The last few years, characterized by corruption, policy paralysis, economic slowdown and job losses, is something not only the government and the industry but even the common man would like to forget. Given this background, we spoke to some thought leaders and captains of industry across sectors and asked them to identify five things which the next government should do to ensure that growth and development come back on track. Here's a peek into their minds…
ANAND MAHINDRA | CMD, MAHINDRA GROUP Measure social sector outcomes 1
Articulate "Promise 2019": When companies formulate strategy, they clearly articulate a nearterm 3-5-year vision with clearly defined deliverables, not vague, long-term plans. So should the new government. We need to see a "Promise 2019", with metrics to measure performance versus promise (eg MW of generation capacity added, km of national highways constructed, etc). The government should then publish regular and transparent annual updates against these plans. 2
Promote tourism as a multiplier and a mirror: At 6.6 million international tourist arrivals annually, India lags abysmally behind countries like South Africa (8.3 m), Taiwan (7.3 m) and Vietnam (6.8 m). A doubling of this number would not only generate an additional $17 billion in foreign exchange, but also have significant multiplier effects on employment. 3
Measure social sector outcomes, not spend: Our policies today are input-focused, emphasizing
the money spent in areas like healthcare and education. The emphasis must shift from resource availability to productivity measurement within the social sector. 4
Kick-start investment cycle through infra push:
The 12th Five Year Plan envisages investments
of $1 trillion. Even so, India's investment cycle seems to be in a state of suspended animation. The government must motivate the private sector to act, by reigniting the belief that India can be a manufacturing powerhouse. Two specific examples – can the large land banks that the government has accumulated be put to quick use by setting up plug and play National Investment and Manufacturing Zones already envisaged under the National Manufacturing Policy? Secondly, can landmark projects like the Delhi Mumbai Industrial Corridor and the Bangalore Mumbai Economic Corridor be turbocharged to demonstrate to the world that investment in Indian infrastructure can indeed sow a 'field of dreams'?
Offer a "New Deal" to
address India's Red challenge: Internal insurgency and the naxal menace pose the biggest threat to India's territorial integrity. It's essential to put maximum resources behind battling this. At the same time, a "New Deal" should be provided, not a cosmetic solution or a hollow promise but a deal that tackles the core ills besetting these regions — lack of education, healthcare, and infrastructure development.
DEEPAK PAREKH | CHAIRMAN, HDFC Focus on minimizing energy imports, pass crucial bills
The year-end always calls for introspection. 2013 has seen fewer wins and more misses. Yet consensus says next year will be better for India. There are many critical pending issues but one must recognize that positive initiatives such as Aadhaar, phased hike in diesel prices and the Project Monitoring Group must continue with the same momentum. Though the 'to-do' list of the incumbent and the future government is immense, some issues listed below are at a tipping point.
Energy security: Two-thirds of India's power is generated from coal. India
holds the fourth largest coal reserves, yet faces shortages. Coal India's monopoly must go. The long-term policy focus is to minimize energy imports. If no serious measures are taken now, by 2030 India will cumulatively import energy of $3.6 trillion — twice today's GDP. We
cannot afford this. 2
Target FDI: Tapering is inevitable and the freshly garnered FCNR(B) deposits are of
shorter tenors. We need more long-term equity investors like sovereign and pension funds. Only a friendlier business climate will encourage investors. Start by streamlining approvals with timelines.
Pass critical legislations: The passage of bills like GST, DTC and insurance is no
longer an issue of political one-upmanship. They are imperative for the economy. These bills have been sufficiently debated. Those opposing will be viewed as anti-reform. Which political party should risk this?
Get going on disinvestments: Today, disinvestments are only used to narrow the
fiscal deficit and yet targets are rarely met. Reduce government stake in PSUs to 51%, offer ESOPs and restrict single shareholders' stake to 10%. PSUs will become more efficient and the government will get resources it needs for its financial inclusion agenda and raising its spend on education and healthcare.
Focus on the urban agenda: 40% of India's population is going to be urban by 2030 — a
doubling of the current urban population. India needs many new cities with adequate housing, transportation and urban infrastructure. DMIC is India's most promising urban project. It must remain fast-tracked and supported in toto.
Recommit to market reforms: The liberalization has brought economic growth. Yet, of late, there
are pressures to go back to populism, redistribution of wealth and socialism. No doubt, there have been market failures. But government failures have been even bigger. We should recommit to market reforms. Social and political buy-in requires that corporations ensure that growth be inclusive. Social justice and market forces must work in harmony. 2
Reinvent higher education: India has a very large young population. Yet, of the total number of
people who should pursue higher education, only 18% actually do so. We must dramatically upgrade the quality and capacity of higher education through better collaboration between industry and academia; leveraging technology; public-private partnerships; stronger role of state governments in higher education; and others.
Reimagine healthcare delivery: India's healthcare system is in a major crisis. Infant mortality is seven times that of the United States. India has 63 million diabetics and 2.5 million cancer sufferers, the majority of whom will not get quality treatment. There is a severe shortage of doctors, beds, and medical facilities. We must declare that healthcare is a human right. In order to close India's enormous gap between healthcare supply and demand, there is an urgent need to scale up the practices of those Indian hospital exemplars that provide quality healthcare at ultra-low cost.
Transform infrastructure: A strong manufacturing sector is required to create jobs that can
absorb millions of youth. The backbone of manufacturing is infrastructure. We must place very high priority on building the infrastructure that can provide world-class supply chain to fuel growth in manufacturing.
Embrace reverse innovation:
Reverse innovation is any innovation first adopted in a poor country like India which subsequently can flow into rich countries. Innovating to solve the problems of the poor represents the biggest opportunity for Indian corporations and should be their number one priority. However, this a l s o presents some of the hardest techn i c a l challenges, where we cannot simply adapt solutions used in wealthy markets. We have to innovate anew.
Push reforms, make healthcare a right VIJAY GOVINDARAJAN | PROFESSOR, TUCK SCHOOL, DARTMOUTH COLLEGE
N R NARAYANA MURTHY | CHAIRMAN, INFOSYS Parties must field non-political candidates in 2014
The year 2013 has been a disappointing one in many ways – low GDP growth rate; no progress in liberalization; very poor handling of a difference of opinion with an important ally; worsening of urban infrastructure; and a judgment by the Supreme Court that puts us back by at least 20 years. I can go on and on. My expectations from the new government are...
Courageous, visionary leader:
I hope that the 2014 elections
will bring a government with a fresh, youthful and confident mindset. If we can at least get a courageous, firm and visionary leader who will enunciate his or her vision to redeem the pledge of the founding fathers through internationally proven ways of reducing poverty, that will be enough. Rahul Gandhi's speech at FICCI and reports of Narendra Modi's track record in Gujarat raise our hopes.
Create jobs: The only way India can reduce poverty is by
creation of jobs with decent disposable incomes. No country has solved the problem of poverty only through subsidies. Every country that has reduced poverty has done it by reducing friction for businesses to operate, export, grow and generate productive employment.
Perform: It is important for the UPA and the NDA to remember that performanceleads to recognition, recognition leads to respect, and respect leads to power. The only way India can become powerful in the eyes of the developed nations is through performance like China has done.
Field non-political candidates:
Both UPA and NDA have to
pick several non-politician candidates who have demonstrated performance in their current or earlier avatars. I know the corporate world a bit and let me name just a few examples – Nandan Nilekani, Deepak Parekh, Vindi Banga, Mohandas Pai, Yogi Deveshwar, Venu Srinivasan and K V Kamath. We have excellent people from other fields too. Ramesh and Swati Ramanathan are probably the best two brains in the country in election reforms and urban governance.
Integrity: We need our parliamentarians to demonstrate
integrity of thought in educating themselves well on legislations, and discussing and debating them on their merits. We have waited 67 years for such integrity from our parliamentarians. I am an optimist. Therefore, it is never too late.
Happy New Year!
ADI GODREJ | CHAIRMAN, GODREJ GROUP
Introduce GST, boost Saarc ties 1 Take quick and early decisions 2 Control the fiscal deficit, the balance of payments and the $/Re rate 3 Considerably improve ease of doing business in India 4 Introduce GST as early as possible 5 Improve relations with other Saarc countries
SACHIN BANSAL | CO-FOUNDER & CEO, FLIPKART Improve internet infrastructure
Being a part of the e-commerce industry, there are a few essential things I would like the new government to focus on: 1
Uniform tax code: This will go a long way in clearing up a lot of ambiguity that businesses face today and
help them expand and function to their potential. 2
Special cells in govt depts: Start special cells within existing government departments that pave the
way for entrepreneurs and small businesses to set up operations smoothly. These cells could provide assistance in the areas of registrations, payment gateways, infrastructure, etc — areas that are processheavy and require extensive bandwidth that smaller businesses find difficult to spare.
Focus on improving data centre infrastructure: SEZs for data centre operations, for example, would reduce the cost of running these centres within India. This, in turn, would provide relief to smaller companies who currently need to run their operations from international centres due to cost considerations. 4
Boost tech infra: At an overall level, the government also needs to pay attention to strengthening the overall internet infrastructure in the country. This includes focusing on the rural broadband strategy, enhancing our mobile internet infrastructure, increasing the reliability, security and speed of the web (and, therefore, networked applications), etc. Steps have already been taken in this direction but there is still scope for a lot of improvement. 5
Take India-centric view: Most importantly, the Indian government should take a fresh Indiacentric view of the architecture of internet infrastructure in India. They should work towards preserving the independence of the Indian internet users and taking steps to ensure their data security.
MARK MOBIUS | EXECUTIVE CHAIRMAN, TEMPLETON EMERGING MARKETS GROUP Overhaul tax code to reduce litigation 1
Encourage investments: We believe the government must slowly reduce the extent of public
sector involvement in the economy and allow private enterprise to make investments. This could lead to an increase in productivity, growth rates and the currency should likewise strengthen. It is heartening to note that the government is finally taking steps to liberalize investments. However, that should not be done just to increase inflows, but also to enhance efficiency and productivity.
Overhaul tax and policy code: India needs to dramatically overhaul the policy/ tax code – which
has resulted in a lot of litigation. That has undermined business confidence in the country. Though the government has taken some steps; a lot more needs to be done. 3
Clarity on title rights: Ownership and transferability of assets should not be compromised.
There should be earnest endeavour to ensure that bonafide land & property titles, mining leases, access to natural resources are not impaired in any manner through executive or judicial intervention. 4
Greater voice for minority shareholders: The only way to truly revive capital markets is to make
companies answerable to minority shareholders. The government and Sebi have taken many positive steps in this regard and protection of minority rights would ensure that all investors — retail and institutional — have greater faith in the market.
Facilitate management change on default: To move forward India should facilitate management and ownership changes in businesses that have willfully defaulted on their debt obligations. Capital is scarce and should be deployed with deserving management teams backing business plans and if that entails a management change, India should be willing to go down that route. The new RBI governor has made his intentions clear in this regard and now is the time for us to see him deliver on the same.