Space For Rent
Sunday, January 31, 2016, Magh 18, 1422 BS, Rabius Sani 19, 1437 Hijri

India's quest for global leadership
Pravesh Jain
Published :Sunday, 31 January, 2016,  Time : 12:00 AM  View Count : 15
The year 2014 was a year of hope. India was filled with expectation, with the possibility of change. The arrival of Narendra Modi on the national scene and the success of his party in the General election marked an end to an era of huge disappointment under the United Progressive Alliance.
The poor felt a new revolution would sweep the curse of poverty away. Middle-class Indians believed that many new opportunities would present themselves and improve their lives. Overseas too euphoria was evident as the world waited for the emergence of a new India. Foreign investors were excited.
26 May 2014 saw the national mood lift as a new leader, a man believed to have a development mission, assumed office. Modi, people believed, had a work ethic that India needed.
Even the international media was upbeat. Modi's presence on social media saw him connect with millions around the world. His body language was positive, his speeches struck a chord and everywhere he went, the prime minister seemed to connect with those he met.
Days passed. Months passed. And a year passed. The middle of 2015 saw the mood change, to be marked more by doubts and questions than by hope and answers. Frustration was voiced, restlessness and helplessness became evident.
Slow economic growth; lack of interest of international investors; the constant fall in the value of the rupee; the lack of action on Make in India, Swachh Bharat Abhiyan, Ganga cleaning; frequent farmer suicides; non-stop border disturbances; more terrorist attacks from across the border, and the unimaginable rises in prices essential commodities like pulses dominated the conversation.
Leaving everything aside, the state of the economy began to worry us. The rupee is shrinking against the dollar. It's now at Rs.67-68 and most likely will be Rs.70-72 in the near future. The NPA of banks is at Rs.325,000 crore and is likely to cross Rs.700,000-800,000 crore by 2018. The Sensex today is around 24,000 but it's likely to drift towards 18000-20000.
The industrial scenario is gloomy. Many companies are closing down. Steel, copper, aluminium, petrochemicals, and many others are in bad shape. Hundreds of billion dollars of real estate players are stuck in land banks and there is no hope of getting recovery from these at least in the next decade.
The international scenario offers no hope. The recession in the world has just started: this time it is not recession but an economic earthquake of 8.5-Richter scale intensity. The constraints on India's growth are weak infrastructure, a vulnerability to inflation, regulatory complexity and policy uncertainty. If these are addressed, the growth outlook might improve. Although inflation has declined, it still faces the risks from supply side constraints in agriculture, where the situation is gloomy.
The greatest concern should be mounting NPAs of banks. An objective analysis of the country's situation suggests a bleak and unpromising future. Today a limited few seem to have their own way in every respect. Raghuram Rajan, the RBI Governor, has pinpointed the source of the malady. Banks are not being paid back loans which now add up to billions and billions of rupees. Flouting all rules and regulations, these few corporates and individuals do not pay back to banks what they owe. However, they keep spending billions of rupees on their costly bashes, and indulge in such luxuries as private jets, fancy cars and palatial homes. As they go scot free in most cases, they are convinced they are above all laws and obligations.
There is a need for stringent, punitive measures, for laws to reverse the situation. This demands a political will and a complete change in approach. Absence of equality is the violation of democracy and addressing this should be the guiding principle for policy.
This in essence is the challenge before Modi. The promise of 2014 must translate into action in 2016. Of his ability to deliver, there can be little doubt. Not without reason was he called a man of action by President Obama.
Important changes in the manner in which government goes about its business are already apparent. Certainly, the suffocating clouds of corruption that once enveloped New Delhi and the corridors of its power have lifted. The PM's initiatives in the areas of manufacturing and public hygiene are revolutionary. Evident is the desire to work to a plan, one where the executive is asked to be more involved in governance, and is consequently made more accountable, and where the citizenry is asked to participate in the transformation of society.
Modi's appeal for the modernization of the nation is very appealing; but it will be successful when it is premised on providing uncommon facilities to common people. Only this will make our democracy meaningful. Right now, the PM is directing his energies at bringing about systemic change at the grass-roots. This is the first step towards enriching the country and the vast multitude of Indians. But the next step must be to radically transform the manner in which India is administered. For this to happen, a paradigm change in approach is needed. The bureaucracy will have to transform itself to deliver, while citizens will have to shed their complacency to join a movement for change. Only then will India's dream of being - and having - a true global leader be fulfilled.
Pravesh Jain is Chairman, Paras Foundation, India

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