Redefining the reform agenda – 10 point some one

(Sum's take on Indian Reforms scenario)

On the eve on Independence Day in 2008 lets conduct a post mortem of the status of Indian Reforms and develop a 10-point agenda for reforms in different sectors of India Inc. Its not about “What”, its about “How”? Here are 10 reform issues which are pending and which could raise growth as well as make it more inclusive and comprehensive.

1. Disinvestments
Never heard about the Disinvestments ministry in Manmohan’s Tenure. With the departure of comrades Disinvestments seems to be the buzz word and lowering government stake below 50 % will help PSU’s operate more freely and will help government coffers in the medium and long terms. I strongly feel that in a modern economy, government should keep itself to governing and concentrate on social and economic infrastructure; it should abstain from running businesses. Government has lined up a number of companies for Disinvestments, but sluggish stock markets and resistance from employee unions may delay / derail the process. It’s time for PC/MS combine to add steam to the process.

2. Urban Development

Some one just mentioned that our congested and crowded cities are first developed and then a master plan prepared to redesign, redevelop and reconstruct. Sluggish and unplanned urban development is the biggest dampener in slow infrastructure development and a big constraint on GDP growth. Villages are flocking to cities and cities are crumbling under pressure on resources. A major thrust on sound urban planning and development through a comprehensive policy with a sound delivery mechanism could add 1 % to GDP.

3. Highways

Highways are the face of any country and the arteries of growth for the economy. They have a transformational role both for development and growth. While China can think, plan and execute a road to Everest base in months, the case o building a simple road or flyover in India can rake years. The development of highways is moving at a slow speed; far slower than the country can afford. Problem here is not lack of resources, but lack of a comprehensive long term planning and I.M.P.L.E.M.E.N.T.A.T.I.O.N. Land acquisition reforms and push for faster highway construction does well for India.

4. Power
The biggest and best example of reforms in power sector is the Power Generation and Distribution Boards in West Bengal. Without giving any chance to the politically and reform sensitive people of Bengal, it has transformed itself into a profitable enterprise, simply by plugging holes in service delivery mechanism. My peers in Punjab are reeling with power cuts of more than 8-10 hours a day. Ironically, each successive government in Punjab is doing vote bank politics by giving free power to farmers. What about common man, who is made to pay for this? Besides power sector reforms back by a sound policy and unbundling of state electricity boards, I advocate the concept of “Pre Paid Power” where a consumer can buy certain units of assured electricity for a amount paid in advance. The power boards kitty will swell with cash from advances from rich and famous, this buffer can they be used to pay the dues and explore alternate sources of energy.

Another important aspect to highlight here is the use of diesel and other products by consumers for generating electricity through their gensets. The diesel, petrol, kerosene and LPG which government is already subsidizing, is being increasingly used for power generation in areas with heavy load shedding and power cuts. Another case of oil subsidies being misutilized ?

India with its unique location and see on three sides can actively explore setting up coastal wind energy parks (like the ones set up by Holland) and generating power from tidal waves. Wind energy potential is so huge that it, if effectively explored and utilized it can provide power to the entire peninsular region of India. Nuclear power will relieve India of its power woes in the long run.

5. Water

Clean, pure and safe drinking water is only found branded and bottled in India. The quality of drinking water ranks lower than many underdeveloped countries. Water conservation methods like rainwater harvesting, re treating the water and other water management methods are essential and critical to quality of life.

India is a land with a lot of river, and at any given time we can have flood and draught in different regions at the same time in India. Interlinking on rivers (though a costly proposition costing around Rs.100, 000 Crores) is a measure, which should be thoughtfully considered to solve the problem of water and it, can also contribute to generation of hydroelectric power.

A big slap on our face remains the high levels of pollution in our sacred and religiously important rivers (forget ecological importance) – Ganga, Yamuna and Narmada. Anyone listening?

6. Sanitation

It’s a major issue in urban, semi urban and rural India. It is imperative to build basic sanitation infrastructure (clean construction and maintenance arrangements) across India through PPP model.

Manual scavenging of human fasces is one the dirtiest job still prevalent in rural and semi urban India and must be done away with. (Already written a blog about this)

7. Housing

Housing is a national priority, but we are talking of economic housing in the millions of provide shelter, enhance quality of life and to provide security and stability and not of lavish up market accommodation running in Crores. To reduce disparity we need to develop housing projects, which discount the high land prices and provide accommodation to the weak and lower middle class of the society. This is as important as providing rural employment guarantee program and needs to be taken up at a national level. All private housing projects must have provision for low cost housing as a condition of their project approval.

8. Transport

Rail, road, water and air; all forms of transport needs to be reformed. Rail – Laloo has done a lot in terms of bringing the railways in green once again and generating reserved, but he now need to take it to the next level but means to taking up bullet trains concept between major cities like Delhi and Mumbai, Bangalore and Chennai, Bangalore and Mumbai etc. Dedicated freight corridors, expanding the rail network in northeast and the state of J & K should be taken up on a priority basis. The phenomenal success of Delhi Metro should be replicated and DMCL should be made the apex body for supervising and monitoring the progress of all Metro Projects in the country. There need to be urgency for developing Metro Projects in all cities with population in excess of 8-10 Lacs.

Road network has grown strong, but its still poor in states like UP, Bihar, Orissa and some parts of North East. Speedy implementation of road projects and highways with a strong vision of future will help India grow at a much faster growth.

Strong public transport system will enable the government to adopt free pricing of petroleum products and bring them at par with international prices. This will ease the pollution levels in cities with lesser vehicles on road.

Water transport both inland and coastal needs attention as; India doesn’t have a single passenger cruise terminal (of international standards). Developing ports with freight handling capacity and efficiency matching international standards will provide a lot of impetus to Indian Industry due to the unique geographical location of India with regards to Far East, Middle East and Europe.

I have already written a lot about reforms needed in the air transport industry. New and latest airports need to be built at lightening fast speed. Provision needs to be made for cargo and low cost passenger terminals. India need to convert its small air strips into small airports connecting every nook and corner of the country. Small aircrafts with low maintenance and operating costs needs to be developed. Private participation of international needs to be allowed in the private domestic airlines, which are already bleeding, and badly in needs to funds. Reform is a small word for what needs to be done with Air India. Air India with its unique geographical location had lost the competitive advantage of developing into a regional hub for airlines and an attractive tourist destination all thanks to our national airlines and poor airport and tourist infrastructure.


9. Rural Infrastructure
Wider roads, medical and education facilities, low cost “kuchha” airports, cargo management centers (perishable and processed agricultural products), telecommunication and IT connectivity, better access to financial institutions are just some of the many giant leaps we need to take to strengthen our rural infrastructure and have an inclusive growth for more than 600 million people living in rural areas.

10. Food and Agriculture Sector

Specific strategies for specific products, geographical areas and a grand vision for autonomous, centralized approach and action plan to achieve another Green revolution, Blue revolution, Silver revolution and many other forms of revolutions. I strongly feel that reducing subsidies and strengthening the implementation and delivery mechanism of many rural development schemes for up gradation of agriculture sector are required. India needs to uphold and strengthen its dominance in agricultural produce in the world. Sound economics needs to be applied in determining minimum support prices for the farmers and avoiding populist measures like free electricity, loan waiver; rather “kisan” smart cards should be introduced to give them access to benefits through better access to seeds, fertilizers, electricity and other essential goods and services. Agriculture procurement and marketing needs to be revolutionized so does reduced dependence on monsoon by means of assured irrigation.

(Supplementary) Medical Sector

I include this sector as supplementary as I feel medical care is a basic facility, which needs to be made available to every citizen of this country. This is a priority sector of the economy and social infrastructure in this sector needs attention. General medical practitioners have given way to specialists in big cities. Multi specialist hospitals with advance care facilities are coming up thick and fast. The state of government civil hospitals and dispensaries has taken a beating in rural and semi urban areas. There is a shortage of advance medical facilities in these areas. Rural areas even lack basic medical and maternity facilities in some parts of India. Social security of citizens and large-scale reform of all medical facilities is urgently needed. Provision of all medical students to have compulsory rural assignments before graduating is a welcome step and it needs to be supplemented with up gradation of medical infrastructure.

(Industries, Service Sector, Financial sector, land and Labor reforms needs to be taken up in Stage II of reforms)