Few days ago I woke up to the last quarter growth figures, which have plummeted to unexpected 4.7 % in last quarter ending December 2013. As I write, latest news alerts say India’s exports fall by 3.67% in February 2014.
I got a feeling that this was coming and perhaps it will be difficult for India to come back to the growth trajectory it witnessed in last two decades. Market analysts are busy attributing this down fall to fiscal Deficit, high inflation, policy paralysis, bank rate and myriad of other reasons.
However, my humble submission is that India never looked at its growth impediments holistically. India’s Honourable finance minister is of the view that factors which have contributed to slow down have bottomed out, I beg to differ with him. I am of the view that “Era of high growth” for India is over, only a monumental repair work can bring back it to high growth trajectory, which it witnessed in last two decades.
There are numerous reasons, why this has happened and all of them are plausible but I don’t blame this to pure economics or structural problem, albeit root cause of the problem is somewhere else. I have tried to narrow down it to following three reasons why India have missed a great opportunity:
Growth taken for granted: The perception amongst the policy makers, business people as well state apparatus was that of confidence or even over-confidence, it depicted a sense where all was hunky-dory and that the momentum of growth will remain unabated. Perhaps the basis of this confidence stemmed the way India remain insulated, when 2008 sub-prime crisis hit the world. Another aspect is the way India story was constructed, basis some reports, it gave a false belief in India that high growth is fait accompli. In the bargain, it overlooked the inherent problems in infrastructure, bureaucracy and polity.
Lack of commensurate reforms: Reform was a new word in our lexicon, but the commensurate reforms I am talking about is not typical what we hear like Insurance sector, aviation or retail policy reforms. The two sets of reform which were not commensurate to India’s growth aspirations were Administrative and Political reforms. The way India was administered three decades back, same set of procedures are in vogue. With such an archaic administrative blanket, still one had ambition to become super power defeats logic. As far as the political reforms is concerned,barring some reforms in Election process, overall India polity has worsened.
Over Reliance of Great Indian ‘Jugaad’: Shortcuts, manipulations and a short term view was still the way of life in India. It did some global acquisition, some of its corporations are in fortune 500 list but that ambition of setting up a global empire was conspicuous by its absence. The overall enabling atmosphere encouraged holding a short term view then a long term Nation building Vision.
The history of this world has missed a great opportunity when several million people could have been extracted from poverty. India, as a global power, given its history as nation state, would have been a great balancing power. Its not the misfortune of India, that it missed an opportunity but of world, as it could have been a great contributor to the world progress, if India would have leveraged this opportunity.
Author: Raju Moza has 14+ years of experience across various industries and domains like Telecom, Retail, Education, Electronic & Mobile Services, Travel & Hospitality and Manufacturing. He has been a turnaround leader with deep insights in understanding of diverse markets. He is regularly invited to speak at seminars and conferences. Besides the strong business pedigree, he is an ‘active writer’, has written some of the critically acclaimed pieces on diverse subjects namely Kashmir, Afghanistan, Political Islam, International Affairs, Political Economy and Short Stories. He recently shot a documentary as well. He is an MBA in finance and has recently done a Venture Capital development program from ISB, Hyderabad, India.