The advantage of exiting a horrible year like 2011 is the immense relief that it is finally over. Ergo, it follows that the odds for 2012 turning out to be a far better year are quite realistic.
This was the year when corporate India fell out with the government. The unshackling of the relationship disrupted an understanding that had taken two decades to build. Everything else fell into this narrative. How it is repaired in 2012 will ensure how far we move away from the debris of a lost year.
It ended with the second quarter growth rate coming down to 6.9%, a mismanaged inflation and mutual recriminations which ended with the Prime Minister telling industry captains in a meeting in the last week of December to shun the blame game and move on in a somewhat positive frame of mind. The Indian political class, bureaucracy as well as the capitalist class can indeed script a new chapter of growth in 2012 if they work together on the massive pent-up investment demand in infrastructure like power, roads, ports, airport and housing. This can happen if the bitter recriminations of 2011 are truly left behind and a domestically-driven growth story is scripted in a public-private partnership mode.
The Prime Minister's meeting with prominent industrialists last fortnight may give some hope in this regard. The chairman of India's largest private sector company Reliance Industries(RIL) told the PM that he would invest over Rs 70,000 crore over the next two years. Other industry heads too made similar commitments. On a positive note, the UPA has a great opportunity to make these investments fructify as soon as possible. For this, the government must set up a fast-track single window which hastens clearance of land and other resources such as coal and minerals which are so critical to the new investments being promised. In short, 2012 must be declared by the UPA as a “domestic investment year”, and everything must be done to retrieve the economy from the current situation of zero growth in private investment.
The best way to read both, the way 2011 dissipated and the hopes for 2012, lies in data.
Our eight page year-end special edition sails on these data sets. Capping it is the green shoots for 2012 which directs our gaze on to sectors where action is building up.
Venture capital funding, after a slump in the last few years, has now