An eventful 2017. Should 2018 be as good?

Pratim Ranjan Bose

It has been a year of disruptions and, it was a great year for India. When I say great, I don’t mean everything was good every action delivered the desired results to the fullest extent. I only mean the change is all encompassing and in the right direction.

Over last 70 years especially over the last 20-25 years, India’s political system was dominated by caste and religious interest groups. Politics, particularly regional politics, promoted it for vested interests and, at the sacrifice of national interests.

At least one component in this maze, the Muslim vote-bank politics, is now under threat. The treat will only intensify once Triple Talaq will be banned in a month or so as soon as the President promulgates the new act. 

Also under threat is BSP’s Dalit vote bank politics. That’s a big change too as it leaves scope for huge political churning in the days to come. Voters must not be loyal to any political party. They should only be loyal to growth.

All these did not augur well for the regional politics. They came up for a reason that no longer exists. From a combination of different States and interest groups, a new India is fast emerging with one common aspiration – growth. The old ways of living are redundant.

You can feel this change the most in the North Eastern Indian States. The capitalist economic interests gained precedence over social sentiments. Young, educated, men and women from Nagaland or Mizoram are no more interested in ‘freedom struggle’. They are moving as far as in Mumbai, Bangalore and, Chennai to join the pool of skilled workforce.

To maintain the tempo, India needed to take strong measures on the economic front. As in 2014 when the current government assumed power, the economy was in the coma, as most of the policy initiatives of the previous government went horribly wrong. From telecom, auto, cement, mining and metals to road construction each of the key sectors was in paralysis and banks were flooded with bad debts.

Three and a half years later, India is out of the woods. Highway construction a growth multiplier is progressing 22 km a day. After decades of neglect, Railways is finally investing in track and tech upgrade to improve its share of cargo movement. Big money is invested in scaling up inland water transport that missed the attention of planners for 70 long years.

On the business side, Steel making became profitable as prices started moving north on domestic demand, mining is on growth path, commercial vehicles sales are up, capacity utilisation is the best of four years in cement and construction equipment sector and, last but not the least after nearly five years electricity tariff is ruling high on the open market indicating strong demand pull.  

But this is just the beginning. India is witnessing a major investment rush in logistics sector post introduction of GST in July 2017.

GST was by far the single largest reform. It has triggered a huge consolidation of trade logistics, which is triggering demand for higher capacity vehicles and equipment, creating the ground for fresh investments.

But this not all. GST is triggering huge merger and acquisition activity. The consolidation will increase the competitive strength of Indian corporate sector significantly, in the years to come. On the way-out are a large number of small and medium business which thrived on tax avoidance under political protection of the past. The net result is business is getting more tax compliant which in turn will increase their capacity to borrow. Just as politics the old ways of doing business are over.

GST I am sure will have far-reaching implications for Indian economy. Meanwhile, there is another sector which is witnessing major changes. After nearly three decades of stalemate, India is investing major sums in modernising its army. In today’s environment, a big nation must have a formidable army. Japan does not have it and, they are today scared of China. What is more important, unlike in the past when India played in the hands of overseas suppliers; the new India is forcing arms suppliers to Make-in-India. This has triggered major growth in defence tech industry in India. There are now scores of tech firms in Kolkata, Delhi and Bangalore, catering the security agencies. 

Over the last three years, India’s ranking improved in every World Bank index be it in EODB (ease of doing business), logistics efficiency or corruption. But that’s not enough. The BJP government in the centre will enjoy a majority in both houses of the Parliament in 2018. Will they use it for taking tough decisions which were hitherto blocked by the Opposition?

India needs consolidation of public sector banks. There are just too many of them crowding out the lending space. Our public sector enterprises remain under political control. Should government retain a majority in PSEs or should they reduce stake below 50% to allow them to be run like another corporate? Should we have a Coal India with 400,000 employees, 75% of which produce 25% coal? Why not privatise it and allow market forces to play? Indian Railways is corrupt, inefficient and is a major hurdle for growth. It is blocking the growth of private rail logistics. Why not start privatising Indian Railways?

Finally, should India consider downsizing of the government and overhaul of the bureaucracy? In India getting a government job is like earning a ticket to fool around. Why have them? Bureaucracy is the worst enemy of India. When in India, they ensure files move in a circular motion from one table to another. When in abroad; they create fiefdoms. It is they who fail the country and blame politics. It is high time, we break the chain.

I do have a long list of expectations from the Narendra Modi government in 2018. But I am doubtful if they will try as much, as four major States will go to polls in 2018 before the 2019 General Election. This daily dose of election is a major nuisance and waste of money. Can they at least change the constitution to force one election in States and the Centre in every five-year?   

Let's hope for the best. Let's hope 2018 will bring many surprises. Happy New Year.

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