Agenda before the government
After the searing of inflation amid international slowdown and virtual policy paralysis which reversed growth from 10% to less than 5% this year, the new government has the onerous task of getting the Indian economy back on track. Among the many priorities that the new government would underline, revival of public sector projects, employment generation, revival of manufacturing and investment and poverty eradication should be on top of its agenda.
In the previous UPA regime, the mining sector had taken a beating with widespread allegations of corruption indulged in by the private sector which brought the industry to a grinding halt after the Supreme Court intervention. Similarly, large scale corruption in the coal and communications sector too had shelved any development that could have occurred in those sectors. Given this sordid background, and slow down in other sectors, the new government has to work to bring in utmost transparency and effectiveness in handling natural resources to catalyze development of the nation and benefit the poor.
Industry barons are themselves suggesting that natural resources should be auctioned and their exploitation should be done in a sustainable and transparent manner, on revenue sharing basis or highest royalty. Young Indian entrepreneurs should be encouraged, class technology enabled modern plants and big investments should be brought in, with government enforcing adherence to environmental, health and safety standards.
There is also need for creating of raw material processing industries and generate hundred of thousands of jobs for the new emerging educated middle class to bring hope to their rising expectations.
Foreign markets such as the US would be looking for predictability, certainty and transparency in India’s economic and trade policies. After cooling of ties over the Devyani Khobragade affair, the new government will have to rekindle bilateral dialogues with the US. Traditionally, India has been at the wrong end of US policies given the contentious issues of uncertain tax regime, intellectual property rights, defense, immigration reform and legacy.
Foreign capital will not invest in India if it flounders on a clear and predictable tax policy and contentious issues are not ironed out. Business will also look forward to a new Goods and Services Tax (GST) regime for an unified tax regime.
Similarly, US will be awaiting a decision on raising the FDI from 26 to 49 per cent that could fund India’s massive need for infrastructure.
Back home IT companies should be so nurtured to contribute to the country’s development agenda, simultaneously increasing their global presence. National Association of Software and Services Companies has already asked for a technology entrepreneurship mission to give a boost to IT. The stated aim is to use the strength of the Indian IT industry which has global reach and globally recognised capabilities, to achieve the development agenda within the country. Domestically it has to contribute to transformation and developmental agenda.
NASSCOM has pegged its hope on government support for innovation and entrepreneurship in the IT sector. It expects the government to create an entrepreneur friendly ecosystem that accelerates growth of small companies in particular by making domestic investment easier and simpler.
Industry players urge the government to ensure that the rules for opening and operating the small business are less complicated and save precious time. In China, for instance, a new business can be set up within 48 hours. Therefore the need for simpler regulatory framework, good taxation regime, institutional credit and the risk profiling to make Indian industry globally competitive.
IT and other industrial and growth catalyzing policies need to be futuristic that would push e-commerce and online financial transactions in a very big way.
Lastly, the growth engineered by these policies has to factor in fundamental principles of equity so as to work towards a more egalitarian society that was initially envisioned by the founding fathers of the Indian Republic, where the poor and vulnerable have not only a voice, but a legitimate space to live with dignity.
