Taking a sharp turn - Indian Economy

India was already going through an economic crisis in 2019 and COVID has just added fuel to the fire. If we let go of the current opportunity, it can lead to economic stagnation. Finance Minister's mission of  US $5trillion economy by 2025 seems distant. Due to some mishappenings and extreme policies of China, we have an opportunity to enhance our rank outperforming emerging economies.

To fulfil the necessary requirements, the Indian GDP needs to grow by 8-8.5% over the next decade. We need to move towards high productivity sectors which have the potential to create more jobs. We need business models which can drive productivity and demand by harnessing global trends and Information Technology. Manufacturing and construction is one such sector which can contribute significantly to accelerating growth. With the development of the infrastructure pipeline, the manufacturing sector will have enough back support to drive labour-intensive as well as knowledge-intensive value chains.

Global trends such as digitization and automation, shifting supply chains, urbanization, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating or assuming a new significance in the wake of the pandemic. We need to prioritise critical supply chains and make them more resilient. A shift away from China and increasing focus on health and safety has opened up many opportunities for India to produce and sell manufactured goods and services. We need to develop IT infrastructure to provide the latest emerging technologies like Artificial Intelligence, Machine/Deep learning to the whole world and become a pioneer in this sector.

Automation and Industry 4.0 are helping firms become more efficient. At the same time, it is driving some workers away from their tradition work, we need to train and redeploy the workers who are displaced and have lost their jobs. The global pandemic has lead to an exponential increase in the number of NPAs, there is a need for recovery models which will make the insolvency process more streamlined and effective.

We have witnessed a shift in the structure of office operations towards work from home culture. Many companies have released their statements that they'll achieve complete work from home operations within 5 years and only a few employees will work from the office. We need to tap into the shifting preferences of Indians aspiring to a higher standard of living, a cleaner environment and more convenience-based services. We need to open our economy for foreign players, recently we have seen India has eased the FDI norms in the education sector we need more such reforms in other sectors as well. Digitally enabled supply chains and an increase in the share of e-commerce will increase efficiency and productivity.

Large-scale privatization could more than double the productivity of various industries which are underperforming. Privatization would also need to be accompanied by an appropriate institutional framework and effective competition. We need to further improve our ease of doing business and also the cost of doing business. The change needs to follow a bottom-up approach from local to the national level. In line with the PM's ambitious mission of Atmanirbhar Bharat Abhiyan, we also need to set up “e-governance for business” mission at the state-government level could improve the ease of doing business at the local level.

The development will start with the formulation of clear and sharp vision and strategies by the central government. The state government will be playing a critical role in the implementation of all the policies and easing the business process for private players. Finally, business leaders would need to raise aspirations and commit to productivity growth through a set of frontier business ideas.