The Hindu Business Line : No way to go but up in 2008

The real and abiding India is its people who deserve their hands to be strengthened, their expectations to be fulfilled and their lives to be enriched. The sole item of the agenda for 2008 should be good governance, from which alone can these benefits flow to the people, says B. S. RAGHAVAN

All bets are on India, already the fourth largest economy, after the US, China and Japan, in purchasing power parity (PPP) terms. All predictions are that it will outpace the land of the rising sun and occupy the third position within the next two decades, or sooner.

By playing the cards right, it may even give the Chinese juggernaut a run for its money. Is this too grandiose? Not one of the outfits in the business of making a comparative appraisal of country prospects thinks so. That India has no way to go but up seems to be the prevailing view.

Of late, it is not even hedged by the customary ‘ifs’ (say, removal of infrastructural bottlenecks and going through the full gamut of economic reforms) and ‘buts’ (for example, political will, bureaucratic rigidities). What is happening?

What is happening is simply this: India has become an intellectual, professional and economic foeman worthy of everyone’s steel! India’s political, economic and business leadership has taken to offence as the best form of defence and begun reaping the rich rewards that await those who carry the war into the rival’s camp.

Witness the rapidly rising number of Indian companies being listed on the London and New York Stock Exchanges and Nasdaq. Also witness the stunningly huge amounts of capital being raised by them; for instance, mark two of the largest global rakings of $6 billion by ICICI and Sterlite Industries on the NYSE just the other day.

“Indians are coming, Indians are coming!” might well turn out to be the alarm call of business barons of the industrial world. They are making sure that none of the acquisitions abroad by Indian companies will be smooth sailing. But the following recital will testify to the grit and gumption of Indian companies.

Sweet revenge

Before Mr L. N. Mittal, the world’s largest steel-maker, could call the second largest, Arcelor, his own, he had to contend with the raised hackles of the business communities and trade unions of France, Luxembourg and Spain.

The then President of France, Mr Jacques Chirac, himself publicly discouraged the deal, not because, as he avowed, there was anything against ‘a non-European bidding for a European company’ but because it was ‘contrary to usual practice’ in that the bid was “purely financial in nature” , and, according to him, backed by no reasons, no explanations, and no industrial development plan.

Tata Steel’s bid for Corus too had to overcome similar resistance. It was a case of sweet revenge, though, for an insult that Ratan Tata’s grandfather, Jamshedji Tata, had to suffer in 1902 when, in response to his offer to supply steel rails, Sir Frederick Upcott, Chief Commissioner of Indian Railways, retorted, “Do you mean to say that Tatas propose to make steel rails to British specifications? Why, I will undertake to eat every pound of steel rail they succeed in making!” Well, had he lived, he would have had a severe bout of indigestion!

The acquisition of the Atlanta-based aluminium giant Novelis and Canadian company Minacs Worldwide by the Aditya Birla Group had also to cross many hurdles. Indicative of the fear of India’s increasing global clout is the latest instance of racist rebuff of the Tata Group by the Orient Express Hotels and the innuendos and insinuations surrounding Tata Motors’ deal with Ford Motors for producing Jaguars and Land Rovers.

If the acumen and mettle India Inc. has demonstrated through its conquests are matched by superior management, phenomenal expansion, impressive turnover and multi-dimensional impact on social and economic growth, India’s march to the status of a global power will be well-nigh unbeatable and unstoppable.

Fortunate circumstances

There are other features of the Indian scenario that point to an all-round resurgence round the corner. The economy has grown wings of its own, and is taking off on several fronts without, thank God, any prodding or support from government.

It is in a way getting more and more insulated and immune from the vagaries of politics and prescriptions of bureaucracy, and becoming self-sustaining. The process is being facilitated as well as hastened by two fortunate circumstances. One is the presence in leadership positions of manifestly perceptive and competent professionals whose intellect and expertise in steering the ship of state has so far enabled it to weather many a storm.

Hardly has one come across in recent times a combination of such able and effective policy makers and path-setters in the Ministries and regulatory institutions that matter. One can be proud of the immense benefit that the country has derived from their steady and sure hand on the levers of decision-making.

The influence of the second advantageous factor may not be as palpable, but is profound nevertheless. It is the resilience and vitality of India’s political system.

Its heartening aspect is that the seeming divergence among political parties is confined to micro-issues, while at the macro level, touching on policies for national security, economic growth, social justice, elimination of poverty, creation of job opportunities, provision of basic amenities and urban and rural development, they are not too far apart.

There are undoubtedly differences in priorities, timing and methods in the stance taken by the parties, but these are certainly amenable to being bridged by consultations and accommodation. Most of the conflicts that have arisen till now are the fall-out of flawed handling of the art and science of political management which is vital for the harmonious cooperation among various political parties in a democracy.

Pulls and pressures of coalition politics and participation at the Centre of regional parties with insufficient grasp of national and international ramifications of a given policy or course of action further complicate the situation.

In such a scenario, the forging of a consensus based on trust and confidence essentially depends upon cultivating a measure of foresight, tolerance and patience, ensuring transparency in dealings and keeping communication channels unclogged. It is eminently preferable to be abreast of likely contingencies and retain the initiative in one’s hands, instead of appearing to act in response to pressure from domestic and foreign investors and the intrinsic compulsions of growth itself.

Greatest strength

It may be unrealistic to expect the Government, in the last year of its term, and especially in the background of reverses in Gujarat and Himachal Pradesh, to summon the will and energy to evolve a mutually acceptable plank on such intractable issues as subsidies, pension funds, operation of retail outlets by corporates, labour reforms, and opening of the financial and insurance sectors.

Even so, is it too much to ask of the constituents of the United Progressive Alliance, its supporters in the Left and the Opposition at least prepare the ground in 2008 to make it easy for the new Government to pick up the thread of the unfinished business of economic reforms from where it had been left and take it to its logical conclusion?

While the outlook for the upwardly mobile nation is no doubt bright, it would not be wise on that score to lower the guard against lurking internal and external threats to stability and security.

The fact that India stands tall in the estimation of the world could itself be a provocation to certain types of perverse and pernicious elements, leading them to mount terrorist attacks.

However, India’s security forces are more than a match in their alertness, preparedness for all eventualities and armed might to hostile or traitorous groups of any description. They have displayed their fighting spirit and patriotism against all odds, whether it was the terrorist attack on Parliament, or Kargil or Siachen. There is thus every reason to hope that 2008 will pass off without any catastrophic incident.

India’s greatest strength, as has been evident time and again in the 60 years since Independence, is the self-corrective nature of its democratic ethos. Whenever things look like taking a slippery path, the instinct of self-preservation asserts itself, pulling the country back from the brink and repositioning it on an even keel.

Looked at from another angle, India is like a gargantuan punching-bag on which different groups at different times vent their spleen till they see the light and come back to the path of amity and goodwill.

The post-Partition bloodbath, States reorganisation-related disturbances, the independent Dravidasthan demand, the Rayalaseema agitation, the Mizo National Front threat, the anti-Hindi riots and the Khalistan killings — all seemed, while they lasted, like the end of the world for doomsayers, but they all passed only to become footnotes, if that, to history sooner than we hoped for.

So also will the tribal insurgency, Kashmir militancy, jihadi terrorism and Naxalite violence, on one plane, and, on another, Nandigram, Narendra Modi, the nuclear deal and other alarums and excursions. They keep everyone worked up for the nonce but they are not all that make up India.

The real and abiding India is its people. They constitute its precious asset. Most of them are law-abiding, helpful, friendly souls going about their quotidian duties and obligations without wishing ill of anybody.

Their hands deserve to be strengthened, their expectations fulfilled and their lives enriched. That is all good governance is about and that is what the sole item of the agenda for 2008 should be.