The ball is now directly in the PM’s court since the FM says that he has been personally monitoring the state of the economy
Mumbai: The Indian economy continues to be in a deep downturn, with sluggish consumer demand and subdued private investment, and the revival measures of the government yet to yield results. The failure of the government to manage the economy is being reflected now in the election results, as also in the student unrest that we see. The ball is now directly in the PM’s court since the FM says that he has been personally monitoring the state of the economy. He has been meeting industry leaders and others seeking suggestions on reviving the economy and has been exhorting the industry from every possible platform, pleading it to resume investments, fully aware that the key to resolving the present economic slowdown, lies in rekindling the animal spirits of the private sector so that they invest in new projects. That would generate new sources of tax revenue, jobs, and economic growth. Speaking at an HT Conclave last month, he said that ease of doing business had improved considerably in India, the government had corrected past weaknesses and he urged the industry to invest boldly. He promised protection, including to bankers, against any genuine business failures. Yet again while speaking at the centenary celebrations of the Kirloskar Brothers Group, he reached out to the industry seeking its help to revive the economy and asked them to invest boldly without letting any disappointment linger. He said that go ahead with new energy and that whichever corner of the country the industrialists went ahead for expansion, the government will walk with it.
The PM asked the industry to move ahead without any fear or hindrance to creating wealth for themselves and for the nation. He reassured the industry that just because a corrupt few are being punished, that does not mean that the government is being tough on them and said that an environment has been created, such that the government is being a companion and not an obstacle. While reiterating his goal of a USD 5 trillion economy, he said that an environment had been created, to work with complete integrity and transparency.
India faces a worrisome situation on its economic front, which has aggravated into a crisis, because of the government’s late recognition of the problem, for sheer political reasons, just as it is politics now that makes the PM miss no opportunity-seeking cooperation to revive a sagging economy. In the recent past he spoke about investing in India at the Birla Group celebrations in Thailand, he then persuaded investors to invest without fear at the HT conclave and now he speaks so again at the Kirloskar Brothers centenary celebrations. He has got into action after much damage has been done to the confidence and financial well being at the ordinary investor and spender, not just because of the disastrous demonetization or the complex GST, but due to the sheer indifference of the government to the lagging growth by giving doctored figures, the unattended woes of the MSME sector and the rising unemployment, the bogus claims of improved EODB and the ever-increasing harsh laws.
It is this confidence that needs to be restored before an entrepreneur will be willing to risk his shrinking capital in a new project. If the PM wants to see a revival of animal spirits in investments, the following needs to be done:-
- Make laws simpler, less complicated and less harsh and reduce the cost of compliance.
- Bank lending to the industry must be revived.
- Improve the EODB in genuine terms as reflected in the ground reality.
- Create an ecosystem where the Indian entrepreneur is able to produce goods at competitive costs.
- Reduce red-tapism and corruption.
- Reduce the contingencies of the babus and the judiciary that can wipe out a company’s capital.
- Restore confidence in the system.
- And finally live up to your promise of minimum government, maximum governance.
The proof of success will lie not when a big corporate resumes investments, but when millions of small entrepreneurs do.