India Continues To March Ahead
The bold Rs 76,000 crore PLI package released by the government around December 2021 seems to have kickstarted the process of production of semi-conductor chips in the country. The14 September announcement of the Vedanta-Foxconn joint venture (JV) plans to invest Rs 1.54 lakh crore on a display fab unit and a semiconductor fab unit in Gujarat is heartening. It is a vindication of the government’s faith in the corporate sector to get into this very challenging, very tough, very high investment, long haul project – so crucial for the country’s economic growth. Production of chips in the country will have immense benefits to almost all manufacturing sectors. Here’s hoping that a couple of other biggies also jump in soon. An Israeli company is already talking to the Tatas and others for production of older technology > 45 nm nodes that account for 50 per cent of the market, production of which can start in just two years!
Independent India started its economic journey when India’s first Finance Minister presented the first budget on 26 November 1947. We have come a long way since then and as I scan through all the positive news in the national dailies, I am convinced that we are indeed on the right track. The fundamentals of our economy are strong and we are making great progress on the economic front despite all the turmoil in the world. Let me illustrate.
*India’s Global Market Cap Share at All-time-High
First, we got the news of ‘India becoming the world’s fifth-largest economy overtaking Britain; this was followed by India’s global market cap share also rising to the fifth rank after only the United States, China, Japan and Hong Kong and ahead of the UK as well as major European economies. From a 2.05 per cent share in May 2020, we have now risen to a whopping 3.5 per cent of the ‘total world market cap’. In absolute terms, we are at $3.4 trillion out of the global figure of about $98 trillion – way lower than US’s $42.5 trillion and China’s $10.5 trillion, but inching up to Japan’s $5.1 trillion and Hong Kong’s $5 trillion. The ‘rupee blues’ were also somewhat ameliorated when a study revealed that our currency had outperformed most of our emerging market rivals – and even some developed market peers – against the dollar.
*Launch of 5G Services
It is a matter of pride for all Indians that we are maintaining our pole position in mobile services and, following a formal launch by the PM calling it ‘Dawn of a New Era’, our largest companies – Airtel & Jio – are all set to spread out with the assurance that the rates will be ‘most affordable in the world’. It is bound to not only empower our businesses with much faster communication but should also help in multiple areas like agriculture, health, education, disaster management etc. As it is, the country has taken giant strides on the path of a ‘digital revolution’, way ahead of many advanced countries. Our 700 million internet users, 350 million ecommerce buyers, UPI, lakhs of common service centres – spread across major metros, small cities and villages – has made us a virtual world leader in the domain. All this is driving our progress towards atmanirbharta.
*Endorsements by the Global Biggies
The global community seems to be vying with one another to ‘endorse’ the strength of our economy. First it was the McKinsey CEO who hailed India’s growth potential and stated that ‘it (the 2020s) wasn’t just ‘India’s decade’ but it was likely to be ‘India’s Century’– what a great honour to be billed as such by the world’s largest and most respected consultancy firm. He was followed by the giant Unilever’s global chief calling India a “Powerhouse”. Yet another flattering comment came from the group CEO of the 175-year-old insurance and asset management firm Prudential, praising our country’s decision to raise the FDI limits that could open up new opportunities for international players to increase their stake in India.
Later to join the bandwagon was chairman of Stanch Chart, perhaps the oldest bank in the world. His words, “Confident about India’s Quality of Economic Policy Management”, are great. He went on to add “Post Covid, it is hard to find a country of this size growing or expected to grow at around 7%”. Then came equally nice comments from the CEO of JP Morgan that “India has built enviable digital infrastructure”, S&P chief economist and Nestle CEO; and the latest – Deutsche Bank CEO’s front page report on 3 October, “India is a Shining Star amid global economic uncertainty” is truly heartening. As if that wasn’t enough, Ruchir Sharma – the highly respected US-based commentator – includes India in his list of ‘7 wonders of the world economy’. Surely all these big guys are not just ‘Modi Bhakts’. They have made these statements based on in-depth research by their organisations.
India assuming ‘presidency of the influential G20 group’, from 1 December 2022, is yet another major endorsement by the world – of our country having joined the high table of business and industry. Add to it the presidency of SCO (Shanghai Cooperation Organisation) and hosting the next summit in 2023 – another great recognition by the world community.
*GST Collections Continue Their Northward March
With Rs 1.48 lakh crore in September 2022, this structural reform seems to have found greater acceptability and, with the upswing in the manufacturing activity, should keep rising. Not only does it help fatten the government kitty, it keeps bringing in many businesses in the ‘formal sector’.
*Surge in Vehicle Sales
The auto industry – a strong indicator of the economic health of the country due to its linkages with other industries and its huge employment potential – continues its non-stop surge. September despatches of nearly three lakh passenger vehicles is a huge endorsement of our economic progress. The imminent proposed visit of the big bosses of virtually all international auto manufacturers to check out opportunities for EVs (electric vehicles) portends well for the sector. India could possibly become a global hub for these ‘cars of the future’.
*Domestic Production of Mobile Phones
This is another area that has caught the imagination of our industrialists. With the likes of Apple being equally interested in diversifying their production facilities, there has been a significant increase in local production and export of this vital communication tool. India is already amongst the top countries on the index of ‘mobile phones per person’ and continues to move further. Decent concentration of smartphones in villages is rendering a huge help to farmers and panchayats for market information about the best prices for their produce and early warnings about weather changes.
*Infrastructure Building On Fast Track
Everyday there are reports about new highways, freight corridors, rapid rail transport, metro rail expansion, development of ports and new ones being added … we seem to be working on a mission mode on making up for our earlier laxity in this crucial area that not only facilitates better and less expensive logistics costs but also generates huge employment opportunities. Clearance of the Rs 75,000 crore project for development of an international port and container depot at Nicobar should add hugely to the efficacy of our sea trade routes as well as maritime strength.
*Ongoing Push On Green Energy
India is already ahead of the world in switching from fossils to renewable sources and fulfilling its commitments towards Net Zero emissions. It is heartening to see big conglomerates getting into the field for almost all sub sectors – solar and wind energy generation, making solar cells and storage batteries, power transmission, EV charging stations … the entire value chain. We seem to be well on our way to achieve the 500 GW production of green energy by 2030. Perhaps no other country in the world is even close to this ambitious goal.
*Defence Production un Private Sector
Here’s yet another positive initiative that reinforces the concept of public-private partnership and accelerates self-reliance or Atmanirbharta. Now that the Union Ministry of Defence has given a go ahead for ‘emergency purchases without imports’ empowering the armed forces for quick contracting of weapon systems, local defence equipment companies are in a hurry to support the nation’s efforts at improving preparedness. Many of them are ready with high-technology innovations for various types of missiles, unmanned aerial vehicles, swarm drone systems etc.
*Rajasthan OBC Girl Tops NEET
Every right thinking Indian would have felt elated to read this news about an OBC girl from Rajasthan topping the National Eligibility cum Entrance Test (NEET) for admission to undergraduate medical courses. No nation or society can grow and prosper without including welfare of the underprivileged. ‘Inclusivity’ is one of the most important issues before the country and this girl’s achievement is a giant step towards it. Add to it the big jump in our success in the sports arena – Olympics, Paralympics, Commonwealth Games et al as well as the New Education Policy and we do see a semblance of holistic growth in the social sector.
*Employment Opportunities
There seems to be a ‘hiring boom’. The latest reports suggest that FY23 will create nine million new blue-collar jobs against eight million created in FY22 – mostly in ‘logistics & mobility’, e-commerce, facility management, IT, retail, quick-service-restaurants and manufacturing. A significant increase in the ‘investment and turnover ceilings’ for qualifying as a ‘small industry’ should also give a big boost to efficiency of our backbone SMEs sector and further help the jobs scenario.
*Travel Hungry Indians
The pick-up in this sector – after a hiatus of about two years due to Covid – is nothing short of spectacular. People are travelling like never before – sort of a revenge travel – and there is mushrooming of home stays, budget hotels as well as luxury resorts giving a big boost to tourism and even foreign exchange earnings from reciprocal inflow. Very recently, the ITC hotels chief went on record to say that his company is ready to launch over 20 new properties in the country and in the Middle East. Announcement of the new airline Akasa to jack up salaries of pilots by as much as 70 per cent and Air India’s plans to acquire 30 more aircraft bear testimony to the fact that travellers and airlines are on the same page. Tourism, as we all understand, has huge employment potential.
*Realty Rebounds
This is yet another sector where investors are taking a lot of interest once again and one can see robust home sales – yet another area generating a lot of jobs and inclusive growth.
*And, There Are Challenges
Examples cited above do not mean that everything is hunky-dory and we will soon become a Super Power. There are several challenges like:
(a) inadequate primary education system
(b) public healthcare – notwithstanding an admirable show during Covid – that still needs a permanent upgrade
(c) not enough attention to tackling effects of climate change
(d) inflation, falling exports and the southward bound rupee plus high crude prices
(e) the ongoing Russia-Ukraine war
(f) Chinese menace at the borders despite some disengagement
(g) lack of inclusivity and communal strife (h) pendency in the courts etc.
I am sure there are many more, as indeed there are bound to be in a country of our size, trying to develop at a scorching pace. The good thing is that the governments – Central and some states – are aware of all the roadblocks to progress and are making serious endeavours to remove the same but, perhaps, they need to accelerate and synchronise their efforts.
The author is President NAAI and Member National Advisory Board SARTHAK
