Needed: A sense of economic urgency
Goa has for far too long rested on its laurels as one of the most affluent states in India with a high literacy rate and excellent quality of life indicators when compared to other parts of the country. But the events of the past year and a bit have exposed just how fragile this relative prosperity is and how the current economic downturn is now threatening to eradicate the GDP gains of recent years, not to mention pushing more and more young Goans to look for opportunities in other parts of India or abroad.
Speak to any leading businessman in the State, regardless of the sector he is in, and he will tell you that his first priority is not to increase revenue, for which a conducive, enabling economic environment and industrial climate is the sine qua non, but to cut costs. And the first port of call for these the cuts is naturally the wage bill, i.e. lay-offs. When this happens in a time of economic boom, employees just move on; but when it occurs across industries at a time when employment opportunities are scarce and in a situation where even such growth as there is happens to be mainly jobless, we are moving towards a crisis.
In the recent past, a Herald report brought out the fact that in the past two fiscal years a grand total of two, yes two, new industries have been set up in Goa; in fiscal 2012-13 the number of new industries was zero and in 2013-14 it has been two till date. That this has come on the back of a Goan economy reeling under the systemic problems with its three biggest revenue generating and employment providing sectors, tourism, real estate and mining, is bad enough. But the real issue is the lack of a sense of urgency in setting up new industries for which Goa is ideally suited ~ education hub, financial services, IT and high-tech manufacturing to name just four ~ whilst attempting to fix the problems in the traditional wealth and job creating ones.
So, a two-pronged approached is the need of the hour ~ focus on fixing the problems with the traditional sectors of the economy and simultaneously provide a fillip to the knowledge-based sectors. It is only a combination of the two that will both enable and empower Goa to grow. Of course, this is easier said than done but it is important to understand why we are in this mess because only that knowledge will ensure we fix what needs fixing and don’t repeat mistakes.
On the traditional sectors front, the Goa Chamber of Commerce and Industry has finally woken up to urge the government to put in place regulatory and monitoring mechanisms to enable legal functioning of extraction industries. In the wake of the Supreme Court mandated suspension of all iron ore mining related activity and the virtual ban imposed by the National Green Tribunal on sand mining and earth excavation for brick and road manufacturing materials, the GCCI president made a rather candid confession: “It is because states have not put the proper regulatory and licensing mechanisms in place that indiscriminate extractions take place and then the courts intervene it is the industry which suffers.”
Though partly self-serving, the statement is accurate. For, the idea should never be to shackle the entrepreneurial spirit of Goans but without proper and, vitally, competent monitoring mechanisms, crony capitalism, illegalities and a compromised industry are the result. Mining and real estate are already feeling the impact and from all indications tourism is next. Governments in Goa over the past decade and more have singularly failed in the face of the lure of easy revenue to put in place a human, physical and technological architecture to ensure sustainability, profit and accountability. Let us not fool ourselves ~ businessmen are, and rightly so, driven by the profit motive (with due respect to their CSR initiatives et al) so it only an empowered regulatory authority independent of both NGOs and industry and with no direct government involvement that will make a difference in these sectors. Its absence is clearly a collective failure of governance.
As for the new sectors that need a push, just one suggestion ought to get a government that listens thinking ~ why not scale down/suspend for a year the many populist schemes that are essentially doles and utilize the monies thus freed up as seed capital to kick-start any of the knowledge-based industries suggested here? What’s good for the economy is eventually what’s good for Goa.
