Ways2trade: India Growth :In no area of development can we, as a nation, afford a ‘chalta hai’ attitude

WE MUST QUESTION OLD BELIEFS...WE MUST SEEK NEW PATHWAYS... WE MUST HAVE COURAGE TO THINK ANEW

I AM DELIGHTED TO BE WITH ALL OF YOU today and be associated with The Economic Times Awards. Alvin Toffler, the futurologist, had once defined a 'generation' as eighteen years. By that definition, we are not yet a generation away from the new turn we took in our economic policies in 1991. I am not sure if the time has already come for us to be taking stock of the reforms we initiated in 1991.
    By 1991, I do think that mainstream intellectual opinion had comprehensively rejected the regime that was dubbed the 'Licence Permit Raj' before we, in Government, finally managed to dismantle it. That is how social change has always come.
    …..I am delighted that today it is in Mumbai that you are celebrating 15 years of reforms. For it was here that the Bombay Club was formed to seek a reversal of many reforms! There were many doom-sayers who predicted runaway inflation and a collapse of our economic system as we knew it.
    In retrospect, the decision then to move away from an oppressive tax regime to a moderate one has been proved correct and has paid rich dividends. The moves then taken to open up our capital markets to foreign investors, to liberalise the external sector by moving away from protectionist tariff walls, to liberalise the foreign exchange regime by introducing a market-based exchange rate and dismantling the industrial licensing regime have proved to be durable. They have stood the test of time and won widespread acceptance.
    Fifteen years may not span a generation, but they produce a lot of change. Consider the fact that barely 15 years ago most of the awardees tonight were not well known public figures. A few weeks back, at a similar business awards ceremony in Delhi, I found that more than twothirds of the nominees were not even in business in 1991! They were all children of reform, not necessarily children of businessmen. Fifteen years ago you had to be in a queue, use influence and offer bribes to secure a telephone connection, buy a scooter or even get a gas connection. Today, I find farmers, vegetable vendors and plumbers using mobile phones. Nothing symbolises the change in our economy more strikingly than this.
    By and large, the reforms of the 1990s were right. But I admit that there was a relative neglect of investment in agriculture, education and health care. Agriculture and employment generation can be ignored at our own peril.
    THIS FUNCTION, ORIGINALLY SCHEDULED for November had to be postponed because of the terrorist attack on Mumbai in that month. Although I visited the city along with Congress President Smt. Sonia Gandhi immediately after that event, I had no opportunity to speak in public on that occasion.
    Although that horrific event is behind us, the scars it has left remain. I was a resident of Mumbai for three happy years and I feel keenly the pain and anger of the city. To the people of Mumbai, I can only say that we will spare no effort to ensure that their city does not suffer any such attack in the future.
    ...I would like to offer my sincere congratulations to all those receiving awards today. These awards recognize the superior performance of the recipients as individuals and companies in different fields. I must also point out that superior economic performance will not be easy in the year ahead. The global economic horizon is cloudier than it has been for a long time. It will be a testing time for the economy and for individual businesses in all sectors.
    Our government has taken a number of steps to counter the global downturn. We have relaxed monetary policy in a series of steps since October 2008. We are encouraging the banks, especially the public sector banks, to lend more freely to help otherwise viable production units to cope with the temporary stress of the economic downturn.
    The range of steps taken within a few weeks is unprecedented. Nevertheless, I recognise that they do not take care of all problems. There will be a full recovery to our normal economic potential, but this will take place when the global economy reaches normalcy.
    Crises are also opportunities to reposition oneself, overcome weaknesses and be ready to resume growth as the world turns upward. The award winners of next few years will be those that have coped best with these difficult times.
    Finally, let me comment on the very recent and shocking developments relating to one of the well known firms in the IT sector. The Satyam episode is a blot on our corporate image. It indicates how fraud and malfeasance in one company can inflict suffering on many and can also tarnish India's image more broadly. The Government is determined to unravel the full nature of the fraud and to punish those involved under the due process of law.
    Corporate leaders and managements hold positions of trust for shareholders, workers, and other stake holders. Their actions have reputational impact much beyond the reputation of their companies.
    The loan waiver scheme, when it was introduced, came in for much criticism. But it proved popular with rural India as
    the poll result shows. In this interview
    with ET in 2006, Dr Singh talks about
    the scheme and CMP.
AGRI LOAN WAIVER
    PROMPTED BY GROWTH INEQUITY
ET: Has the government lived up to its promises in the Common Minimum Programme (CMP)?
PM: I think we have redeemed our promises in large measure. Barring the promise of reservation for women in Parliament, where we have not had any success, we have initiated action on almost everything we had talked of in the CMP.
ET: The CMP had promised subsidies would be made explicit and provided for in the Budget.
PM: I agree it is not the best way to treat subsidies, but for the first time we have acknowledged these liabilities transparently in the Budget documents. The finance minister has also said he intends to ask the Thirteenth Finance Commission to revisit the road map for fiscal adjustment and presumably he will take these off-Budget items properly into account then.
ET: How did you agree to the farm loan waiver? PM: We wrestled with the problem at great length. The benefits of growth have not filtered down equally to all so we gave the waiver. We want to unleash the animal spirit among our farmers as much as among our businessmen.
ET catches up with Dr Singh at Sewa Gram, Mahatma Gandhi's ashram off Wardha. The PM, in the middle of a tour of drought-hit regions in Vidarbha in July 2006, speaks about the father of the nation and the state of rural India.
SWADESHI IS ABOUT POSITIVE SELF-RELIANCE
ON GANDHIJI
… By coming here, I am telling the country that, in many ways, Mahatma Gandhi was the most modern Indian we have had.We must have the resilience and strength to stand up and uphold our beliefs and not be swept off our feet in the wake of integrating with the rest of the world at a time when the process of globalisation is sweeping all over.
ON REFORMS
I am not unambiguously attached to reforms.I feel that India has to compete with the rest of the world on its own strength.I am not enamoured of India copying the western consumption style.The challenge for us is how to pursue a growth strategy and prosper and become a modern self-sufficient country even at a per capita income of $1,500. There's need to create credible ways of managing public enterprises.The labour market needs to be far more flexible. The financial system needs to be more dynamic.It must not forget the resource requirements of the rural sector.