The problems India ignores: Fixes, not vision, key to 8% economic growth

There are dozens of issues that slow our growth far below potential. They don't need a grand vision, but they urgently need attention if India is to grow at over 8 per cent

What will India need to become a global economic powerhouse and a developed nation by 2047? Everyone, including this columnist, has pointed out that our gross domestic product (GDP) will need to grow consistently at over 7.5 per cent for a sustained period — ideally over 8 per cent (real GDP growth, not nominal).

 

What will help us grow in that manner? In my book — Will India Get Rich Before It Turns 100 — I have pointed out that among the things we need to focus on are education and health care, without which no country has been able to take advantage of a demographic bulge. Apart from that, consistent, long-term, stable policies, improved logistics, manufacturing, and technology research and adoption are critical focus areas.

 

There are also looming threats, as well as opportunities, that policymakers need to develop strategies for. These include climate change and artificial intelligence. In addition, there is a need to develop and control the entire ecosystem in multiple critical areas — from key drugs to computer chips and rare earths — so that we are not dependent on other countries.

 

If we leave aside the big picture though, there are multiple issues that receive little attention simply because they do not require a grand vision. These issues slow our growth, despite many good policies and efforts by the government. They are often talked about informally among entrepreneurs — small, medium and big — when no government representatives are present.

 

These are all genuine pain points that the average entrepreneur, worker, and citizen face daily, resulting in reduced efficiency, lower productivity, and wasteful spending.

 

Let us look at some of these issues, starting with the quality of newly built infrastructure on which hundreds of crores are being spent. Prime Minister Narendra Modi’s government has maintained a steadfast focus on infrastructure development since its first term. Every Union Budget has allocated large sums for this purpose. Thousands of kilometres of highways have been built, and port and airport capacities have been expanded.

 

Unfortunately, much of the new infrastructure is inaugurated with great fanfare, only to start showing problems within weeks or months. New airport terminals struggle to cope with their first rains. Highways costing hundreds of crores develop cracks and potholes in no time. Roads meant to last two decades require repairs within six months. Several bridges have collapsed even before completion. Water tanks, built with crores of public funds, have collapsed within months of being finished. Examples of poorly designed roads, flyovers, and bridges from across the country keep surfacing on social media, along with their photos.

 

Apart from the expenses and time spent on repairing and rectifying defects in newly built infrastructure, what is often not captured is the lost time and productivity caused by badly built infrastructure. From extra time spent commuting to increased fuel, these affect people’s productivity and show up in slower GDP growth. They are tiny but visible barriers to our logistic and manufacturing competitiveness.

 

The quality problems persist in sectors other than infrastructure. In some services or products, they manifest themselves as safety issues or non-standard quality goods. Take the case of the recent crash of the Air India flight. While the exact reason for the crash will be known later, after the investigation is complete, a veritable Pandora’s box of issues has been opened following the crash.

 

From huge understaffing at the Directorate General of Civil Aviation (DGCA) to a cavalier approach to safety procedures by Air India officials at the very top, the enormous but entirely solvable problems of our aviation sector have come under harsh spotlight. Ditto for railway crashes, which turned the spotlight on the thousands of vacancies not filled by Indian Railways — a major cause behind the accidents, apart from ageing lines and other issues. 

 

Or take the case of our food and drugs quality controls — from severe understaffing of our regulators to lack of punitive action on manufacturing units that are regular offenders. These issues show up in non-standard quality drugs and food products that do not conform to safety standards. These, in turn, show up as increased health costs for citizens, and loss of productivity as well.

 

There are dozens of other issues as well — from the poor UI/UX, inadequate processing power, and limited bandwidth of our government websites to the inadequate speeds and service of our telecom sector — all of which result in lower productivity.

 

These are all well-known issues. Some stem from deep-seated corruption that Prime Minister Modi has repeatedly promised to eradicate. Others are simply the result of a lack of interest in creating high-quality products and services. The government, the corporate sector, and citizens all are equally responsible, each in a different way.

 

These are not easy problems to solve but they are not difficult either — if the governments (Union as well as state) focus on them. Other countries have also faced corruption issues and managed to solve them. Many countries — including Japan — started with serious quality problems but went on to become the beacons of quality later on. What is required is political will and a national shift in mindset. If the first happens, the second will follow.

The author is former editor of Business Today and Businessworld, and founder of Prosaic View, an editorial consultancy