THE EXCHANGE. Do it right, right now

It is Budget season. Intellectuals with an opinion and access to a microphone, computer or pen, are quick to deliver their list of suggestions. In my opinion, though, the time for suggestions is long gone; now it is time for the leadership to make tough choices. The paradox is that it’s not hard to do the right thing; what’s hard is deciding what is the right set of things to do.

In our imperfect world, decision-makers usually come across a lot of ‘not-so-good’ choices and a few ‘ultimately correct’ ones. But leaders must decide because that is their job. We have had generations who may have preferred to do what looks good; but looking good does not triumph over doing good. Therefore, the courage and integrity to do the right thing has gained ground.

Finance Minister Arun Jaitley is having to contend with inherited problems of significant magnitude and complexity. He is hindered by two successive monsoon deficits, of course partly mitigated by favourable oil prices. Perhaps the last time India faced such a long list of issues was in 1991; but that was also a period of less global integration, as well as a less polarised political scenario at home.

But an impaired polity is the perfect platform on which to unleash literally a flood of well-publicised and precisely implemented executive actions. Let the country understand that the leadership is capable of surmounting and putting behind it the legacy of creaky execution.

A first — even if somewhat delayed — step is more aggressive tackling of inherited issues; here the Centre has stepped in positively but, in my opinion, too gently.

Capitalisation of banks through the markets, protecting government stake with a 26 per cent plus a Golden Share stake, can still allow a significant re-rating of the sector and provide resources for growth. All the efforts being contemplated to attack the NPA situation may not yield results on the desired scale. Even insolvency laws — excellent for the long term — are unlikely to deliver in a short span. Aggressive recapitalisation will also assuage the Reserve Bank of India’s concerns.

Healthy banks can also be a channel to bolster consumer spending and investment (in property, cars, and the like) through enhanced consumer credit. The idea of an emerging, healthy consumer sentiment may be exactly what revival of the private business investment cycle is waiting for.

On taxation, there is no reason to fault the strategies advocated by the Centre. Even so, when uncanny application of tax laws creates so much negative discussion, ill will and uncertainty both abroad and at home, some aggressive and visible steps (instead of passive acceptance) will work wonders. Retrospective cases come to mind immediately, but there are others — not limited to capital raising, transfer pricing, and so on — where kosher transactions are being put to much pain. We are now beyond platitudes, so firm actions will have great multiplier effects.

Just days ago, our highly respected Ratan Tata made an all-encompassing argument. In effect, he said promises are necessary to generate investment interest but are in themselves insufficient for investment to actually take place. Businesses, whether abroad or at home, must be convinced of a conducive environment before investing. This goes beyond just ‘ease of doing business’ and, to be fair, depends more on delivery at the State rather than just the Central level. I believe the Centre can spell out much more as to what Niti Aayog must do for generating results from States.

Assuming that the economy is powered for some time by public investment, and improvements elsewhere create a healthy consumer market, the challenge is to see how the benefit of demand is directed to domestic enterprises rather than helping those abroad. It is a no-brainer that India must find intelligent ways to protect its industrial base from external assault without violating its legal obligations and without being protectionist in approach.

Looking at mindset needs of the coming decades, I believe it is time to start planning how we can create a sizeable cadre in government that is more ‘managerial’ than ‘administrative’. We need to be exposed to global thinking and practices on a scale not contemplated before.

Why can we not have a merit-based system, selecting, say, 5,000 youngsters each year, to be sent abroad to study across a range of disciplines — engineering, commercial, legal, administrative, etc. Their fees and expenses should be borne by the government against binding agreements (a condition precedent) that they will work full-time for the government for a minimum period of 10 years after they return to India.

I need not elucidate the expanded horizons of knowledge, thinking or implementation ability, and entrenched integrity this cadre can provide. The cost of training this base level from the age of about 22 years is likely to be more productive than training someone with entrenched thinking at 35.

In closing, one last thought on India’s time zone. Our aim must be to align India’s time for greater impact vis-à-vis the world. India is perhaps the only major economy with a time zone with a 30-minute offset, putting us in the company of Afghanistan, Iran and North Korea. Perhaps it is time to consider a one-time move to end the historical anomaly by moving our clock by 30 minutes. Our IST is misaligned to the realities of our seasons and sunshine hours.

Aligning IST to the East may be in India’s larger interests, narrowing time differences with Asian economies. West Asia will not find it problematic to adjust. Such a move may help improve our national productivity as well as make for better integration with Asian financial markets and businesses.

A senior official told me last year (comparing the standing of India and China), “ jab hamari kathni aur karni main fark kam hoga (when the gap between our talking and action decreases), we will be taken more seriously by the world”. Truer words were never spoken.

This column explores ideas and opinions on Indian enterprise and economy. The writer is an entrepreneur and former president of Ficci. The views are personal

COMMENT NOW