|Posted by Jacob Parackal on August 16, 2011 at 12:45 AM|
The Indian economy has shown a remarkable growth in the past two decades (at an average of more than 7%) after Dr. Manmohan Singh, finance minister 1991, liberalized the economy for Foreign Direct Investment to flow unreservedly into the country. Economist argue that the Indian economy being socialist capitalist and taking the best from both socialist and capitalist to generate maximum interest to the investors as well as to generate a social fulfilment. By taking no proper stand it has given birth to corruption, redtapism and bureaucracy. The India Inc has been fighting a lone battle against the government until now before Anna Hazare, a social activist took up the fight against corruption gathering society sentiments and public strength behind the cause. The way he carried out his campaign remains debatable but the cause is a golden one,
Institutional change government has to implement:
With the change of outlook from anti-business to pro-business the government has helped to brisk the growth of Indian economy. This economic reforms and governments attitude was just a opener resulting in huge demand for IT in India. Changes of attitude within the leaders of INDIA INC has led government to think about updating and introducing reforms to help Indian economy and the INDIA INC leadership to achieve their vision . Reformation for government starts in itself in terms of Political and institutional reform to fulfil India’s aspiration to be a superpower in an emerging multi-polar world. The question arises is India destined to be a potential super power forever?
Fight against Corruption: The lokpal bill is considered to be the shell noise for the battle against corruption. If INDIA INC has to progress and achieve the super power status, the government has to provide a bureaucracy free pro business environment. The robust Indian society needs to wake up and fight the battle against this very aspect.
Investments into manufacturing segments: The government has to now start shifting focus from the IT industry and move onto the manufacturing industry. Well one can say that the growth of Indian Economy has primarily being because of the IT industry and the major revenues coming from US. United States of America with a dementing economy has poised a threat to major economies in the world including India and INDIA INC with a depreciating dollar and a huge debt its time to rethink the prime focus.
Educational Institutional Change: The gross enrolment ratio is 14 percent at present; it will be 30 percent by 2020.India will have 45 million students eligible for colleges, putting economic pressure on government to establish more universities. The policies will need to be liberalized and International private players would have to be allowed. There have been talks with the world renowned universities like the Harvard and Cambridge to set up off campuses in India.
Legal reforms: The legal system has to be changed and made corruption free. If India has to achieve the dream, the legal reforms have to happen soon and made accessible to the common man.
Women empowerment: The Indian women once considered being dependent and homely is now changing. Reforms need to be carried out to encourage female education and decrease the drop out rates by further giving incentives. To achieve 60% effective labor force the reforms has to be carried out. With 33% women reservation in the parliament, the government is leading by example. With different schemes run by the state government to encourage female education like the Balika samridhi yojna, Kishori Shakti Yojna, mid-day meal schemes is helping in achieving the goal. With a woman running the country’s largest ruling political party and having a woman president should be the right time to look for a change.
With USA under a debt of over $2 trillion to China, and the latest figure showing the US treasury having only $72 billion in cash until the debt ceiling is increased, it wont be wrong to say, US has a long way to catch up. There is always a fear of China dumping half of US bonds causing the dollar to plummet giving a threat to the world economy. If China doesn’t dump and US increases its debt ceiling by printing more money, the USD will depreciate giving huge loses to China. One can conclude that two of the world’s largest economies are under a constant threat of falling apart leaving a huge opportunity for India to fill the gap if the reforms are carried out soon.
Institutional change INDA INC has to implement:
INDIA INC comes from a history where Indian economy was closed and INDIA INC developed in anti-business environment and once the economy opened up and FDI’s started flowing into the economy, they thrived. The advantage INDIA INC has is the availability of cheap skilled labour. Another biggest advantage the INDIA INC enjoyed during the global downturn was the availability of Dr. Manmohan Singh as the prime minister of the country. His economic control and reforms helped INDIA INC not to be badly affected by the global recession as other global companies did. Thankfully the banking sector hasn’t being totally liberalized as the US and the government keeps a check on the banking activities. On the negative side, it acts as a barrier for offshore trading to take place in the country,
Among the corporate governance changes that few companies have agreed to, according to the Associated Press:
Making sure that at least 60% of board members for any given company are from outsiders
Pay for additional training for board members to improve their role and not leave them just to be the board decision makers.
Give board members unimpeded access to employees which will provide them to use the real time information from employee to take any decision for the betterment of its governance.
Strengthening of disclosure norms for IPO’s.
Aftermath of banking crisis in US, the government has now tightened the grip on the activities of the various sectors and is keeping a keen eye on the governance and policies. The listed companies have to give a detailed balance sheet on the operating cost and its future budgets and plans. INDIA INC has been the front runner in implementing the changes required by the government and is focusing on the over all improvement of the country and its social improvement. It believes that the Indian rural base is a potential consumer base and is working for the improvement of their life style in purse of them becoming their future customers.
The culture of Indians goes back to Indus Valley civilization to the Mauryan period to colonization and finally post Independence period. During the Mauryan period, India was considered to be one of the super powers of the world and it was referred to as ‘golden bird’. The attitude of the country in unison should be towards working towards achieving the lost glory. The Indian youth should be encouraged to join the political governance and help in developing a country they want to live in. The attitude of Indian youth should change from ‘chalta hai’ (let go) to asking questions at what they feel is wrong. From being a suppressed middle class, they need to rise and revolt against any injustice and help reform the country,
With the future projections shown by Pricewaterhousecoopers it is clear that the Indian Economy will be the largest economy by the year 2050. China and Russia would fall cause of lack of youth population. When the Indian economy is totally based upon the progress of youth, the youth needs to wake up and start reforming the country.