Brief Summary
Amitabh Kant discusses India's economic reforms, emphasizing the importance of implementation and leveraging global challenges as opportunities. He highlights the need for accelerated reforms beyond GST simplification, focusing on labor laws, disinvestment, urbanization, clean tech, and skill development. Kant advocates for private sector involvement, aggressive tourism promotion, and re-engagement with China for manufacturing. He stresses the significance of exports and productivity improvements to achieve India's growth potential, urging the government to focus on implementing already announced budget measures.
- GST simplification is a positive step, but more reforms are needed.
- India should leverage the H1B visa issue to attract talent and investment.
- Focus on implementing existing budget announcements for urban renewal, clean tech, and skill development.
- Promote tourism aggressively and re-engage with China for manufacturing and job creation.
- Encourage domestic funding for startups and create fund of funds for deep tech.
GST Simplification and Further Reforms
Amitabh Kant commends the government's GST simplification as a boost to consumption and investment, but stresses that it should be the start of an accelerated reform process. He points out global challenges like supply chain breakdowns and protectionism necessitate further reforms. Kant suggests India should use the H1B visa issue as an opportunity to attract American companies to open GCCs and increase outsourcing in India due to the lack of talent in the US.
Quality Control Orders (QCOs) Review
Kant calls for a review and elimination of quality control orders (QCOs) on inputs, which he believes are hindering the competitiveness and export capabilities of medium and small industries. He describes QCOs as licensing by the back door, brought in under pressure from industry lobby groups, which is damaging India's economic prospects. He insists that these QCOs make the end product very expensive and make the country non-competitive in the global economy.
Key Areas for Government Action
Kant outlines several key areas where the government should focus for quick implementation. These include implementing already passed labor laws, pushing for disinvestment and asset monetization, creating smart urbanization with the announced one lakh crore urban renewal fund, and implementing the clean tech mission to reduce import dependence on solar and electric components. He also emphasizes the need for a significant push in skill development to leverage India's demographic advantage and create jobs.
Privatization and Asset Monetization
Kant advocates for the privatization of assets like the Ashoka Hotel, stating that the government has no business running hotels. He expresses optimism about the privatization of IDBI Bank and other banks and insurance companies, urging the government to act swiftly to avoid fatigue. He emphasizes the need for bold and courageous decisions to face global challenges, drawing inspiration from the government's handling of GST reforms.
Urban Renewal and Infrastructure
Kant discusses the importance of urban renewal and infrastructure development, emphasizing the need for political will and administrative ability to drive good smart urbanization. He highlights that the top 20 cities contribute significantly to India's GDP and that improving drainage, sewage, and roads is critical for India's future growth. He also suggests implementing the fund of funds for deep tech and clean tech to attract investments through private equity and venture capital.
Fund of Funds and Startup Ecosystem
Kant stresses the importance of a fund of funds to support deep tech and clean tech startups, similar to how it boosted the startup movement in India. He suggests that not only the government but also entities like LIC and major conglomerates should create fund of funds to attract venture capital and promote disruption in deep tech. He advises against the government picking up equity in startups, suggesting the use of viability gap funding instead to avoid bureaucratic interference.
Domestic Funding and AI Development for Startups
Kant points out that the Indian startup movement relies heavily on foreign funding and advocates for more investment from Indian family houses, business houses, insurance companies, and pension funds. He highlights the importance of building AI on top of digital public infrastructure, making it open source and open API to accelerate innovation. He also suggests that India should welcome back Indian talent from Silicon Valley to drive disruption in India.
Tourism Promotion
Kant identifies travel and tourism as a significant opportunity for India, especially with the country buying a large number of planes and sending many tourists abroad. He criticizes the lack of an "Incredible India" campaign for a decade and India's absence from world tourism marts. He urges the Ministry of Tourism to aggressively promote and market India to attract foreign tourists, who provide higher returns compared to domestic tourists.
Private Sector and Bureaucratic Mindset
Kant contrasts the wealth-creating focus of the private sector with the status quo mindset he observes in many bureaucrats. He emphasizes the need for civil servants to dismantle unnecessary rules and regulations, disinvest heavily, and promote India as a tourism destination to achieve the Prime Minister's vision of a 30 trillion dollar economy. He advocates for an aggressive and progressive mindset among civil servants.
Re-engaging with China
Kant suggests that India should re-engage economically with China, encouraging Chinese companies to form joint ventures with Indian companies for manufacturing in India. He notes that many top American companies manufacture in China and that India should leverage Chinese expertise to create jobs and transfer technology. He emphasizes that even during strained relationships, China has successfully attracted investment from Taiwan and Japan.
Swadeshi in Contemporary India
Kant defines swadeshi as making and starting up in India while being an integral part of the global value chain. He stresses the importance of penetrating global markets and not just selling in India. He argues that despite protectionism, India must aim for exports to achieve high growth rates, as every period of significant growth in India has been driven by exports.
Globalization and India's Growth
Kant observes that the United States has been the biggest beneficiary of globalization, retaining a significant share of global GDP. He suggests that India should use the opportunity created by changing global dynamics to push for manufacturing, create jobs, and grow with jobs. He identifies the need to reduce logistics costs, power costs, interest rates, and the statutory liquidity ratio to become more competitive.
Implementation of Budget Announcements
Kant reiterates the importance of implementing budget announcements related to disinvestment, deep tech, urban reforms, and the clean tech mission to accelerate India's growth. He emphasizes that his suggestions are based on what has already been announced in the budget and that the key is implementation. He concludes by advocating for reinforcing the "Incredible India" brand for tourism promotion.