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The Rediff Business Special/Mukesh Ambani

India needs radical solutions, not creeping change

The years ahead

Inequity everywhere

How many of us in business say that they want to be world class but, in reality, do little to effectively put in processes to get us there? All of this has reduced India to an incremental society.

The existing governmental processes are designed for curtailing growth and denying development. Schemes are sent to committees and commissions. The committees and commissions contemplate, confabulate and, then commend. The government then sits in judgement. Recommendations are either filed away or small and marginal decisions made.

These decisions are not bold enough to make an impact. Schemes start with a bang and end in a whimper -- all on paper. When development schemes do get to foundation stones, there is celebration. Quite natural and hard-earned. Grand investments and schemes are announced. Bureaucratic processes then take over. Foundation stones become tombstones. I know these are disturbing facts. But facts do not cease to exist because they are ignored. We must face them.

Wanted: radical initiatives, not schemes

India needs bold and radical initiatives. Not incremental steps. There is a general tendency to cling to existing customs because the meek and weak are afraid of the unknown. There is an urgent need to bring about a paradigm shift in our attitude, governance, and above all, our governing and managing processes.

Infrastructure development, privatisation, labour reforms, legal and judicial reforms, national technology missions, electoral reforms, downsizing of government -- are all crying for radical solutions, not creeping change.

If social and economic structures lack visual appeal and are lifeless, demolish them and build new ones that attract and enliven. We must make India a land of architects, not masons. And, all Indians have to be architects of a new India in the new millennium.

From the medieval to the modern

As architects, we need a vision to inspire and motivate us. A vision to make India a global economic superpower and its people prosperous. A vision that would unleash India's tremendous potential in people, skills, technology application and opportunities. As architects, we also need a mission to shape our vision. A mission to take India from the medieval to the modern. Several decisive steps are needed to bring about this transition.

1. We have to divorce governance and economic activity. In ancient Indian society, the state never engaged in commercial activity. Those engaged in commerce and trade were given great respect.

The state's participation in economic activities was introduced during the colonial period. We won freedom from colonialism but are still subservient to creations of colonial age -- government servants and government institutions.

Our fixation on the predominant role of the state in economic activity has not produced results. The philosophy of state's withdrawal from economic activities is in keeping with and not in contradiction with our ancient Indian tradition. India must de-bond from a system that preordains the state to be the fountainhead of most economic activity.

Enterpreneurship is inbred among Indians. Government intervention, subsidies and heavy-handed regulation are not capable of achieving -- what millions of young entrepreneurs can achieve -- when set free.

2. We have to de-bureaucratise.

In the field of administration, we are still rooted to colonial rules and red tape. Our obsession with outdated rules and precedents curbs creativity and innovation. We have to be free from a system that places bureaucracy on a high pedestal and denigrates entrepreneureship.

We must radically overhaul all government processes. These processes should reward performance and punish non-performance. For too long, our bureaucrats are in an environment where doing nothing will earn them the highest position.

3. We must harness our natural resources constructively and create large-scale economic opportunities. We must better our land, natural resources and enterprise.

We have 329 million square kilometres of land area. Only half of it is used for agriculture. A quarter of it is degraded. Our crop yields are a fifth to tenth of international yields. India is blessed with varied agro-climatic zones, good rainfall and sunshine all through the year. With appropriate investments, technology and a free policy regime, we can work wonders and increase our agricultural production multifold.

We have abundance of water. The annual rainfall in India is 400 million hectare meters -- four times our annual requirement. Yet only 86 per cent of our urban population and 69 per cent of rural population have access to drinking water.

We have large energy resources -- coal, gas-hydrates, deepwater oil and gas, hydel power, etc. Only a fraction of these are exploited. We use less than one per cent of our coal reserves of 70 billion tonnes. Our hydel power generation capacity is only one tenth of its 180,000 mega-watt potential.

We have eight per cent of the world's biodiversity. Of the 81,000 species of fauna and 47,000 species of flora, 15,000 are unique to India. India has the potential to grow about 8,000 drug combinations using nearly 600 medicinal plants covering a host of ailments and diseases. Thus we have vast untapped resources that can drive economic activity.

4. Foster creativity and enterprise amongst our people. I believe, India's opportunities are not constrained by her resources but by her imagination and enterprise. The ability to think differently will be at a premium where there is equal access to knowledge, technologies, markets and products.

We have to encourage our younger people to blaze new trails and inculcate a psyche to be world class in everything we do. We need to recognise and celebrate the success of our achievers.

5. Reform labour laws. A common factor that runs through all areas of new economic opportunities is labour. The relatively unregulated software industry in India has shown how freedom and flexibility in labour policies can lead to large economic opportunities and employment.

Between now and the year 2025, India has to create 352 million new jobs. This is over and above protecting and enhancing career opportunities of the existing 425 million workforce. Creation of employment opportunities is the single largest challenge before the country.

The labour logjam we are in now prevents creation of large-scale employment opportunities. Existing Indian labour laws protect 28 million jobs in the organised and government sectors at the cost of creating 350 million new jobs -- so badly required. We need a labour policy that is an employment creation policy and not an employment protection policy.

6. Bring about a complete information technology transformation of the economy with special emphasis on government and the financial sector.

Bring government to the doorstep of the citizens. This need not remain a platitude anymore. A complete technological transformation of administration can make it a new norm of governance. The financial sector should be in the vanguard of the wiring of India. All transactions should be in digital format.

With such a framework in place, the stage is set for all financial transactions -- voting in elections, processing of government subsidies, collection of taxes -- all this can be done electronically.

Such a system can work wonders. Corruption can be drastically curbed, revenue collection maximised, tax compliance ensured, election malpractices done away with and welfare schemes highly targeted. This vision about a wired digital India will help realise immense career opportunities in its creation and maintenance. (Continued)

India will succeed

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