Wishlist for Modi 2.0

Modi 1.0 many felt was a aberration. For those in the business world who had to deal with the govt and had dealt with the Gujarat govt there was optimism even if the scale of victory surprised most. Those who have learnt from Indian history, industry I think has waited to see if the Modinomics will continue and if so with what strength. So even if they made all the right noises they didnt actually open their cheque book. The bad debts of banks, the new bankruptcy laws, demonetisation, bizmen fleeing the country, the harsh criticism on a suit boot sarkar, the lack of majority in the RS all made Modi 1.0 less reformist than expected. Grappling with understanding Delhi and gaining control over the "system" and then trying to change the style of working took time. 5 years is long enough and if the investors waited they could not be blamed. But the country did see substantial progress, performance and development which is what created Modi 2.0.

The 2019 elections are over and Modi 2.0 is back with a thumping majority and from now barring for certain issues Modi cannot claim any excuses for higher, faster, better - performance, progress & development. There are a a zillion things to do in a vast country like India and nobody's wishlist is the final comment on expectations. It is just one more wishlist and here is mine.

Jobs:

Its a fallacy to say that jobs did not get created. Yes, formal jobs did not get created fast enough and they are ones that catch media eyeballs. But the demographic dividend is a fact and that it can become a nightmare is also fact. While formal white collar jobs are a important indicator what is more important is the blue collar jobs. This will suck in the unemployed youth from villages and tier two cities where farming is no longer a viable option. This will lead to better farming economy and so have a double benefit effect for India. The ONLY way that such youngsters can be absorbed is by promoting Manufacturing. With the government actively promoting EV's the Niti Aayog has published a report that shows that India can become the manufacturing hub for the globe in batteries which require labour. Also many companies with manufacturing in China are looking for a counter magnet. Modi 2.0 must leverage this and encourage manufacturing in a very aggressive manner. The Lithium needed for batteries is mostly in China control. So China can also have a vested interest in this and with a mutual business/economic benefit China can be convinced to support India in international forums. So manufacturing can have a domino effect for India and must be the first priority for Modi 2.0. The other industries where manufacturing can be actively promoted are Defense, Aerospace, Automotive, Value added agricultural produce amongst others.

One big failure of Indian manufacturing and here the govt cannot be faulted is that while global companies truly manufacture in India many Indian companies prefer to import from China and brand it in India. They are lazy and don't have the drive. Modi 2.0 must act tough on such industrialists by making local tax and other laws encourage the real manufacturer as against the trader. I call Pseudo Manufacturing the biggest bane of India and Modi 2.0 must study the reasons and prod the Indian industrialist to change.

Tourism:

Traditionally India and Indians have been traders, self employed and over the last 7 decades even if there have been some blips approximately 50% continue to be on their own/informal jobs than formal. So when Modi 1.0 talked about Pakoda economics and the economists bristled and outraged, it showed their lack of understanding the under belly of Indian economy. Tourism can create more jobs and revenue than the Infotech industry if handled right. Tourism cannot be a socialistic strategy where you want every Indian to go see the Taj Mahal. They have better things to do. Have a hard nosed capitalistic, profit oriented approach to tourism and a 360 degree effort will result in wonders. Using Swachh Bharat ensure that monuments and areas of tourist interest are sparkling clean with excellent toilets and drinking water facilities. Have curio and gift shops in an organised manner in a air conditioned, bright shopping space and allow a large number to sell their wares in a formal manner rather than chase tourists and irritate them. Ensure that children are not selling stuff giving a wrong impression about India. Leverage the CSR of large companies to establish the infrastructure, give them branding space and finally promote specific activities globally than just advertising Incredible India. Have a 2 hour cruise down the Ganga in a luxury boat and charge 50 to 100 $ per person with dinner and wine. Stop being apologetic about earning revenue and profit and charging the "high" price and wanting to be cheap all the time.

Labour and Land Laws:

For any meaningful manufacturing activity to happen the prices of land either have to reduce or land available at nominal cost. Today 90% of the businesses are profitable if you take away real estate costs. This situation results in investors focusing on making money from real estate than manufacturing or even retail etc. Think of having a land bank in which the owners of the land are shareholders and they rent the land for long periods with suitable rental escalation. The capital costs come down, land acquisition pain reduces, the land owners don't feel cheated after a couple of years when prices go up. Existing land laws while seemingly protecting some, is still a huge disincentive for investors.

Labour laws similarly are archaic and the assumption that people do not accept risk is a fallacy. Everybody said much the same about LPG subsidy, yet Modi defanged it easily. So here again the laws need to be tweaked to make it easy for businesses to invest in and hire people. Sure, do have protection but this cannot become a sealed tomb. Easing land/labour laws can yield a multi billion dollar investment frenzy in India.

Agriculture:

Today the farmer has neither information, nor water, nor market access and all he has is doles, subsidies, loan waivers, MSP and such which neither make him strong nor the country. The existing APMC acts must be abolished and a nationwide network of farmer markets established with kiosks in every area where farmers can get information on what is happening elsewhere, who is growing what, at what price etc. Information is king. Encourage corporates to get into long term agreements with farmers. Create the Amul co-operative type institutions wherever possible to ensure that farmers are also stakeholders in their future. Irrigation, interlinking of rivers, rain water harvesting, creating/ protecting lakes, sewage systems to prevent above/ground water contamination must be taken up in a integrated manner. This is not a 5 year project but a 15 year project but once started with a vision like in the case of Cleaning Ganga, results will be visible seen in 5 years creating confidence.

One can go the extra mile and declare agriculture as a industry and pave the way for it to get banking support in a far more professional manner and then make certain income taxable.

Transport:

This is a complex subject where public transport, private transport, roads, rail, waterways, airways all integrate into a complex web. However this also has the potential to usher in development on a massive scale. This also needs and demands a integrated policy and not silo types of policy. For example to attain better emission norms India is jumping one stage of technology and going from Euro IV to Euro VI within 3 years but focusing all resources only on Electric vehicles. When one sees the emission benefits you would find that CNG and Hydrogen probably contribute more easily to attaining Euro VI but these fuels don't get the due policy push like in electric with FAME. Electric is a short term blip but unless integrated with other options cannot become a long term bing bang.

Cities chase metro rail which take decades to get ready but there is no effort to provide suburban rail options where available with ready infra already existing. The additional effort, cost and time to convert this to one of the modes of transport is low. However every public transport authority thinks they "lose" business and try to create monopolies thus affecting overall efficiency. For example a more frequent fast suburban rail connecting major metro cities to nearby towns can ease the pressure on the metro cities since people can then love in nearby towns and commute to work. This will also encourage development of infra and other services in the smaller towns faster. Urbanisation or Rurbanisation is the key.

Laws:

While Modi 1.0 did kickstart a number of initiatives to change archaic laws a lot is still left to be done. Innovation, Technology, Science, Informatics, Business ideas you name it they are changing so fast that laws and systems cannot keep pace with them. Modi 2.0 must appoint a committee of select young MP's, officers, industry experts who will meet periodically and analyse, assess, discuss and determine the likely effect of developments globally and in India which can affect India. Laws and regulations must be sought to be changed in a proactive manner rather than as a reactive manner. When done re-actively what happens is that vested interests, pressure groups claiming votebanks and loss of business will try their best to scuttle progress. This will only delay and affect economic opportunities for India. If such a system were to be place we would not have the mortification of having a India story Flipkart being a Singapore company instead of being a Indian. Across the spectrum of industry be it real estate, engineering, pharma there are developments happening which if not nurtured will go elsewhere and we will continue to be followers rather than leaders. Just imagine if we had formulated guidelines for the likes of Uber, Amazon, Swiggy etc well in advance rather than after the event what benefits it would have.

Even as we read this, what kind of laws protect the service provider, the service facilitator and the customer when you use say a service like Urbanclap? What invariably happens is that the carpenter, plumber, beautician tells the customer that the next time they need to service to call them direct rather than through the app. When this happens how can a service like this scale up, be profitable, protect customers and encourage other such innovations?

Look at how often we end up fighting with some global company for the IP of some benefit which India has known and used for centuries. Why cannot such a committee identify a dozen Indian benefits and obtain global IP using a SPV so that in future any company that leverages that benefit would pay this Indian SPV a royalty. The revenue opportunity is humongous. Just imagine a Indian SPV having taken IP on say Turmeric, the brand Basmati etc. These are simplistic examples but if you scratch the surface there are many you will find. Unlike what many of the educated say, India does have a rich history of knowledge and this must be harnessed profitably and not as a hashtag driven outrage on social media.

A parliamentary committee leading a team of youngsters, experts, subject matter specialists can facilitate and create a road for progress well in advance in real time basis and will be force multiplier for Indian progress. This will reduce litigation costs, risk for business, improve India's image when new businesses start etc. The members would be co-opted into the committee to brief and share notes on technology and business developments globally and in India periodically and when anything catches their attention the young MP's can then work with the concerned ministries to frame laws, regulations etc.

To give a example of a rather old law, that needs change is that citizens today are mobile. Registration of vehicles could be in one state but every time they move to another state, taxes, re-registration are all huge financial burdens and time consuming. Can this be changed to ease the lives of vehicle owners ? There are many more like this and a crowd sourcing of issues faced by citizens can help Modi 2.0 address these on priority.

Education:

Primary to high school education must be given pride of place in India. graduating from 10th /12th must be the milestone in India rather than get a degree. Today attaining a degree is never because it serves a purpose. It is because it helps a person to pass through the filters when chasing a job. That is why you find media reports of persons with fancy qualifications applying for jobs as peons etc. This situation prevailed way back in the 70's and still prevails.

The secret is to demystify the degree, give dignity of labour a high seat in society, make vocational jobs respected, profitable and thus create more jobs than degree holders. Higher education must have a purpose other than being a filter to cross barriers. Today the cost of educating a child in nursery/primary school is far higher than obtaining a PhD in JNU. If one goes by media reports the cost of doing a PhD in JNU is a few thousands while the admission fees for a half way decent nursery preschool in Bengaluru is about Rs. 100,000. THIS is what needs urgent attention. This again will take decades to change but unless a beginning is made 5 years from now it will not gain enough traction to become self sustaining. Local communities and families must get involved in locals schools with voluntary work that must be encouraged. The number of things to do and ideas are many but a beginning must be made.

Equally important the curriculum must be periodically changed to reflect modern life and changes even while history must be taught so that each generation appreciates what they have in a more positive manner.

Security and Defense:

This is the last but not the least where Indian must play catch up over decades of neglect. Modi 2.0 has a golden opportunity to bury the Bofors ghost forever and ensure that the system is no longer in perpetual fear of the ghost and can take decisions that are pragmatic, speedy and the best under a given set of circumstances. When decisions take decades, technology and security scenarios change and invariably decisions don't meet reality. This is a sector where while private sector involvement is welcome only the govt and public sector can take the lead given the nature of the beast this industry is. Modi 2.0 must usher in a professional global class public sector by unshackling the major units like HAL, BEL etc so that they can actively go after global business, technology partnerships and do so without fear and with profit motive. While make in India is important, this will not happen just because we force somebody or talk of offsets. The encouragement must be much more than that. One way is to allow greater shareholding of global companies and special economic zones for defense manufacturing.

Corporate affairs and Banking:

Any company from abroad wanting to set up shop in India and start doing business where its Directors are living abroad faces a nightmare by the time they finish all formalities and registrations. However much Modi 1.0 improved the ease of business ranking it hasn't yet percolated to the system including the private sector banking. The procedures and documentation even in terms of day to day operations become rather cumbersome and a lot of wasteful activities. While the intent behind certain requirements is noble, the implementation is poor. The biggest culprit here is the private banking sector than the government. There is no consistency in terms of documents demanded across govt departments and banks, everything is ad-hoc and subject to an individuals interpretation. So each bank, each department, each officer decides to either give you a excellent experience or a nightmare. Many in the company affairs system and banking sector have decided that their customer is a criminal who is handling illegal money from illegal business and accordingly try to protect their own selves with questions, hurdles, documents that make no sense. Some govt departments also behave in the same manner. Expecting private sector industry/banking to reform is a pipe dream. Modi 2.0 must use the RBI and its corporate affairs ministry to establish systems that apply to all institutions and there is no scope for individual interpretation. Right now foreign companies and directors have an experience that is far less than what can be termed even satisfactory.

With various communication options, time zones, the way companies conduct business has changed including board meetings. Again laws while framed with noble intentions make it cumbersome and again at every stage the approach is - you are guilty until proven innocent. Modi 2.0 must attempt to change this attitude and systems.

Conclusion:

The wishlist as mentioned can be longer than the thank you speeches in academy award ceremonies and will vary depending upon the person. But one thing is very clear, the industry both in India and globally have seen and experienced Modi 1.0, they waited, they now have Modi 2.0, they know the rules of the game, they know that the systems will stay, they know the expectations and if they continue to keep giving excuses they have no reason to blame the govt. It only then means that they don't like doing biz in a positive atmosphere. Industry can no longer give excuses, no longer delay decisions and they must now walk the talk. Modi 1.0 walked the talk and was rewarded with Modi 2.0 and now industry must step up to base, take guard and start playing the game. The time for excuses, waiting, complaining is over. If industry does not respond with action now, it only means that they don't have the gumption to do business in a ethical, honest, professional manner and they are tuned to being brokers, agents and traders which I don't think is true.