India needs a booster dose of reforms

Jan 07 2014, 02:56 IST
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SummaryThe country clearly needs a liberal economy, with the government and industry on the same side of the table

Industries have always played a fundamental role in building a progressive nation. They play a crucial role in the creation of jobs, building infrastructure, alleviation of poverty, increasing exports of the country and, in the process, decreasing imports. The increased focus of industries on the development agenda is also helping the government to achieve its social agenda.

India has always been proud of being a democratic country. A combination of young and not-so-young entrepreneurs, who have infused billions of dollars of funds and global technology, has helped give millions of unutilised human resource employment, to build the India of today and for tomorrow. Let us accept that industrialisation and manufacturing is here to stay in India, and is a large contributor to the economy.

The year 2013 was reminiscent the era of 1990s when India faced its second economic crisis, but also saw the dawn of the liberalisation of the economy. Opening up of foreign investment, liberalisation in industrial policies to give impetus to growth, disinvestment of under-performing public sector companies, and similar policies were seen as an opportunity to give a much-needed boost to the economy. The formula worked in favour of India and the country not only came back to its growth path but also became one of the most preferred destinations for foreign investors.

Today, India needs strong global confidence in relation to its policies, commitments and government support. At one point, justice could even be denied, but justice delayed paralyses the industry and the economy.

The year ahead, 2014, is being seen as one of hope and revival. The industry is looking forward to a speedy disposal of proposals and clearances. Agenda that could lead to not just creation of strong infrastructure but also result in massive employment generation leading towards eradication of poverty are being proposed. We will discuss a few salient features that could help India move pas the impasse of last year.

Disinvestment for growth

When companies like L&T, ICICI and HDFC can run world-class organisations without being owner-driven, why can’t the 250-plus state and central government-owned companies? These PSUs too can follow the example of the aforementioned private sector giants to create huge value for themselves. Why should the government house-keep these companies? It is time that 51% shares in the PSUs are sold to the public who will then hold the management accountable for company’s performance. Ultimately, the government should be looking to divest further, and hold

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