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Sunday, December 6, 2015

Journey of growth

Powered by the intellect, energy and creativity of a young nation, India is certainly poised to grow rapidly.

The journey has challenges and growth is by no means guaranteed. But with concerted[kun'sur-tid(joint,सम्मिलित)] efforts I believe equitable, sustainable growth is achievable and India can build shared prosperity for all citizens by transforming the way the economy creates value but as we cross 18 months of the present government and edge towards the end of 2015, this is a suitable time, both to reflect and take our journey forward.

For sure, things were not good in June 2014. Growth had slowed; the world was also slackening[sla-ku-ning(loosening,धीमा पड़ना)]. India faced a wide range of governance issues which, inter alia[in-tu'ey-lee-u(among other things,अन्य विषयो में)], shook the faith of investors at home and abroad. State benevolence[bu'ne-vu-lun(t)s(charity,परोपकारी)] was becoming the preferred instrument of assuring earnings. The industrial over-capacity we lament[lu'ment(regret,शौक)] today was already entrenched[in'trencht(established,स्थापित)] ; many debt overhang or health issues of today are fallouts of the circumstances described.

All governments followed policies of promoting foreign direct and institutional capital inflows, and exhorting[ig'zort(encourage,प्रोत्साहित)] domestic businesses to invest at home. No one, whether then or now, denies the attractiveness of India as a long-term and growth market.

Business attractiveness is a necessary but not sufficient condition for an investment destination.Energising an economy that had been slowing for over two years was a Herculean[hur-kyu'lee-un(strong,मजबूत)] task. Only some actions yield[yee(-u)ld(give,देना)] quantifiable outcomes, others can build positive perceptions when all actions are relentlessly[ri'lent-lus-lee(continuous,लगातार)] pursued and executed.

As always, external examination and internal reflections are two sides of the coin.
The external viewpoint — whether of foreign governments, economists, investors and foreign investors doing business here — they also feel that decisions and actions must move faster; but outsiders definitely recognise the limitations of a notoriously[now'to-ree-us-lee(infamous,कुख्यात रूप से)] creaky[kree-kee(broken,जर्जर)] implementation machine and of a noisy federal democracy.

For the domestic viewpoint, it is important to recall that local businesses have literally been on an economic rollercoaster since about 2012. They are, therefore, tottering[tó-tu-ring(unstable,लड़खड़ाना)] under multiple pressures of capacity and debt overhang, poor exports and increased competition from imports. They need to survive the turmoil[tur,moyl(violent disturbance,खलबली)] in one piece; therefore mindsets remain strained and negative.

In a recent India Risk Survey, continuing weakness in the rural economy have amplified[amp-lu,fI(increase,बढ़ाना)] woes.

In our capital-scarce[skehrs(not enough,अपर्याप्त)] economy, banks must play a vital financing role in fuelling future growth and investments.

All this may leave some with a haunting feeling that the government has “not done enough” — however, be denied that the economy is more stable than before; inflation tends to be lower, fiscal and current account management are better, GDP numbers are decent.

The storyline must shift from “what is not happening” to equitably analysing real impacts; it is important that supporting evidence derives from a wider base which includes corporate performance, industrial production, health of the agricultural sector, and timely delivery on infrastructure. Without these, the economy is just not creating sufficient employment openings.

Ficci reasoned in May 2014 that tangible[tan-ju-bu(real,वास्तविक)] outcomes could accrue[u'kroo(grow,बढ़ना)] over the next18-24 months, based on a mix of short-term hits and long-term fixes.

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