A nation whose time has come?
ECONOMY & POLICY

A nation whose time has come?

As our nation completed 75 years of Independence, it won back some of its pride as it secured a place as the fifth largest economy in the world as it edged past the United Kingdom. It is time to reflect on how lives have changed during these years and when they have begun to miraculously transform writes PRATAP PADODE.

Our nation survived the onslaught of religious disruption and settled into accepting destiny as it unfolded as the gift of freedom outweighed the pangs of lack of opportunity.

The socialist mode of government did not prove to be a sustainable economic model as we drifted to a crawl in terms of growth. Decades of corruption, unemployment, lack of governance and accountability brought us to despair as we approached the World Bank for loan after loan. Only in 1991 did the Narsimha Rao and Manmohan Singh duo launch reforms after the IMF had bailed us out. These reforms proved to be the turning point as the country was released from decades of economic shackles. After 1991, India did not approach the IMF for any loan at all. There was no looking back – yet, there were obstacles as welfare trickled to the needy and corruption continued unabated. As our economy grew, we had not formulated our strategy with a long-term vision.

As our ability to deliver wage arbitrage got noticed, our software industry took off. Our population was 1 billion in 2000 and touched 138 billion in 2020. The population rise in urban India was an incredible 70 per cent! The decade to 2010 was one of irrational exuberance when even the worst-off African economies did fairly well and the UPA government took the GDP growth as a vote of confidence in its ability to handle economic affairs until policy paralysis shadowed growth numbers from 2012.

The regime change brought great focus on infrastructure and welfare service deliveries. Right from a spend of Rs 5 trillion in the later years of the 2010-decade, infrastructure spending rose to over Rs 10 trillion by 2018. Going forward, the national infrastructure agenda revived many schemes like Aadhar, Bharatnet and the North South East West Corridor, while new schemes like Bharatmala, Sagarmala, the Smart Cities Mission, AMRUT, the National Infrastructure Pipeline (NIP) and now PM Gati Shakti have been accelerating the initiatives.

Our fiscal deficit has escalated, giving limited room for spending required for these initiatives. The country's fiscal deficit is projected at 6.4 per cent of GDP or Rs 16.6 trillion for this fiscal ending March 2023 as against 6.71 per cent for the previous year.

However, analysts are also predicting a rosier year ahead with an uptick in the private investment cycle. India is likely to be the fastest-growing Asian economy in the region in 2022-23, according to analysts at Morgan Stanley, who expect India’s GDP growth to average 7 per cent during this period – the strongest among the largest economies – and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. In this column, I too have predicted a tsunami in construction post-monsoon.

The construction sector between April 2020 and March 2022 drew in an FDI of $ 26.2 billion in townships, housing, and other development projects while construction in infrastructure activities attracted $ 27.92 billion during the same period. Total FDI in FY 2022 was $ 83.6 billion, up from $ 82 billion in FY 2021, while in 2000 we attracted $ 3.58 billion. Despite higher deficits, FDI could help accelerate infrastructure spending this year. Policies conducive to infrastructure investments are paving the way for FDI. Is it too early to quote Victor Hugo when he said, “No force on earth can stop an idea whose time has come?”

(The author is founder and President of FIRST Construction Council, an infrastructure think-tank )

Source: NDTV

As our nation completed 75 years of Independence, it won back some of its pride as it secured a place as the fifth largest economy in the world as it edged past the United Kingdom. It is time to reflect on how lives have changed during these years and when they have begun to miraculously transform writes PRATAP PADODE. Our nation survived the onslaught of religious disruption and settled into accepting destiny as it unfolded as the gift of freedom outweighed the pangs of lack of opportunity. The socialist mode of government did not prove to be a sustainable economic model as we drifted to a crawl in terms of growth. Decades of corruption, unemployment, lack of governance and accountability brought us to despair as we approached the World Bank for loan after loan. Only in 1991 did the Narsimha Rao and Manmohan Singh duo launch reforms after the IMF had bailed us out. These reforms proved to be the turning point as the country was released from decades of economic shackles. After 1991, India did not approach the IMF for any loan at all. There was no looking back – yet, there were obstacles as welfare trickled to the needy and corruption continued unabated. As our economy grew, we had not formulated our strategy with a long-term vision. As our ability to deliver wage arbitrage got noticed, our software industry took off. Our population was 1 billion in 2000 and touched 138 billion in 2020. The population rise in urban India was an incredible 70 per cent! The decade to 2010 was one of irrational exuberance when even the worst-off African economies did fairly well and the UPA government took the GDP growth as a vote of confidence in its ability to handle economic affairs until policy paralysis shadowed growth numbers from 2012. The regime change brought great focus on infrastructure and welfare service deliveries. Right from a spend of Rs 5 trillion in the later years of the 2010-decade, infrastructure spending rose to over Rs 10 trillion by 2018. Going forward, the national infrastructure agenda revived many schemes like Aadhar, Bharatnet and the North South East West Corridor, while new schemes like Bharatmala, Sagarmala, the Smart Cities Mission, AMRUT, the National Infrastructure Pipeline (NIP) and now PM Gati Shakti have been accelerating the initiatives. Our fiscal deficit has escalated, giving limited room for spending required for these initiatives. The country's fiscal deficit is projected at 6.4 per cent of GDP or Rs 16.6 trillion for this fiscal ending March 2023 as against 6.71 per cent for the previous year. However, analysts are also predicting a rosier year ahead with an uptick in the private investment cycle. India is likely to be the fastest-growing Asian economy in the region in 2022-23, according to analysts at Morgan Stanley, who expect India’s GDP growth to average 7 per cent during this period – the strongest among the largest economies – and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. In this column, I too have predicted a tsunami in construction post-monsoon. The construction sector between April 2020 and March 2022 drew in an FDI of $ 26.2 billion in townships, housing, and other development projects while construction in infrastructure activities attracted $ 27.92 billion during the same period. Total FDI in FY 2022 was $ 83.6 billion, up from $ 82 billion in FY 2021, while in 2000 we attracted $ 3.58 billion. Despite higher deficits, FDI could help accelerate infrastructure spending this year. Policies conducive to infrastructure investments are paving the way for FDI. Is it too early to quote Victor Hugo when he said, “No force on earth can stop an idea whose time has come?” (The author is founder and President of FIRST Construction Council, an infrastructure think-tank ) Source: NDTV

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