How does one rate the performance of the government? I was amazed rather amused to see some TV news channels asking some print media editors to rate the government and the prime minister for its performance of last four years in power on a scale of 10. The scores ranged from 3 to 6. I am of a little different opinion about the rating, particularly one for the prime minister. If we go by the projects and schemes for the benefits of the people, perhaps I find Bharat Nirman as one of the best one. However, NREGS is also equally revolutionary. The prime minister also appeared pushing Nuclear Deal to the ultimate end, but then meshed.
Unfortunately, the prime minister couldn’t set up machinery to make his administration accountable for implementation. On ground level, all the critical projects including the NHAI road network are hardly meeting the time schedule, though there are exceptions such as Delhi Metro and ISRO.
Again, the prime minister has failed to create a consensus on some national issues such as land acquisitions for the industrial projects. For instance, South Korean steel company Posco has not been able to start construction of its $12 billion steel plants in last four years. So is the case with many projects that could have changed the economy of many regions.
The prime minister has also failed to tone up administration to bring corruption down or to improve the competitiveness or human development indices of the country. While many of the reports may be shocking and depressing, there are quite a few, may be by default that keep the hope alive. IITians are returning back or getting into entrepreneurships. Many companies have come out with world-class innovations in products and processes. The developed world is taking note of India. Here are some of those:
Foreign Direct Investment into India has surged to over $ 25 billion in 2007-08 and the country’s Foreign Exchange Reserve crossed $ 341 billion.
Corporate India is doing fine. According to research firm Grant Thornton, corporate India spent over $40 billion on global M&As alone in the last two years. Tata itself has spent a total of $18.75 billion on 21 acquisitions including Tata Steel’s Corus for $12.1 billion, and Tata Motors’ $2.3 billion spend for Jaguar and Land Rover. It has enhanced the image of India. The Aditya Birla Group’s Hindalco paid $6 billion for Atlanta-based aluminium sheet maker Novelis in February, 2007, while Essar Steel forked out $3 billion for Canadian steel maker Algoma Steel, Minnesota Steel, and U.S.-based Esmark in one year. Indian information technology companies have been buying smaller IT service outfits in Europe, Latin America, and Asia to gain global customers and reduce the reliance on U.S. market. And companies in almost all sectors, be it a small e-Education company or Indage wine brewer, are trying to get into global market through acquisition. Giants in telecom and pharma, among others, are sinking big money into the promising market of Africa in a catch up endeavour.
Many MNCs are coming to India with big projects. India is no more considered untouchable for manufacturing enterprises. The world’s largest truck maker Daimler in partnership with Munjal’s of Hero group has now chosen to locate their commercial vehicle manufacturing unit in Oragadam, near Chennai with an investment of more than Rs 4,400 crore over a five-year period for a greenfield plant to produce a new brand of low cost vehicles for the Indian market, besides acting as a base for exports. Now there is almost unanimous agreement that India has potential to become global manufacturing hub.
General Electric Company is planning to manufacture windmills and gas turbines in India.
Indian companies are able to face global competition. Even SMEs are successfully changing their strategy to meet the competition. For instance, two years ago, Patel Brassworks, which earns 65 per cent of its revenues from exports, had the foresight to switch the currency in which it trades from the dollar to the euro. Since then, the dollar has depreciated against the rupee from 48 to around 40 while the euro has appreciated from Rs 52 to Rs 63. The company could have been sulking because of a 17 per cent lower realization had he stayed with the dollar, is now enjoying a 21 per cent higher realization.
India Inc is investing heavily. The new proposals that stood at Rs5,58, 333 crore, an impressive 90% increase over last year reflect the corporate sector’s efforts to expand manufacturing capacity. Electricity generation attracted maximum Rs2,05,088 crore worth of new investment proposals, which shows a robust 105% increase over Rs99,590 crore a year ago.
Many domestic and MNCs are rushing to invest in power sector that has been holding India’s growth. Surprisingly, the new investors are acquiring coalmines abroad from Africa to Indonesia to Australia to give up its dependence on domestic PSUs to get coal. Tremendous growth in real estate sector is visible all over the country. New private airports such Hyderabad and Bangalore have started getting commissioned.
And all these activities mean more for the people involved. According to a latest report, the explosive rate of growth in India has created a phenomenal demand for talent so much that wages are forecast to rise by 14.4 per cent during the year 2008 that is much more than other developing countries.The companies are adding to the headcount aggressively. Infosys is set to cross the one-lakh-employee mark, catching up with Tata Consultancy Services. The twosome together would be within kissing distance of worldwide headcounts at IBM or Accenture, the two global leaders. An interesting question is being asked, who is more American IBM or TCS.
Why should we get morose when the government is failing to score high ranks or the prime minister don’t meet the expectations of the people? Let the Indian entrepreneurs take the country take ahead.