In the 2011 critically acclaimed Hindi flick ‘The Dirty Picture’, the character played by Vidya Balan tells her director what the success mantra to a film is. “Filmein sirf teen cheezon ke wajah se chalti hai ... entertainment, entertainment, entertainment” (Films do well only because of three reasons ... entertainment, entertainment, entertainment.”)
On Monday, while speaking to the Sydney Morning Herald, world-renowned economist and Reserve Bank of India (RBI) governor Raghuram Rajan seemed to take a leaf from the blockbuster movie dialogue, when he offered the economic growth mantra to Prime Minister Narendra Modi on how to change the course of India’s economy.
“Implementation, Implementation and Implementation,” Rajan said when the journalist from the Herald asked him to nominate three things that India most needed to make a difference to the India economy. “The gap in India has always been between the promise and the execution," Rajan said.
Though Rajan didn’t go into any specifics, his comments assume significance in the context of the Modi government aggressively pushing the manufacturing sector growth and change the country to a global manufacturing hub in the economy launching several initiatives, such as ‘Make in India’ and the recently launched ‘Start-Up India’. A section of the industry has been raising questions about the implementation part of the schemes announced in the past.
Rajan took the example of slow paced progress of infrastructure projects. “We have enormous infrastructure projects planned. Some of them are in the process of being rolled out. We need to keep at it,” Rajan said. “We need to do it faster. We need to get these new roads, these new airports, these new railway lines built ... we know what we have to do. We just have to do it".
Rajan has always been in headlines though not always for reasons pertaining to economics or banking though. Often, his comments on issues ranging from government policies, politics to even social problems (how a weak state dares to hit only on the weak and small, not the rich and powerful have drawn instant media attention).
The former chief economic advisor to the Indian government, who is the governor of the RBI since September 2013, has never hesitated to offer his views on issues including the government’s ambitious Make in India plan, the rocket-speed implementation pace of Jan Dhan Yojna or even on the intolerance episode that rocked Parliament in Winter Session when he said “excessive political correctness (that) can stifles progress”.
If one goes by the data from Centre for Monitoring Indian Economy (CMIE), there is indeed a serious case to expedite the pace of project implementation in the economy. The economy has had serious roadblocks on the implementation-front when it comes to infrastructure projects.
The number of stalled projects has been on the rise in the last two years. When the total value of stuck projects stood at Rs 8.3 lakh crore in the second quarter of 2013-14, the chunk grew to Rs 10.5 lakh crore during the corresponding period in 2015-16.
Most experts agree that unless the infrastructure woes are solved, it is difficult to attract large foreign investments into local businesses.
Not just that. Rajan’s implementation mantra is key even for the success of the government’s flagship schemes such as the Startup plan announced Saturday, implementation is key to ensure its success.
One example is the not-so-known fate of the Rs10,000 crore start up fund announced by finance minister, Arun Jaitley in the interim budget of 2014. Industry didn’t have much clues on what happened to this fund later.
“How much has the government disbursed under the fund, so far? Who have benefitted from it? We have no clue about the fund,” Chandrakant Salunkhe, founder and president, Small and Medium Business Development Chamber of India, had told Firstpost.
The short point is this: As the empirical evidence from the past shows, India has no dearth of promises but what is lacking is the implementation part, especially when it comes to infrastructure projects. Rajan has hit the nail on the head when he pinpointed the problem that is blocking big wave of growth in the economy.
Modi would do well listening to Rajan.