The Reserve Bank of India has forecast a 7.5% decline in GDP this fiscal. As progress on the ground gets reported and as the energetic response to COVID-19 gets focused on the shop floors, the decline could turn out to be much lower. Using a flatline as base, the potential for 10% growth emerges as the only possible way forward. We analyse all the positive movements that drive this turnaround.
Rural India is revving up for a productivity uptick on account of four positive movements.
- Freedom to sell produce throughout the country. Availability of MSP as a safety net.
- Availability of the internet across the length and breadth of the country.
- Huge stocks of grain thanks to two good monsoons, putting India in a position to be a grain exporter for the first time. Scarcity and security are being replaced by abundance.
- Massive resources being invested in basic services such as roads, sanitation, micro and other renewable grid power, water through taps, schools, health centres, entrepreneurship development cells, micro finance and technology dissemination centres.
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What these movements can deliver to rural India
- Conversion of all 6.5 lakh villages to smart villages over a three-year period.
- Crop patterns changing to massively raise productivity by deploying vertical agriculture, drip irrigation, machine learning-led fertilisation from natural sources, ML-AI led crop protection, deeply penetrated insurance, and the availability of finance.
- Transition to planting fruit trees with low gestation period, as has been successfully done in Maharashtra, MP and Gujarat. A reallocation of ten percent of the land to highly productive fruits and vegetables can change farmer incomes by 3-5 x their present levels!
- Massive self-help led regeneration of water resources by mandatory rain water harvesting, building of bunds and dams, terracing land, opening up clogged acquifiers and flowing water through existing river tracks.
- Rejuvenation of lakes and a major thrust on completing last mile action requiring irrigation projects.
- Farm advisory apps, technology driven awareness and education and prediction systems will get more ubiquitous. All media is reaching out to the last mile. FarmPrecise type services will become more available as we move forward.
The incremental GDP growth that these initiatives can deliver is more than 3%.
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Services are about to be revolutionised as a trillion-sensor world, a complete embracing of ML-AI, robotic process automation, data analytics, VR-AR, and voice to text and automated commands emerge rapidly. Quantum computing and the establishment of data centres are making compute and storage power available at an unimaginable scale. We are gearing up to data-led lending, monitoring, recovery, regulation and diagnosis.
What will these movements deliver to our service economy?
- As working from anywhere becomes more and more possible and convenient, India’s service and information technology advantage will truly go global and accelerate our market penetration in many areas.
- The education revolution will take off as the National Education Policy unshackles education. Farmers, students, doctors and indeed the entire working population will reskill, upskill and readjust to new needs.
- Healthcare and retail will be fully digitised in three years, engendering massive e-commerce expertise and recommendation engines at a micro-retail level; tele medicine and initial diagnostics by expert doctors at scale; phone commerce, device, wearables and embedded sensor driven continuous self-monitoring ability.
- Accounting, auditing, basic legal services and all consulting will move to a cloud driven, streaming data paradigm.
All these and more will raise GDP growth by a minimum 6% per annum.
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Manufacturing will move to ‘additive’; 3-D printing will take off; the scale and quality will be immensely enhanced. India will be an early adapter of sensor based IOT. We need to keep windows to these technologies open to any place on earth. Add to this mix, Robotics, VR-AR and data led, voice command driven precise implementation of processes, and manufacturing for the world can become a reality. The Made in India label must be a label of high and reliable quality.
What will these technologies deliver?
- Scaled up, precision embracing manufacture for the world.
- The SME supply chain will be pulled up by large manufacturers who must deliver on time and at scale to the world.
- Costs will become super competitive and so the barriers to inland out bound commerce will never be raised. Indeed, they will fall.
- India will lead the move towards free trade in goods and services.
This transformation will lead to a 3-4 % increase in GDP.
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Transformations in the Banks and financial systems will be led by end-to-end digitisation, early warnings on debt defaults, digital payments replacing all other modes and a transparency that will prevent misuse of funds. This is the single most important factor that the world is waiting for India to transform. Once the signals of real change become visible, a 2% jump in GDP is feasible.
Finally, if the judicial system can deliver judgements in a maximum of 12 months using bunching, special courts, additional court house construction, filling all judicial vacancies and a voice to text automation for judgment pronouncement, the enabling environment will be ready. Certainty of law and justice alone will bring in massive FDI and FPI flows. These in turn will catalyse growth and encourage rapid domestic investment.
These are the positive movements that will put brand India in the league of top nations. We need to embrace them and take back our position as the fastest growing large economy in the world.
(Shailesh Haribhakti is corporate leader based in Mumbai. He is a chartered and cost accountant, and writes regularly on the Indian economy and public policy.)
Shailesh Haribhakti is a Chartered and Cost Accountant, an internal auditor and a certified financial planner. He is a board chairman, audit committee chair and independent director at some of the country's most preeminent organisations. He is a thought leader on the Indian economy and public policy.