Anita Inder Singh: India must ditch anything goes attitude Make in India is to advance Indias progress. Indias international credentials and its ability to play a greater security role in Asia hinge on its economic progress. That progress, in turn, will require a change of mindset on the part of the state, its citizens and its foreign investors. Unsurprisingly, Prime Minister Narendra Modi has started by trying to change the mindset of the Indian government. In any country, the government sets the norms under which citizens live and operate. Indeed, one of Modis first instructions after becoming premier was that officials should not leave their coffee cups lying around the prime ministers office. Perhaps unwittingly, that order exposes the anything goes attitude of the Indian National Congress, the party that led the former ruling coalition. Indian Prime Minister Narendra Modi addresses business leaders as he launches his Make in India initiative on Sept. 25. © AP What can only be called sloppiness was echoed in the coalitions mishmash of policies, which ultimately slowed poverty reduction efforts to a snails pace. Progress was further hampered by government intervention. For example, the efficiency of companies and their ability to create jobs was impaired by no fewer than 44 nationwide labor laws, plus a further 100 at state level. Bad governance -- especially a lack of storage facilities and an inefficient, corruption-plagued public distribution system -- explains why tons of food lies rotting while many do not get enough to eat. Outdated infrastructure and poor communications affect rich investors as well as poor children in rural areas, many of whom lack the opportunity to attend school. The outcome is a malfunctioning economy that ranks a dismal 135th on the United Nations Human Development Index, with a literacy rate 9 percentage points below the world average of 75%. Modi earned his diplomatic spurs through a flurry of international activity and obtained foreign investment pledges of $35 billion from Japan, $20 billion from China and $41 billion from the U.S.-India Business Council. As such, he knows that Indias progress depends on his governments success in improving the nations performance in every sphere -- from infrastructure and business investment to education and food availability. Leading change In a country where passing the buck often starts at the top and filters down to lower administrative levels, no one knows who is responsible for what. Lack of accountability and mismanagement explain why not even New Delhi, the capital, gets clean drinking water around the clock (for which the local state-level government, run by the Indian National Congress until last December, is responsible). Private companies deliver electricity, but their services are also blighted by frequent breakdowns. The problem in both public and private sectors is that efficient delivery is not the norm. Modi therefore needs to foster intertwined cultural change in both accountability and delivery. The government is also trying to change the perception that business is somehow in conflict with the interests of the poor. Arun Jaitley, the finance minister, says he sees no contradiction in being pro-business and pro-poor. If business activity were stopped, there would be insufficient resources to create employment. For evidence, one need only look at the period from 1971 to 1991, before India began to liberalize its economy, when investment and growth were stymied by income taxes in excess of 90% and the strict government-permit rules of the so-called license raj. The issue of foreign direct investment divides Indians and political parties. But its opponents are silent about the jobs it could create, and about the existence of red tape that frustrates initiative and entrepreneurship. Perhaps in an attempt to change the mindset that equates investment from overseas with the exploitation of Indians by foreigners, Modi has declared that FDI now means For the Development of India. In a related gesture, the prime minister is urging foreign companies to see India as an international manufacturing hub rather than a dumping ground for shoddy goods. Ambitiously, his Make in India campaign is intended to transform India into a global manufacturer. But Indian companies looking to compete internationally must also change their attitudes, invest in the skills of their workers and offer top-quality products on their home turf. At another level, the prime ministers office has asked officials to expedite Japanese investments -- singling out, as it were, the Japanese for special investor treatment. While this will help to ensure that Japanese investment projects are completed, it also underlines the discouraging state of investment conditions overall, including for Indian investors. In practice, it is impossible to improve investment conditions for foreigners without simultaneously easing them for Indians. Clearly a new development strategy must start from the top, if Modis exhortation to foreign and Indian investors to Make in India is to advance Indias progress. Red tape, Modi says, is to be replaced by a red carpet woven out of investment incentives, including tax stability and revised labor laws. The imposition of retrospective tax on foreign investors in 2012 sullied Indias reputation as an investment destination and led companies like Vodafone of the U.K. to challenge the decision in court. In the same year, steel magnate Lakshmi Mittal became fed up with years of wrangling over land acquisition in the eastern state of Orissa and announced that he no longer has plans to invest in India. Only six years earlier, Mittal had been hailed as a national hero by the Indian media when Mittal Steel acquired the Luxembourg-based steel conglomerate Arcelor for $27 billion. Modi must hope that the carrot of nearly $100 billion worth of Japanese, Chinese and U.S. investment will help to create a new frame of mind among the states, which wield considerable power over land acquisition, building infrastructure, power and water supplies and labor laws. Cooperation between the states and the central government in implementing the administrative and legal reforms needed to encourage Indian and foreign entrepreneurs is essential. But it remains to be seen how the states will respond. Awareness and action Meanwhile, Modi has drawn attention to the need for a fresh approach to health and environmental issues by using a broom to help clean a New Delhi slum inhabited by the Valmiki caste, stigmatized by caste-conscious Hindus because its members carry buckets of excrement on their heads, or clear blockages in sewers, where they are half submerged in filth. This prime ministerial intervention on an issue as basic as public health -- which falls within the purview of state and local governments -- is the first official admission of an urgent all-India problem. India is one of the dirtiest and least livable countries in the world, subject to outbreaks of insect-borne diseases, such as dengue fever, and suffering widely from issues such as raw sewage on pavements, collapsing buildings, open manholes and rubbish that even better-off Indians throw onto the streets. Modis broom symbolizes the need for citizens to enhance their sense of civic pride. But do Indians litter the streets because they are litter louts, or because municipal authorities do not provide adequate disposal facilities? The stench from municipal waste bins is evidence that waste rots for days, weeks or even months. Both local governments and citizens need to accept responsibility for keeping their environments clean. Modi faces a Herculean challenge. He inherited heavy administrative and economic burdens from the previous government. Only through a change of mindset on the part of both government and citizens can the high hopes of development be translated into a viable political strategy. The spread of mass education must be a top priority. Governance reforms are necessary to end corruption and red tape and to provide ordinary Indians with greater chances and choices in life. Government should be perceived as a partner in progress rather than an obstructive and high-handed controller. For their part, citizens must discard the anything goes way of thinking. Changes such as these could lead to a more prosperous India, its poverty eliminated through democratic consensus, which could be a positive force for peace and stability in Asia and the wider world. Anita Inder Singh is a visiting professor at the Center for Peace and Conflict Resolution in New Delhi. javascript: void(0); Photo Credit:asia.nikkei/Viewpoints/Perspectives/Anita-Inder-Singh-India-must-ditch-anything-goes-attitude
Posted on: Tue, 11 Nov 2014 03:19:27 +0000
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