wal em­pha­sised that to spur growth and

de­vel­op­ment, In­dia has no choice but to re­form its econ­omy. And top of the re­form agenda should be sell­ing ma­jor­ity stakes in pub­lic sec­tor com­pa­nies. This, he said, will en­sure these firms are bet­ter run. “Let the share­holder de­cide who should be on the board, who should be the CEO,” he added.

Union Min­is­ter of Com­merce and In­dus­try Anand Sharma agreed that re­turn­ing to the high­growth path is more a ne­ces­sity more than an as­pi­ra­tion. “In­dia can’t af­ford but to re­cap­ture 8 to 9 per cent growth. We know we are ca­pa­ble of do­ing it,” Sharma, who has a for­mi­da­ble rep­u­ta­tion as a deft ne­go­tia­tor on world trade plat­forms, said. He, how­ever, em­pha­sised that growth must have a ‘hu­man face’: Its ben­e­fits must reach the so­cially and eco­nom­i­cally dis­ad­van­taged cit­i­zens.

The min­is­ter also un­der­lined the need to in­vest heav­ily in in­fra­struc­ture. “Of the 1.2 bil­lion people in our coun­try, more than 630 mil­lion are be­low the age of 21. As many as 15 mil­lion young people will join the work­force an­nu­ally over the next 10 years,” he said. “In such a sce­nario, cre­at­ing jobs as well as cities of the fu­ture is a need, not an op­tion.” The Cen­tral Govern­ment has been at work on this, de­vel­op­ing the in­te­grated in­dus­trial city of Greater Noida-Dadri, the Shen­dre-Bid­kin in­te­grated in­dus­trial city in Ma­ha­rash­tra and the Knowl­edge City in Uj­jain, among oth­ers. To build more such cities as well as other in­fra­struc­ture, In­dia needs to at­tract for­eign in­vest­ment, he said. Though for­eign in­vest­ment to the tune of $176 bil­lion has ar­rived in the last four years of the UPA 2—in all, the coun­try has gained for­eign in­vest­ment of about $303 bil­lion since 2000—there is a need to im­prove In­dia’s im­age as an in­vest­ment des­ti­na­tion.

ANILAGARWAL

Pho­to­graphs by RO­HIT CHAWLA ANAND SHARMA

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