India’s economy is struggling ever since Modi government came to power and started introducing its disastrous policies one after the other that deteriorated the condition of Indian business even further. The increasing taxation and government regulations are making it even harder for businessmen to grow and contribute freely to the economy.
The solutions to India’s economic crisis are unlikely to be straightforward or speedy. When the IMF and others raised concerns in October, they weren’t just reacting to the slowdown. They were questioning the quality of growth, which included very little private sector investment and was flattered by cheap oil imports; and they were also calling for long-term structural reforms to make the country more efficient and less dependent on the state.
The current labour and land acquisition laws are archaic and need addressing urgently to rebuild business confidence. For instance, manufacturing firms that employ more than 100 employees have to obtain official approval before making staff redundant, which makes it difficult for firms to improve productivity and adapt to innovation.
The government also needs to go further in improving the banking sector, including stricter regulations over lending and enhanced supervision from regulators. Until such matters are addressed, it is difficult to see India living up to its vast potential.
India is fraught with micromanagement and suspicion, and upping the growth trajectory requires removing the obstacles that impede businesses, Tata Sons chairman N Chandrasekaran said on Thursday.
Growth cannot come by merely pushing people to move fast and requires a transformative vision and a change in the culture, the head of the USD 110-billion conglomerate said, delivering the Nani Palkhivala Memorial Lecture here.
The comments come amid a slide in growth to a decadal low of 5 per cent expected for current fiscal, and also years after the Narendra Modi government made ease of doing business as its priority, along with a commitment to less of government.