Oct 09, 2012, 12.32 PM | Source: CNBC-TV18

What does India need to do to achieve 9% growth?

When we talk about reforms, we often simplistically box them into FDI-related reforms. While those are important, are they really game changers?

When we talk about reforms, we often simplistically box them into FDI-related reforms. While those are important, are they really game changers?

If India does need big bang reforms; it needs reforms in administration, governance, judiciary and policies. But how much of time and bandwidth is given to such reforms?

The question is why don’t we get our act together? Why do we get to a point when the Prime Minister has to come out and say that desperate times call for desperate measures? How did we get to desperate times in the first place? We got to desperate times in the first place because we didn’t address systemic issues that have been staring us in the face for years now.

Also Read: IIFL Cap sees further rally driven by rate cut, reforms

To give the example of diesel subsidy, we made a bit hue and cry about the fact that the government has hiked diesel prices by Rs 5 per litre. For over a decade now, we have had committee after committee from BK Chaturvedi to Kirit Parikh, which was the latest committee, Kaushik Basu the former Chief Economic advisor giving you long-term solutions for what you need to do as far as your oil subsidies are concerned. Successive government after government have failed to take that on and failed to make any of those changes.

So we have come back to reactive policy and a short-term quick fix solution. Is that the idea of reforms?

CNBC-TV18’s panel consisting Arun Maira , Member, Planning Commission, Manish Tewari, Spokesperson, AICC, Rajiv Bajaj, MD, Bajaj Auto, N Chandrasekaran, MD & CEO, TCS and Sanjiv Goenka, Chairman, RP Sanjiv Goenka Group discuss what  India needs to do to get to 9-10 per cent growth.

Below is the verbatim transcript of the entire discussion

Q: You are an outsider who is now part of this system. Do you think big bang reforms are the only way forward? How would you really define reforms for India at this point?

Maira: We need to have reforms along two tracks. One of the tracks is the set of reforms that started in 1991, which was about opening the country up to investments from outside and inviting more competition in the industry. But the other track on which we need progress much more is the one that you mentioned.

I want split reforms to do with management and governance into two. One is coordination or implementation, getting things done. We must make decisions stick. As the finance minister said recently, there seems to be no final decision in the country. A group meets, decides and then someone raises an objection and is not yet final. But the other track is very important; that is the track on which we get governance reforms and reforms in which people are really affected.

First, we must have more reforms that enable small enterprises to grow in different forms all over the country. They will create self employment, enterprises, ownership; that is when we create inclusive growth rather than inclusion by giving handouts and subsidies.

Secondly, we must get to more devolution and local management. We are trying too much to say that from the centre we can manage our states and states can manage every village or every city from the top down. It is not going to work. We are too large and too diverse; the agenda will be too large. We have to implement the 73rd and 74th amendments not just in letter but in the spirit of making the organisations and people capable of managing themselves.

The third comes to business again. We have to get a model of distributed production and distribution in terms of where stuff is available. Centralised production models, whether it is power or anything, will not answer our problems. We need to have a network model of enterprise both in government as well as in business. Reforms around those three tracks will create inclusive growth and sustainable.

People will see their own incomes rising themselves, being included in the governance of what they are living with or whatever they are managing. If you don’t have trust in institutions, which are failing, trust in the government as well as trust in the business, which is what is holding up the process of reforms.

Therefore, track two is more necessary than ever before. If we don’t have track two reforms, track one reform will not proceed.

1 2 3


video of the day

Dont see mkt going anywhere now; like Bharat Forge: Dipen

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.