The Hindu Business Line : India in 2006: Forging ahead to the forefront

A stable political environment, law and order, and a reasonable governance all point to an India heading with confidence into a New Year. Along with IT and ITeS industry, finance, insurance and real-estate see an optimistic future. As much as the country is attracting foreign investors, its businessmen are making acquisitions abroad. The country has also handled itself well at international fora, notably the WTO, but has to be extra vigilant at home with extremism of various hues playing havoc. B. S. Raghavan on the year ahead.

A guardedly optimistic India opens the gate to a new year, indeed a new era. — R. V Moorthy

IF YOU stand on the beach, you will find a lot of turbulence in the immediate vicinity with foamy breakers swirling round your feet, giving you a feeling as if you are moving fast in the reverse. But if you lift your eyes and look at the broad expanse of the ocean yonder, you will get a sense of its immensity and depth. Such is also the case with a democratic polity. The ephemeral takes over the eternal. Mr L. K. Advani's resignation as BJP president gets an eight-column headline on the front page. A farmer tripling his productivity is consigned to the bottom of the nth page, if at all he finds a mention.

The commotion of rambunctious politics in the immediate present leads us to believe that things are chaotic and the situation is hopeless, while beyond and outside of our gaze, the creative energies of the people are finding vent in a variety of activities in the economic, social, cultural and technological fields and laying the foundation of a bright future. To use another analogy: Just as the British are said to have founded the Indian Empire in a fit of absent-mindedness, "We, the People" of India are also taking the country to the centre stage in a fit of abandon, roughing out the pulls and pressures of the "functioning anarchy" that Indian democracy is.

Certainly, we have a right to a stable political environment, an assurance of security and maintenance of law and order, and an efficient and honest governance. Conditions in these respects are not ideal, but may not take a calamitous turn in 2006. The Prime Minister, Dr Manmohan Singh, has shown himself adept in taking the Left's for-the-record protestations over some aspects of economic reforms in his stride, while his Government describes a circle which at every point looks like a straight line.

The core members of his team, particularly those responsible for planning, finance, commerce and industry, communications, shipping and transport, petroleum and natural gas, civil aviation, tourism, energy, information technology and rural and urban development, have been on top of their form. "All systems go and full steam ahead," may well be the motto of the New Year, making it possible to maintain the rate of growth at 8 per cent or more and improve upon the fundamentals.

Paradigm of parallel streams

Fortunately, India has evolved into a paradigm where several streams of nation-building activities can run in parallel without impeding one another. To mention a few dominant ones: The political stream with our breed of politicians playing their own games in their own circles; the administrative stream hammering out policies and overseeing implementation on its own steam; the scientific stream assiduously engaged in its own pursuits in the vast network of national laboratories and research institutions; the corporate stream, including both public and private sectors, coming to grips and terms with the ever-widening vistas of free market in the era globalisation, technology revolution and knowledge explosion; the e-stream which is proceeding apace enlarging the people's access to public institutions wired into a well-knit network, curbing, in the process, the scale and extent of corruption; the grassroots stream comprising the panchayats and self-help groups with the potential of morphing into a self-reliant, self-assured people's movement; and the civil society stream with wide awake and keenly aware bands of activists keeping all other streams on their toes. All signs are pointing to their becoming more empowered and assertive in 2006, acting as checks and balances on one another and cumulatively providing the stimulus for continued progress along desired lines.

On the industrial front, there is a lot to rejoice in the thought that the hectic India of today, the cynosure of the world, the rising star of the information technology (IT) related sector and the putative economic giant of tomorrow bears no resemblance to its simulacrum of barely a decade and a half ago, scrapping the bottom of the foreign exchange barrel, pledging its gold to escape the ignominy of default in debt repayment, yoked to the Hindu rate of growth and bogged down in a slough of despond. There is a "can-do" spirit that is permeating all walks of life.

The deadweight of the Government that economic players used to feel in day-to-day decision making is lifting with its withdrawal — haltingly, no doubt, but unmistakably, nevertheless — from the "commanding heights", which it had once occupied as if it was an invading army with a mission to subjugate, and with its wearing the mantle of an even-handed regulator, supportive facilitator and impartial umpire.

Goldmine of IT-related services

The playing field is very nearly level not just among domestic teams of business, commerce and industry but also vis-à-vis global competitors. Indian firms are establishing beachheads abroad, playing at mergers, acquisitions and collaborations with effortless ease, conquering new markets, absorbing new technologies, figuring prominently in stocks and shares listed abroad, aiming to become multinationals in their own right, and generally putting the authentic stamp of their confidence and competence on whatever they undertake.

It is as well because corporate chieftains are running out of alibis and excuses and being left with no option but to prove themselves and justify the trust investors, customers, consumers and other stakeholders have placed in them. The biggest challenge before them is to hold India Inc. aloft as a shining brand of world class standards in quality, customer service and price-competitiveness.

The new year and beyond hold the promise of unlimited scope to expand and diversify business opportunities with nearly 25 per cent of the world's business process outsourcing and 12 per cent of other services such as animation, content development and design amounting to $25 billion being within India's grasp, if only the corporates in the fields concerned go all out to grab them. Especially, firms in the IT-related services and BPO can look forward to a bountiful 2006.

The Microsoft chief, Mr.Bill Gates, has given a big build-up to India, calling it "the new Mecca for high-technology investments" and putting $1.7 billion into the company's operations in India over four years. Close on the heels of this announcement, Intel and Cisco Systems also announced investments totalling an additional $2.1 billion over the next few years.

The distinguishing feature of these investments is that they are going into world class Research and Development, and not to the low-level outsourcing to call centres. In 2005 alone, IT and IT enabled services, BPO and biotechnology accounted for more than 2,00,000 jobs and things from the employment angle can only get better in 2006, with Bangalore, Chennai, Hyderabad, Pune, Mumbai, Pondicherry and Madurai as well as even smaller towns such as Indore and Jaipur being notable beneficiaries. Other sectors too, such as finance, insurance and real-estate, are poised for steady growth in terms of volume and burgeoning demand for skilled manpower.

The visit of the US President, Mr.George Bush, in the early part of 2006, will need to be handled with finesse, given the many raging controversies surrounding him and the coming to an end of his term in 2008. Although differences of opinion persist over the defence and nuclear deals with the US, the Government's record on the international front conforms to national interest, as evidenced by India's commendable role at the World Trade Organisation's Hong Kong Ministerial and the ASEAN. The South Asian Free Trade Agreement is a feather in its cap. On another plane, the patience of everyone concerned with the ongoing dialogue with Pakistan and political groups in Jammu and Kashmir is wearing out and this may see the issue being taken to a definitive conclusion during 2006.

Menace of terrorism

Is it all, then, going to be smooth sailing? Not at all. India is no doubt doing several things right, but still there are still a few things that can go wrong. Soaring oil prices may put paid to all the efforts to make Bharat Nirman a success. The dangers from Naxalism and Maoism may spread and intensify. A new threat to India's security from the Pakistani side of the border may emerge. The Government's mettle will be on test in anticipating and countering these contingencies.

The most menacing of them all is jihadi terrorism. There can no longer be any doubt that the Al Qaeda-led groups are now having the whole of India in their cross-hair. Any omission on the Government's part to arm itself to the full will have catastrophic consequences. If the UK and the US, where democracy has deeper roots, can put on the statute book tough laws tailored to crush terror ruthlessly, there is no point in India indulging in a fruitless debate over basic rights and the like and taking chances.