- Economic growth in India set to rise in 2014, but markets want stability, not Arvind Kejriwal's AAP: CitigroupReserve Bank of India seen holding interest rates on easing inflation rateRigour and risk in Reserve Bank of India's reform push5.6 per cent economic growth rate likely in India next year, stable govt is vital, says Citi
Macro numbers continue reflecting distress; the pace of recovery is slow. India needs an urgent return to high growth. Such advocacy must not be viewed as mere promotion of business interests, but a basic need for job creation, without which we risk a fragmented and dysfunctional social order.
The freshly elected government faces unique challenges and opportunities. We need both short-term hits and long-term fixes. We need to work to enable enterprise across all sectors of the economy with the single-minded resolve of unleashing employment creation in ample measure. Enough jobs cannot be created in an environment which may urge, but does not truly enable, growth. One may have job-less growth, but not growth-less jobs. Right to employment is reduced to doles if there are no meaningful, productive jobs.
Without a strong manufacturing and services sector, supported by security blankets of energy, water and food, India cannot aspire to be a global power. Success in key areas must be our mantra. FICCI advocates a comprehensive, responsible agenda, addressing lowest common denominators rather than national aggregates. For instance—as in the first master "Bombay Plan" for India's development—our principal objective can be a specific multiple increase in per-capita income over a 5-10 year period.
Our first attack should be on inflation which chips away at the net income of all persons. Persistent food inflation is a key factor which needs to be dealt with via large increase in agricultural production and productivity, perhaps unleashing a process on the scale of Green Revolution supported by prudent use of higher-yield seeds and other inputs. Infrastructure for storage and distribution is a pressing need to reduce post-production wastage. Resolving procurement practices and administered price mechanisms are clear short-term hits. In the long-term, addressing the product-mix in sync with changed diets will relieve price imbalances.
For expanding commerce, whether in organised, MSME, or service sectors, India needs humongous amounts of patient capital and must attract all forms of legitimate capital from domestic and global sources. Being friendly to capital is distinct from just inviting capital; India has been aggressive on the latter front, but not in enabling the former. “Capital friendliness” does not compromise on national priorities, but implies stable and equitable policies and practices, that allow an acceptable risk-return balance.
Our financial sector makes funds flow to "real sectors" smooth. We must improve the health of and expand the banking sector. There is an urgent need to put into