Good Re­forms, Bad Re­forms

Voice&Data - - EDITORIAL -

Now that In­dian prime min­is­ter Man­mo­han Singh has an­nounced some bold re­forms, the big de­bate in the in­dus­try cir­cles is if this will help in boost­ing the sag­ging GMP growth. My per­sonal take is that re­forms can be an­nounced in one stroke, but they could take a cou­ple of years to reach the end ben­e­fi­cia­ries—the com­mon man. How­ever, with these re­forms de­ci­sion in multi-brand re­tail and avi­a­tion the di­rec­tion has been set again. And more im­por­tantly, the gov­ern­ment’s mood and in­ten­tions are clear now.

I am not sure if the ICT in­dus­try will see an im­me­di­ate im­pact on busi­ness. Avi­a­tion any­ways is not a big game for In­dian IT play­ers, ex­cept for a few niche ones. Phat else is re­quired here is speed­ing up mod­ern­iza­tion of air­ports, and air­ports in more cities. That could have a big spin-off on the ecosys­tem also which will con­sume IT big time. Re­mem­ber the Maruti story? To­day, be­sides the auto man­u­fac­tur­ers, their thou­sands of an­cil­lary sup­pli­ers are the big driv­ers of IT sales.

Re­tail will be huge—when IT starts get­ting de­ployed there it will start with the big In­dian names like Re­liance Mart, Pest Side, Shop­pers Stop, and Big Bazaar—they al­ready have some IT but will have to gear up much more to take on the likes of Pal­mart, Car­refour and Ikea. The turn­ing point will be when the tier-2 & -3 re­tail­ers, in lo­ca­tions be­yond the 25 big cities of In­dia, get their com­put­er­i­za­tion act to­gether. That could ac­tu­ally be the game changer for many. Hav­ing said that, I be­lieve the im­me­di­ate im­pact of these mea­sures are un­likely to be sig­nif­i­cant. Most of the pos­i­tive im­pact will be on the sen­ti­ments.

My idea of re­forms is not just some sim­ple pol­icy lib­er­al­iza­tion an­nounce­ments. The cur­rent po­lit­i­cal and eco­nomic mess is ac­tu­ally be­cause of poor im­ple­men­ta­tion of many re­form de­ci­sions taken 15-20 years back. The 2G scam is a prod­uct of shoddy im­ple­men­ta­tion of tele­com re­forms. Re­forms will keep com­ing back to hound us if we do not re­form and strengthen our gov­er­nance in­sti­tu­tions. A friend of mine jokes with me that the amount of money be­ing in­vested in e-Gov­er­nance could ac­tu­ally be the next ‘e-gate ‘ scam. I am sure his sus­pi­cion is mis­placed.

Phether these re­forms (and many more that should be an­nounced over the next few months) will achieve the de­sired GMP re­sults, I am not too sure. But they will cer­tainly yield elec­toral div­i­dends be­cause this ‘re­form’ word has been on ev­ery­body’s mind for the last 2 years, and now this UPA gov­ern­ment will say we have de­cided to go ahead. Late we were, but we put ev­ery­thing in jeop­ardy and an­nounced it, for the good of the na­tion and its peo­ple.

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