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'You cannot have development without growth.'

'You cannot have development without growth.'

Much has changed in the last 20 years. Aspirations have climbed so high that even a growth forecast of 7.5 per cent of GDP this year - down from the earlier projected nine per cent - puts the business community in a sulk.

It gives me no joy to see on the 20th anniversary of Business Today the economy enveloped in a mood of pessimism and despondency. India is a country full of irony. It's ironical that although we unshackled ourselves from the infamous Hindu rate of growth of 3.5 per cent 20 years ago and the economy is slated to grow at 7.5 per cent this fiscal year, there hangs a pall of gloom over entrepreneurs who as a breed have been the mainstay of India's growth story.

The reason is plain and simple: bad governance. The government is unable to control inflation, the fiscal deficit is almost sure to overshoot its target, borrowing rates are crippling for business, and the reform process is in a coma. The consequence has been that the stock market has shed one-third value since January 1; the value of the rupee to the dollar has never been so low; industrial production in October contracted 5.1 per cent, for the first time in more than two years; foreign institutional investors are net sellers of about $215 million of India's shares this year, compared to $29 billion purchases in 2010; and credit assessing agencies are looking warily at India.

The tragic irony is that this dismal scenario is being presided over by the messiah of Indian reforms 20 years ago, Prime Minister Manmohan Singh. I had written in the Letter from the Editor in the inaugural issue of this magazine in January 1992: "These are exciting times for business… politicians and bureaucrats are trying to speak the language of business. Industrialists, who were once happy enough tending their little market patches at home, are suddenly waking up to the prospect of competition".

Undoubtedly, much has changed in the last 20 years. Most important is that no one is willing to accept the old Hindu rate of growth. Aspirations have climbed so high that even a growth forecast of 7.5 per cent of GDP this year - down from the earlier projected nine per cent - puts the business community in a sulk. Nevertheless, in these 20 years, India's per capita income has expanded the fastest since Independence and India today is neck and neck with Japan as the world's third-ranked economy by purchasing power.

This, I believe, has come about because of a million mini-revolutions in India. Not all of them happened at the same time but they kept the economy rolling. First was the information technology revolution set off in the 1990s, which made India the electronic housekeeper of the world. This happened largely unnoticed because there was no government interference and it required little local infrastructure.

The rise of the great Indian middle class had started. Changes in regulations and relaxation of foreign direct investment, or FDI, rules boosted many sectors. Car sales grew over 10 times to reach the twomillion mark and two-wheelers will top 10 million unit sales before this year turns, just short of a 10-fold growth. Simultaneously, the telecom sector transformed our lives with over 900 million mobile phone connections - the second-largest in the world. There are many other sectors that fuelled growth like airlines, satellite television, financial services, and real estate, to mention a few.

But the trouble is that in the last five-and-odd years no new stimulus has been released. Change in FDI rules for insurance and retail, pension reform, are all embroiled in our political miasma. All these would have propelled the economy to the eight to nine per cent growth rate which is the minimum it deserves.

The beauty in India is that incremental changes result in huge pay-offs. After all, the initial Manmohan Singh reforms, although audacious at that time, were actually cosmetic. They removed unnecessary controls on the Indian economy and unleashed the creative energy of the Indian people. Fundamental reforms like change of industrial labour laws, downsizing the stifling bureaucracy, selling bleeding public sector units, agricultural reforms and superfluous subsidies remain untackled to this day.

It is amazing that our politicians are bent on killing the goose that lays all the populist golden eggs they are so fond of. You cannot have development without growth. Manmohan Singh has to reincarnate himself into his 1991 avatar and use the second chance destiny has given him to implement the second wave of reforms. Otherwise his legacy will be halfbaked. He will be remembered as the man who launched the Indian economy but never put it in orbit.

Living its "for managing tomorrow" motto, Business Today specialises in spotting trends that have a bearing on tomorrow. In keeping with this tradition, in the 20th anniversary issue that you are holding, we have taken lenses to the future, the present, and the past of Indian business. We roped in nearly two dozen thought leaders to write columns about the future of their respective specialisations - from social media to philanthropy, from politics to India's global standing, from health care to banking...

The last two decades have changed headline numbers dramatically in India, but often the stories of how these years changed the lives of common Indians have not been told. A determined set of BT reporters tracked down six such untold stories of transformation from Ludhiana to Nagercoil, from Khammam to Mumbai. You don't publish a magazine for 20 years without stunning pictures. At Business Today, high quality design and images are intertwined in our DNA, and we decided to dip into our archives to bring you some of our best pictures. Keeping our "look into the future" glasses on, we also decided to shoot 20 young Indians who are leading change in their chosen lines of work.

I hope you enjoy this issue. It is special even by 20th anniversary special issue standards, even if I say so.

Happy New Year.

Published on: Dec 20, 2011, 10:24 AM IST
Posted by: Navneeta N, Dec 20, 2011, 10:24 AM IST