Three ten-year plans

As India shifts from reducing poverty to boosting a middle class, goals must be set for land, labour, capital

VENTURE CAPITALISTS KNOW that the most interesting dreams are those running towards something rather than running away from something. They also know that the most interesting entrepreneurs are those who know that a 10-year plan is not 10 oneyear plans but don’t forget that entrepreneurship is the art of staying alive long enough to get lucky.

As India’s voters change the performance appraisal criteria for policymakers from reducing poverty for 100 million people to creating an 800 million-strong middle class, policymakers should respond by setting one 10-year goal for each of our three factor markets. In land, we should target a 0 per cent difference between rental yields and bank deposit rates instead of the 5 per cent today. In labour, we should target 50 per cent of our workers in formal wage employment instead of the 15 per cent today. In capital, we should target sovereign borrowing at 4 per cent instead of the 7 per cent today. India is ready for bigger dreams and goals are just dreams with a deadline. These three need ambition, teamwork and 10 years.

This new ambition does not imply that India’s shameful poverty is behind us; only that the “bhooka-nanga-pyaasa” condition of 1947 is no longer as acute, chronic or malignant as it was. Recent election results suggest that voters are lowering tolerance for policymakers with stale or weak ambition and want newer, bolder and inspiring policy goals. This shift is hardly surprising: The demands of the youth who show up to our job fairs has shifted from “naukri” to “achhi naukri”. Even the magnificent desert resort, Manvar, halfway between Jodhpur and Jaisalmer, has to pay starting housekeeping staff salaries of Rs 8,000 per month. India’s problem has shifted from providing jobs to raising wages; this needs higher productivity in land, labour and capital. Let’s look at three goals that synthesise this shift.

In land, the 5 per cent differential between rental yields (annual rent as a percentage of sale value) has many parents but is largely a child of spiritual returns on black money where you are not looking for return