There is a saying in Malayalam,
"Upakaram cheythillengilum, Upadrivikkathirunnal mathi"
A loose translation - If you can't help, at least try and not to do any harm.
Indian industry must be uttering this sentence a million times a day while thinking about the Central Government.
The Indian Governments led by Indira Gandhi, Morarji Desai, Rajiv Gandhi, VP Singh etc did their best to stiffle Private entrepreneurship for decades. They had a vice like grip over the Private Sector using the Licensing system and other draconian controls. In 1991, P V Narasimha Rao (the credit has to go to PVN and not to MMS) had no option other than to liberalize, privatize and globalize the economy. Whether out of compulsion or not, he was imaginative enough and bold enough to dismantle the existing non performing, constrain creating system. This one act provided the filip for our private sector to unleash their entrepreneurial skills. They fully grabbed the opportunity and took Indian economy to greater heights. It is to A B Vajpayees credit that he understood that the role of Government in the future is to be one of facilitator to the industry, than an owner or controller of the industry. He was clear about the need for infrastructure development and connectivity. Though Rajiv Gandhi ushered in the Telecom revolution, ABV's initiatives saw greater broad band and mobile connectivity, which has created a revolution in the corporate and personal lives. Apart from this Vajpayee kick started the National Highways project - the Golden Quadrilateral and the N-S & E-W Corridors. It is to the eternal shame of UPA Government that they have dragged their feet on the project which should have been completed in 2007, but is not likely to be completed in this decade. He also wanted to connect the rivers, but this too has not seen the light of the day under the new government.
Despite the UPA government putting every conceivable road blocks in the way of economic growth - rising interest rates, credit squeeze, dragging feet on second generation reforms, diversion of funds to non productive social schemes like NREGA (which has resulted in lack of funds for infrastructure development projects), poor fiscal discipline, rising revenue and fiscal deficits, double digit inflation, approvals being denied, labour law amendment defered, agriculture being ignored ............ the list is endless- the economy has grown at around 7-8%. And this during a global recessinary period.
This is not an anamoly. Our economy is growing DESPITE the Government, or rather INSPITE OF the Government. The growth is driver purely by Private Sector initiative, who are fighting a losing battle of late, what with government totally apathetic to their basic needs of providing funds at competitive interest rates, and making basic investments in the right infrastructure projects (while it is welcome that our Airports are being upgraded, that should be the least of our priorities. The priority has to be to upgrade the Road, Rail and Ports that facilitate movement of goods). And the Government has not made much investments in the next generation Internet Connectivity. While our current connectivity might be sufficient for data transmission, the future needs of the IT sector for higher bandwidth is not being talked about at all. This will result in our country losing its competitive edge in IT in the long run.
While one can cite Ambanis, Tatas, Mittals, Dhoots etc as people who have benefitted from Government support, the fact remains that only a chosen few have got the support from the UPA Government, for obvious reasons. The facilitation for the industry by the Government has to be broad based and all encompassing.
Of late, the Government, which is clue less on inflation, is taking retrogative steps by increasing bank rates steadily, raising tax rates to cover up its poor fiscal performance, not making investments in infrastructure and generally dragging its feet on all policy matters.
Is it any wonder the industry is asking it to leave things as it is, and not worsen it?
