I am disappointed with the troika of Manmohan Singh, P Chidambaram and Montek Singh Ahluwalia.
Now, I can hear you sigh and say "Here he goes again. Indulging in his favourite past time of Government bashing".
Great leadership (even good governance) calls for seizing the opportunity and being the trend rather than following the trend. India, has for long, been following the trend but has never set the trend.
We missed the bus in 1970's when the economy was crying to be opened up. We missed the manufacturing boom that ensued. We did not built on the Green revolution of the 1960's. The only time we took leadership was in IT,but that was more by accident than by any design of the Government. Even the IT sector failed to grasp the need for coming up with low cost solutions to reach out to the masses, that would have given them volumes unimaginable. And, we totally overlooked the business opportunity in the Hardware sector. Our IT sector was happy to pander to the blue collared needs of the developed countries to earn the green currency in doves.
Here was the opportunity of a life time. The developed countries are reeling and confused. Their facade of financial superiority in shambles. They are rocking as they just dont have a Plan B. They dont have an agricultural base, their manufacturing industries are costly and untenable (last heard all the Auto giants GM, Ford and Chrysler are facing bankruptcy in one month), financial services sector in a coma, hardly any money in circulation, unemployment on the rise............the list of woes is endless.
India is relatively better off. We did not lose our shirt in the sub prime market. Our banking structure is sound. Stock market suffered mainly due to faulty government policies of yore that allowed unrestricted Foreign Institutional Investments in India, rather than much more long term Foreign Direct Investment in long term infrastructure projects that would have prevented reverse flow of capital. The major worry was runaway inflation and the rising crude oil prices.
But the last two are under control, but no thanks are due to the Government. The inflation is down to 8 + (which is still high but manageable) mainly due to the fall in global oil prices and the good harvest during the Kharif. Inflation in India has always been traditionally seen to be falling post kharif. The Crude oil prices are at rock bottom now.
What should the Government have done? They should have
Slashed the interest rate drastically that would have fuelled the cycle of growth. Admitted, inflation would have gone up but that would have been manageable. This one act would have send the right kind of signals to the industry and small investors.
Reduced the petroleum prices. It is ridiculous that ATF prices have been slashed by 40% to save the Airlines (whose losses are more due to poor business models) but the Petrol, Diesel prices have not been slashed. The inflationary pressure that would have been felt on reduction of interest rates would have been offset by the subsequent reduction in commodity prices through lower transportation charges.
Scrap the pay commission report. The government employees dont deserve a single paisa as pay revision for they hardly do any job and are corrupt to boot. Some might argue that people will quit Government sector for Private sector. So be it. Good riddance. Dont fill those vacancies. At least the exchequer would be saved of considerable waste. (The latest is that the Public Sector employees are expected to get a 300% hike. For what? An incentive for running PUC's to ground?)
Read the riot act to the Banks. The financial crisis is mainly due to poor inter bank lending. If banks dont trust each other, then how can a common man trust a bank. Encourage the banks to merge. We have too many banks who doesnt have the size to compete globally. Indian banks just dont aim to have a global presence. If we are to grab the global leadership, we need to have really world class, huge asset based financial institutions than can make of break countries. All the Indian Banks can be merged into 3 or 4. Anyway, why do we need so many banks ?
Create a India International Fund. This fund can act like IMF. Use this fund as a handle to control the financial markets of other countries.
Give substantial incentives to our Manufacturing base. This is where our strength lies. Abundant educated manpower.Strong engineering base. Let us become an industrial superpower in 20 years.
Put Mani Shankar Aiyer back in Petroleum ministry. The guy had great ideas on energy security before he was kicked out at US instance. This is the time to tie up long term contracts for Energy, as assets are cost effective and Oil producing countries are worried about reduced investment in the sector. India should go ahead, invest massively in Energy Assets, and leverage long term contracts.
None of the above I have mentioned is impractical.
But the ego centric, US a** licking troika of MMS, PC and MSA do not have the guts to do it. What a crying shame!
Oh! for a leader with balls!
