Finance Minster, Arun Jaitley would soon be presenting the budget in
the Silver Jubilee year of economic reforms that began in 1991. In terms of the
impact on the destiny of this nation, 1991 remains the most epoch-making year
after 1947. If independence brought about political change, economic reforms transformed
the economic, social and cultural fabric of the country.
The metamorphosis brought about by the economic reforms, has created
infinite legendary stories. For the sake of those born in post-1991 era, here
are my favourite picks of the transformation brought about by economic reforms.
·
Cable TV Business, born in 1991, then
operated by gully gundas. In its morphed avtar it has now graduated many ladders and is
operated by the most respected industrial house of India.
·
Organised Retail, born in 1991, then
employed a handful people in a single store in Andheri. Today, its digital
cousin creates millions of jobs across the India and operates without any
store.
·
The Delhi-Mumbai telephone call, now costs just 1% of its 1991 costs
(Rs 30 per min), probably a world record for deflation in commodity prices.
·
Fax machines, were then a prerogative of
few corporate offices, now find place in every Indian’s pocket in its new avatar
called whatsapp.
·
Hinglish, in 1991, was seen promoting
only one cooperative sector brand on a few hoardings in Mumbai. It now enjoys
largest advertising space across nation and has transformed itself into the lingua franca of almost all MNC brands.
·
Engineering
population which grew by a few thousands every year in 1991, thanks to
technological progress powered by economic reforms, now sees addition of a
million every year.
·
A young actor who signed his
first Bollywood film in 1991 has now morphed himself, into a billion dollar entertainment
conglomerate. SRK has became SRK Ltd
(acting, production, animation, theme destination, sports franchise and more…),
netting annual profits more than 90% of the listed companies. Thanks to global
appreciation for Indian software skills, our engineers became NRIs and saw ShahRukh
Khan as a source for espousing their Indian emotions. Using these emotions as
the raw material and capitalizing on the business opportunities provided by the
economic reforms, SRK became SRK Ltd
And these were just a few tiny droplets on the tip of the iceberg of
the titantic transformation brought about by economic reforms. But amidst such
revolutionary mutation, if one thing remained unchanged, it was the Government’s
bureaucratic machinery. Files still move along a ladder system, decisions
remain birthright of key Civil Servants, process innovation remains low on
priority and interacting with govt still remains the most hated job.
Paradoxically, it is the economic reforms themselves that have been
responsible for this paralysis in Govt’s bureaucratic machinery. By opening up markets,
economic reforms ensured attractive career options in private sector for the graduating
classes of 1991 onwards. Bright students started preferring private sector jobs
over Govt jobs, thus reducing the quality of intake in Govt jobs. To make
matters worse, high performing senior Govt officers also started switching to
private sector for greener pastures, resulting in further depletion in the
quality of govt machinery. It is this lowered efficiency and poor bandwidth of
government machinery that is restricting the next flight of the economic
reforms.
If various industries are the spokes in the Wheel of Economy, the
government machinery is the hub. However strong the spokes may be, a weak hub
would ensure the wheel remains inefficient. Governments will come and go but if
Government machinery remains weak, Achhe
Din will keep eluding us.
Improving the efficiency of the Govt mandates an urgent need to
reverse the “brain drain” from the Govt machinery that has been the key cause
of this deterioration. The only way to achieve the same is through infusion of
expert and efficient personnel from private sector into Govt at various levels.
It may sound strange but is actually not so. When private legal professionals
can become Judges of Supreme Court and take path breaking decisions, when private
businessmen can become MPs and can take key policy decisions, then why can private
professionals not take key executive decisions as Govt Officers. When The
Judiciary & The Legislative, the others two pillars of the Govt and when even
the fourth Estate can use expert private professionals, why should The
Executive be necessarily deprived of the services of specialists and
experienced personnel ? Why should it be necessary that the government can be
served only by babus who are life time govt employees ? If an IAS officer can
become CEO of a large corporate why can the reverse not be possible? The IAS
comprises country’s top brains but it would be unfair to expect them alone to manage
today’s technology dominated world, infested with rapidly evolving aspirations
of the citizens.
Since 1991, the govt could show year-on-year growth by opening up
one sector after other, infrastructure, insurance, telcom, banking, etc. But
the big change that now has the potential to revolutionise the nation in the
next 25 years is opening up of the Govt sector. Professional management of PSUs
(Maruti Suzuki, Balco etc.) has given outstanding results. Professionalising Bharat Sarkar would result in much bigger gains, given larger inefficiencies.
Time has, therefore, come to use the energies and expertise of large
no. private personnels to power the govt machinery and take reforms to the next
stage. If the energy and emotions of few lacs of NRIs can be used by an
individual to morph himself into billion dollar entertainment conglomerate,
imagine what the energy of millions of Indians could transform this largest
democracy into. After the Silver budget, can we look forward to Ab ki baar, professionalise sarkar ?

What's yr take on the health industry in the next decade ?
ReplyDeleteTechnology (Robotics, Artificial Intelligence, Distance treatment etc.) will play a big role.
DeleteMedical Tourism will be the key growth area for countries like India.
Growth in cerebral disease will outpace other diseases.
On the negative side, litigation will also play a big role.
Well said Deepesh - 1991 was also the year which made an engineer and a pharmacist switch to professionalise themselves.
ReplyDeleteInteresting observation, Mehul.
DeleteRam Mandir, Gulf War, Biggest devaluation of rupee etc. all made 1991 even more important.
Well thought out article with a practical suggestion! State governments do reach out to gain private, professional expertise; but suffer due to lack of funds or nepotism - two big malaise in the Indian government sector.
ReplyDeleteWell thought out article with a practical suggestion! State governments do reach out to gain private, professional expertise; but suffer due to lack of funds or nepotism - two big malaise in the Indian government sector.
ReplyDeleteSanku, I think lack of funds is not an issue the right application is. And Nepotism is definitely a cause of the same
DeleteInteresting thought
ReplyDeleteVery well written, Deepesh. Indeed the government machinery has to be reformed. Revolutionary measures have to be taken by PM to show us the real Acche Din. I must say it is a good start for your blog. Lets see more of such topics in future.
ReplyDeleteThis comment has been removed by the author.
DeleteThanks Adil
DeleteSome questions:
ReplyDelete1.If Modinomics don’t take off… what is the threat of Modi going back to Hindu Nationalism?
2.Is protection of the domestic sector (retail, banking, insurance) taking away from free trade?
3.Will Modi take politically correct solutions-will this be effective enough?
1.If Modinomics don’t take off… what is the threat of Modi going back to Hindu Nationalism?
DeleteThe high decibel debate on Intolerance has ensured that any move towards Hindu Nation strategy will have to face the debate hurdle again and therefore this move is unlikely to yield dividends for BJP.
In addition, Congress has till now also been successful in blocking key economic bills which means BJP will not be in a position to show much on economic front.
Seeing erosion in Hindu votes and also in middle class votes due to the above reasons, BJP is now trying new territories, Rural population, farmers and the poorer section. The new budget is a strategic move into congress' traditional vote banks.
Therefore, I also see Modinomics redefining itself.
2.Is protection of the domestic sector (retail, banking, insurance) taking away from free trade?
Retail is already facing tough competition from e-Commerce where people have found loophole got large scale FDI. So even if the legal barriers are removed, new players are unlikely to come now in setting up large departmental store etc.
Banking : With large number of PSU, Pvt and Cooperative banks, I see the only space left of new entrants is the Very High HNI and Very Large Corporates. New entrants (even if allowed) will offer niche products which may hardly benefit aam aadmi.
Similar story with insurance.
So in may opinion, even if these sectors are opened up, consumers at large will not see significant improvement in product quality as there already is enough domestic competition.
3.Will Modi take politically correct solutions-will this be effective enough?
Politically correct solution is the key for BJP's survival. They need to ensure that congress does not reach the 150 mark ( in next Lok Sabha elections) because Modnomics will show results only after 5 years. Today my guess is congress has already reached around 80-100 and it can anytime reach 150 with another 2-3% vote swing.
The new budget is a political master stroke. Opposition is disabled since BJP is entering the territory of Left, Cong and AAP. If it works successfully, BJP will again cross 250 but if pressure from RSS is strong, I fear BJP will be forced to take a mid-path leading it nowhere (which means back to 175 seats).
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ReplyDelete