Who are the beneficiaries of WEF’s commitment?
In an obviously partisan article, under a foolish and provocative title*, former management consultant Peter Vanham, based in New York, reports on the India Economic Summit in New Delhi, convened by the World Economic Forum.
In attendance: Klaus Schwab, the founder and executive chairman of the World Economic Forum, the world’s foremost multistakeholder organization, in which political, business, academic and other ‘leaders of society’ attempt to shape global, regional and industry agendas: all ‘committed to improving the state of the world through public-private cooperation’.
Modi observes protocol
Foreign investors asked if the government really had a pro-business agenda? Why did Modi himself not show up? “If he meets business people”, Anand Mahindra, chairman of Mahindra & Mahindra, said, “he does so via personal invitation, rather than in a meeting organized by someone else”.
The hard truth
Writing in the Financial Times, Vanham reports that a foreign investor, who declined to be identified, expressed impatience with the pace of reforms to make India more business-friendly.
HARDTRUTH commented: the Western analysts and funds want big bang reforms to rush in hot money, make quick profits and get out. They would not be concerned then, if the reforms faced delays and resistance. This would not be in India’s national interest.
What were the elements of the pro-business agenda?
- reforming the Land Acquisition Act,
- cutting red tape on the shop floor
- and harmonising the Goods & Services Tax.
Will they continue to ‘acquire’ the most valuable fertile land for industry?
Harvard economics professor Gita Gopinath insisted “Land acquisition is the biggest reform of them all.”
In October, Samiran Chakraborty, head of south Asia macro research at Standard Chartered Bank, reassured the nervous:
“Just a year ago, India faced a mini-run on the rupee. Now, an improving economy combined with political stability has made the country a darling of foreign investors, with more than $35bn of portfolio inflows since January”.
He summarised reforms:
“The government is focusing on improving the business environment by reducing inefficiency and cutting red tape. These so-called ‘silent’ reforms may not be headline-grabbing, but they could potentially boost India’s abysmal ranking (142nd out of 189 countries) in the World Bank’s ‘Ease of Doing Business’ survey. Silent reforms are happening in India on multiple levels and their importance should not be ignored.
“Bureaucracy has been scaled back, resulting in fewer layers of decision making. Redundant laws are being scrapped, with 283 such laws expected to be repealed in the winter session of parliament. Importantly, the lengthy process of obtaining government approvals is being reviewed, with the aim of reducing the time taken to register a business to one day from 27 days. And large-scale digitisation of government functions is planned to improve efficiency through a single e-platform connecting all ministries”.
Modi’s ‘Make in India’ campaign
“These silent reforms are the first steps in Modi’s ‘Make in India’ campaign to encourage manufacturing . . . (which) has stagnated at 16% and needs boosting to secure jobs for India’s rapidly growing young population.
“India may enjoy a huge domestic market of 1.3bn people and a large, educated labour force, but several other conditions need to be met before the share of manufacturing can be pushed up to the desired 25 to 30% of GDP”.
HARDTRUTH may well be correct: “It should be understood that the BJP government of Mr. Modi works for Indian national interest and stability of the economy”.
*Title of Vanham’s article: ”Modi and India’s reforms: a game of chicken”