Modi government’s 10-point agenda.
I think it’s almost brilliant to put bureaucrats at the top of the list who should be encouraged to make decisions without fear. In a sense, he is paralyzed. The Indian government is extraordinarily big and it is hard to try and believe that one leader can change everything. This is a federal arrangement. In a large bureaucracy you cannot practice transformation without cooperating with the bureaucracy.
So empowerment became important. That’s a good sign. If you think, one of the main fears about Modi was an authoritarian approach. Putting the empowerment of the bureaucracy at the top of the agenda, I think one has to appreciate and admit that it is certainly not the work of an authoritarian.
About disbanding the ministerial team.
There has been a case study for business schools on how to practice leadership and make an impact on a new job from day one, without creating too much heavy weather. He is setting a clear agenda and making a clear commitment to measure progress against that clear agenda. For example, creating an agenda for 100 days will define what the matrix will be to measure the success of that agenda. It is important that every day some growing progress is made towards that agenda and that progress is made clear. He has prepared his team, which is a focused team. To me, every decision should be a sign of active decision-making and the removal of the red tape and bureaucracy, not a Big-Bang reform. And the promise of faster decision making in the future.
Concerning the immediate priorities of the government.
In the 1980’s, I wrote a column entitled ‘Roads to Nowhere’. We were not building enough roads then. (Among them) America’s competitive advantages may be its highways and its transportation network. These are like the blood vessels of the economy and they create job opportunities. Therefore, in a fun sense, the best thing anyone can do to build an inclusive economy is through road construction, because market access or lack of market access is one of the most discriminatory jobs for the poor, especially the rural poor. This is not something we think about automatically but roads are a process of building inclusion in the economy. So, I think the sooner he does, the better for the economy. Roads (given) have huge economic data to show a greater incentive for rural income than even irrigation. This will help double the income of households and allow for a kind of diversification from dependence on agriculture which creates productivity.
On Indo-US relations.
I’ve been here (in the US) for quite some time. The Indian election has generated a lot of interest. Most diplomats and political pundits are now urging Washington’s leadership not to miss the diplomatic opportunity for the United States to rebuild a very strong relationship with India. They think the United States lost ground because of the visa dispute and they should now rediscover the ground and build a stronger relationship.
There is a feeling that both Japan and China have stolen a step forward in building such a relationship with India. In my opinion, there is going to be a strong effort from the decision makers here to reach out to the Prime Minister and his colleagues to rebuild the relationship.
The new government will lean even more to the east — Japan, China, South Korea.
Significant interest has been shown by Japan. It is a country with a liquidity overhang and an investment surplus. Modi knows that very well. Why Japanese investors are lagging behind because they have not realized any of the promises we made to gain traction.
In the case of construction and large industrial projects, they can take pole position in large projects here. That being said, everyone was speculating about the position of the Prime Minister and the Cabinet and the Prime Minister is his own man. My argument is that our Prime Minister is a realist man and he knows that any kind of revenge has no role in foreign policy.
I think its whole purpose is to improve India’s economic health and what should be India’s rightful role in the world through that gain. The truth is that we are the largest democracy in the world and we are all aware that the power for a nation and its role in global affairs comes from economic power. I think in his own way and at the right time, he will respond positively if the right signal is sent from the US administration.
About FDI in defense
We have been consistent since entering JV with a foreign company. We did not change our position. From the beginning we have been representing to the government that allowing at least 49% investment through automated routes is a positive step. Because it encourages foreign partners to set up technology in JV. Otherwise, there is caution on their part to provide 100% support to the joint venture. So if you really want to create the best technology here, (it should be) a minimum 49% stake, which we have always supported.
About Mahindra’s investment plans.
We have never been reluctant to invest. Even during the downcycle, we never stopped investing. We invested in the Chakan Automotive Plant when the economy was in recession; We invested in a tractor plant in Zahirabad when the tractor market was falling. We were able to increase our output when the tractor market improved. We have always had a long-term view of the economy. We have consistently invested. We must invest in defense, for example, if the government starts buying again for much-needed upgrades. “We are considering an investment of Rs 4,000 crore, which is independent of new developments,” Pawan (Goenka) said in a statement. It was something we were going to do.