Reimagining India

To attract investors, it should imbibe some of Singapore’s dynamism and clarity of purpose

When Prime Minister Lee Hsien Loong of Singapore says India continues to be a difficult place to do business with and that it is not yet fully welcoming of foreign investment, there’s an authoritative point he is making. It should have a sobering effect on the euphoria over gains India has made in recent years in rankings compiled by the World Bank in the Ease of Doing Business report and The World Economic Forum for Competitiveness. After all, Singapore is the top source of inbound FDI and the city-nation is also the easiest place in the world in which to do business. Most transnational companies have their Asia-Pacific headquarters in Singapore. There are a few significant concerns Lee has flagged — inconsistencies in policies and rules at different levels of government, lack of openness to foreign investors and global trade, and difficulties in land acquisition. All these can adversely affect the Make in India mission as well as India’s efforts to up its share of global trade.

None of what Lee has said is new. Indian policymakers are all too aware of the problems but have not yet taken adequate measures to remedy them. As Lee said in an interview to The Hindu, “The process of changing the environment and reimagining where India stands in the global environment still needs to be done.” India needs a clear vision and a strategy to get where it wants to as an economic superpower — and that has to be a shared vision of the Centre and all the States. It is no good for the Centre to announce reform measures if it does not have the wholehearted concurrence of the States, because the implementation issues are more likely to arise at the State level. The Make in India vision cannot be made a reality by the Centre alone, or even the Centre and the States that are governed by the same political party. Trade and investment go beyond State borders.

Land acquisition and labour are among the biggest concerns of investors, and States play a decisive role in these matters. Both are touchy issues given the limited supply of land and jobs. That doesn’t mean these don’t need to be fixed. States need to play an active role in helping investors find adequate land, while protecting the interests of landowners and farmers. Likewise, labour laws across States need to change to promote employment creation and skill development and not just flexibility to employers. These can be achieved if the Centre treats States as equal stakeholders in the reforms process and if politicians rise above their respective ideologies. India may not transform like Singapore did under its founder, Prime Minister Lee Kuan Yew, but much can be achieved with adherence to a shared vision.

Published on October 07, 2016
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