on Modi government’s ten point agenda
I think it is best to place at the top of the list the fact that bureaucrats should be encouraged to take decisions without fear. In a sense he has gone to the heart of the problem of paralysis. The Indian government is extraordinarily large and it is difficult to try and believe that one leader can make all the difference. It is a federal system. In a big bureaucracy you cannot practice any change of situation without cooperating with the bureaucracy.
So empowerment is important. This is a good sign. If you remember, one of the biggest concerns about Modi was an authoritarian style of functioning. By putting bureaucratic empowerment at the top of the agenda I think one has to appreciate and admit that this is definitely not the act of a dictator.
Regarding dissolution of ministerial groups.
Without making too much of an air of it, he was a case study for business schools on how to exercise leadership and make an impact from day one in a new job. He sets a clear agenda and makes a clear commitment to measure progress against that clear agenda. For example, creating an agenda for 100 days will clarify what the metrics will be to measure the success of that agenda. It is important to make incremental progress towards this agenda every day and to communicate this progress transparently. He has prepared his team, which is a focused team. For me, every decision should not be a big bang reform but a sign of proactive decision making and cutting out red tape and bureaucracy. And the promise of even faster decision-making in the future.
Among the immediate priorities of the government.
In the 1980s, I wrote a column titled “Roads to Noor.” At that time we did not build enough roads. (between) America’s competitive advantages are its highways and transportation networks. They are like blood vessels to the economy and they create job opportunities. Therefore, ironically, the best thing anyone can do to create an inclusive economy is to build roads, because access to markets or lack of access to markets is one of the most discriminatory things one can do to the poor, especially the rural poor. This is not a point that we automatically think of but roads are a mechanism of inclusiveness in the economy. So, I think, the faster he does it, the better for the economy. There is macroeconomic data that shows that roads provide a greater boost to rural incomes than even irrigation. This will help double income for families and allow a diversification away from dependence on agriculture that creates productivity.
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About India-US relations.
I have been here (in the United States) for a long time. India’s election has caught the attention of the people. Many diplomats and political pundits are now urging the leadership in Washington not to miss what they see as a diplomatic opportunity for the United States to rebuild and rebuild stronger ties with India. They feel that the US has lost ground due to the visa dispute and they must now regain ground and build strong ties.
Both Japan and China are believed to have stolen a march in establishing such relations with India. In my opinion, there will be strong efforts by decision makers to reach out to the Prime Minister and his colleagues to restore relations.
On the assumption that the new government will move further east – Japan, China, South Korea.
Considerable interest has been shown by Japan. It is a country with increased liquidity and capital surplus. Modi knows this well. Why Japanese investors are lagging behind is because they have not realized any of the promises we have made to achieve them.
In terms of construction and large industrial projects, they can take the pole position in large projects here. Having said that, it was anyone’s guess as to what the position of the Prime Minister and the Cabinet would be and the Prime Minister is his own man. My point is that our Prime Minister is a practical man and knows that any kind of revenge has no role in foreign policy.
I think his whole purpose is to promote India’s economic health and thereby achieve what should be India’s proper role in the world. The truth is that we are the largest democracy in the world and we all know that a nation’s strength and role in international affairs comes from economic strength. I think, in his own way and at the right time, he will respond positively when the right signals are sent from the US administration.
Regarding FDI in Defence
We have been consistent since we entered into JVs with foreign companies. We have not changed our position. From the beginning, it is a positive step for our government to allow at least 49% investment through automatic route. Because it encourages foreign partners to deploy technology in the JV. Otherwise, there is a caveat on their part to provide 100% support for the joint venture. So if you really want the best technology to be produced here, then (it should be) at least a 49% share, which we have always supported.
About Mahindra’s investment plans.
We have never shied away from investing. Even during the downturn, we never stopped our investment. We invested in the Chakan car factory when the economy was bad; We also invested in a tractor factory in Zaheerabad when the tractor market witnessed a downturn. When the market for tractors improves we can increase our output. We always have a long-term view of the economy. We have invested continuously. In defence, for example, if the government starts buying again for the necessary upgrades, we will definitely invest. Pawan (Goenka) has come on record as saying that we are thinking of an investment of Rs 4,000 crore, which is independent of new developments. That was what we were doing.
