The Hindu Business Line : 2007: Promise and lessons

Year 2007 might just go down as one in which Indian industry, deliberately, and the government, without meaning to, redrew their respective spheres of influence, one expanding it globally and the other narrowing it. Fuelled by ambition and surging forex reserves from $177 billion at the start of the year to $263 billion in late December, firms across the spectrum, from steel to liquor and IT, crossed the seven seas to Britain, the Americas, Europe, even China, for new millennium empire-building. The UPA government also embarked on a voyage of sorts, circumscribing its role to cheerleader from a front-line leader in 2005.

A government that simply exuded ringing optimism and little else was good enough for the organised economy on a roll; 9 per cent growth through successive quarters, forex reserves inching towards $300 billion, consumer spending largely undiminished despite high interest rates and a still-healthy credit off-take. No wonder, at year-end business confidence is still cresting. Perhaps the scale of achievement evident early in the year had something to do with the organised sector’s self-confidence. In January, the UK’s Takeover Panel approved Tata Steel’s bid for Britain’s largest steel-maker, Corus. The $12-billion deal was not simply the largest by an Indian but also catapulted Tata Steel into the world’s top-five league. When the UB group bought Whyte and Mackay in May, it bought not just a spirits firm; it acquired a piece of Scottish heritage. Reversing tradition, domestic firms bought into energy assets, coal mines and oil exploration rights, overseas. Domestically, wealth creation has never yielded such harvests; never has the stock market witnessed the kind of climb it did in 2007, the Sensex shooting from around 12,000 in March to 20,000 at the year’s end. Globally, India is now considered Asia’s rising giant. And there lies the promise of 2007 — a landmark year, perhaps, in the age of the South Asian elephant.

For New Delhi the year 2007 holds lessons as the watershed between the current stage of industrialisation, that is almost over, and the next, waiting to be born. Pious rhetoric or woolly-headed legislation will not get the land needed for investments nor will optimism get roads built, power into the homes of the vast majority without it or jobs for the unemployed. A good place to start would be a coherent and non-partisan land acquisition policy, preferably with the consensus of States, delivery schedules for public projects and an accountability code that binds every policymaker to them. Then, Dr Singh’s team can be somewhat ready for their toughest test in 2009.

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