I start this blog with 2 widely believed and unproven hypothesis. You would probably get to hear them more in the corporate boardrooms specially MNCs which have invested and done business with India.
Hyp. 1: India discounts it GDP growth by 2% on account of infrastructure unavailability. Whether be the lack of proper roads, or electricity, or governance, or airport infrastructure or just the red tapism in the bureaucracy. It is a significant deterant to the global super power dreams of India.
Hyp 2: India's growth has been powered more by its educated citizenry with government being a by stander in the growth. If any thing, the neta giri and the babu-dom have shackled the Indian executives and business more than giving them head room and leg room to grow. Mani Ratnam's Guru, had a 4 minute monologue by Abhishek Bachchan on the fetters that governance is putting over capitalism in this country.
India ranks a lowly 122 amongst 181 economies in terms of "ease to do business index", a reportpublished by the world bank group. Only African nations and war torn economies are more difficlut than India in terms of ease to do business! So much so for an economy whihc is the second fastest in the world in terms of growth.
Vodafone’s global CEO Vittorio Colao made his point clear in the CII conference on 19th January 2009, that India must offer increased clarity on its foreign direct investment across sectors. The(FDI) policy in India is complex and lends to multiple interpretations. Companies work on their legal interpretation of the policy and sometimes, find that they have tripped onto the illegal side of things as per policy.
What ever interpretation we give to the Indo - China ascendancy, whether be the tiger or the elephant and the dragon; policy makers in India should understand this clearly as anything else, we are in the competition of global investment. Better products, better services, better jobs are only possible if, suitable climate is provided to businesses to perform. As a first hand, i am aware of the "gifts" that lobbies and corporates bestow on the Babus in the state and union to see that the businesses continue unhindered. Bribes form a part of the deal, right from the CEOs office to the ground of action where the municipal clerks and the policemen are "taken care of". I was not wonder struck, when one of these opinion polls revealed that Indian corporates are least averse to paying bribes for smooth functioning of their operations.
Even China is state controlled to a very large extent. However, the difference is stark. The Dragon's speed, growth and efficiency is a product of the state governance. It is top down , while for India it is bottom up. Without a doubt, in the long run, a bottom up is more beneficial. However, in the present circumstances, it is dragging the resurgence down below.
In an earlier blog, i had mentioned, 2009 being the election year will mean a plethora of populist measures. The exchequer is going to bleed and the onus for making up on the losses will be laid squarely on the shoulders of corporate India. Already, i believe that the upward revision of 3G licensing fees from Rs.1650 crore to Rs.4040 crore makes it a untenable option for business houses. Unviability will lead to slower roll outs impacting services standards in the country. But really, does any one care?
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