Markets

Polity is unprepared for the next Industrial Revolution

J Mulraj | Updated on November 08, 2019 Published on November 08, 2019

This column, on February 4, 2019, soliloquised whether India was prepared for the Fourth Industrial Revolution.

We are not. Our political class is too busy preparing for their personal future, and fighting over the spoils of office, than preparing for the country’s.

Independent directors are now asked to sit for exams, and get 60 per cent to retain directorships, but no such requirement exists for political leaders who are expected to create our future. Ironic, is it not?

Those nations that take a lead in the Fourth Industrial Revolution, will see their economies flourish and their citizens prosper. Unless our government wakes up and ushers in the next set of bold economic reforms, India may lag behind.

The Fourth Industrial Revolution will involve a mix of technologies. These include 5G telecom, Internet of Things (IoT), AI, robotics, quantum computing, autonomous vehicles, nanotechnology, and others.

These technologies are disruptive, and will lead to job losses. Thus, there is a crying need to establish a network (in both public and private sectors) to re-skill and re-train workers. Although mentioned years ago, one hasn’t seen the formation of such re-skilling institutes. Those teaching there will need, first, to be trained themselves.

China is a world leader in 5G telecom. Other than providing exponentially high speeds for downloads and gaming, 5G would make possible, eg, remote surgery or autonomous vehicles, among other benefits. We don’t see Indian companies in the forefront of developing 5G, and will, likely, need to buy the equipment/technology. But 5G also requires investing in a new telecom tower infrastructure; existing infra is not used in 5G. With a ₹92,000-crore outgo, following an adverse ruling by the Supreme Court, on top of high debt, telcos (barring one) won’t be able to install it; so India may lag in the 5G race.

We also don’t see much work done in developing the other technologies, such as AI, quantum computing, IoT, robotics, etc.

Instead, what we see is the attachment of ₹1,600 crore of assets belonging to the aide of a former CM indicating that a chunk of the body politic is gangrenous and corrupt.

What we see is open loot of the savings of individuals, whether through Ponzi schemes (perpetrators have enough stolen money to hire top lawyers and influence the system) or failed banks/NBFCs or, now, credit/debit card frauds. It was the government that compelled digitisation (Aadhaar linked to bank accounts, limits on cash withdrawal, etc), so it ought to be responsible for frauds, right? It isn’t. Deposit insurance is ₹1 lakh, unchanged since inception, even as MPs want inflation-adjusted salaries for themselves.

There are 90,000 cases pending in courts for over 20 years, surely a gold standard for justice denied.

The FM states that the next wave of reforms will be introduced soon, not desirous of ‘missing the bus’. These would be land reforms and labour reforms. Property records are not well kept, allowing for manipulation; witness recent scandals pertaining to cheap land acquisition by ‘connected’ people, with instant profit accruing.

Indian manufacturing is uncompetitive (which is why we didn’t join RCEP) because land cost is too high and bounded by restrictions, including rent protection laws which need to be fairer, as well as inflexible labour laws that lead to poorer productivity. So, the next stage of bold economic reforms is needed badly. Also needed badly is a pursuit of next gen technologies. China does this as a state policy. In India, the attention of the polity is diverted to the past, not the future.

There are some important cases to be decided by the apex court in the next fortnight. Some may negatively impact the stock market, warranting a move to quality.

The writer is India Head — Finance Asia/Haymarket. The views are personal.

Published on November 08, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.