An observation made recently that impressed me but which I could not successfully articulate earlier is that India is a country that consistently disappoints optimists and the pessimists.

Although this is unflattering, what better way can we convey that we, as a nation, accept and even celebrate satisfactory under-performance ? This term may be the contemporary synonym for Hindu rate of growth. Unfortunately, higher growth may now be doubtful and the present rate is insufficient to serve the needs of an under-employed and exploding legion of job-seekers.

Too many distractions

India has job creation problems even as global unemployment is at its lowest. Income inequality is a key concern that must be addressed by economic development agendas, or these agendas will collapse under political realities.

My core query is whether in our economic marathon — where government, business, society and media are participants — are our eyes firmly on the ball? Or do we permit political expediency, proclivity to intrusion, emotions or even hysteria to modify priorities?

My aim is not to criticise but to offer a neutral view on what businesses face and give ideas/opinions about Indian enterprise and economy. It can be reasoned there is more to the health of society than the well-being of businesses alone, but this is beyond the scope or purpose of this column. The context today is that there is no comprehensive agenda more important to the nation than economic development. An added context is that enterprises that add value and/or employment are having to struggle to bring back their concentration and focus on core business issues. Much time was spent addressing external, non-core diversions.

Established large businesses have infrastructure and scale to attend to increasing regulatory and tax compliances and raising financial resources. Their operating difficulties are thus minuscule compared to issues faced by smaller businesses, who have lower bandwidth at the owner and supervisory levels. The daily gusto of the large cannot be endorsed by the small.

Yet, the latter are the real employment generators and investors in aggregate. One must critically evaluate what vigour, if any, they are left with to consider growth and investment. Are they inspired enough to participate and expand?

Imagine an entrepreneur — struggling to sell his product, pay wages/salaries, pay statutory dues, pay for energy and raw materials, etc — who finds his borrowing classified as NPA and his business a defaulter (not wilful) since he may not have paid an instalment in full. Under the present disharmony his plight will be pitiful and he will be lucky to survive.

Banks’ hands were full with directives subordinate to core banking. Logistical stress from policy-led moves almost surely affected operations at branch (and decision-making) levels. Withdrawn currency took long to replace and the RBI is still recounting currency 15 months later. The impact on the efficacy of banks and the regulator has not been assessed.

Not so simple

Dealing with NPA resolutions on a full-time basis has consequences and negatively tutors the thought process. The system tends to become more policeman than custodian or sponsor.

NPA problems have been with us since 2013. But if one was to go by what one sees, the country suddenly seems to have no problem bigger than NPAs or the people who “caused” them. Also, it seems bankruptcy and liquidation are now bigger headlines than business growth. Sound bytes make you imagine that once these problems are resolved all will be hunky-dory, banks will be healthy and investments and jobs will magically return. But it’s not that straightforward. Even after accounting for the physical stress of banking operations, concerns remain regarding the administrative bandwidth for servicing borrowers or providing resources at acceptable terms and conditions. Bankers coming under scrutiny adds to the challenge.

Suggesting that every borrower (even if above a certain level) could be potentially delinquent or may abscond is not unlike suggesting that all individuals are potential thieves until proven otherwise. Political pragmatism aside, noise and hysteria must not alter the unwarranted into appropriate.

Across many areas, regulators have moved from development and regulation of their sector to far-reaching exercise of control. The dismantling of legacy or bureaucratic thought processes has not happened.

An all-pervasive Aadhaar will surely affect systemic efficiency and delivery but without like value addition to users. Corporate governance hassles really bite into the energy available for business. Collateral risks of investing in enterprise today outstrip what prudence tolerates.

Whether in banks or business, mere ownership does not assure flawless governance. Perceptions deepen a hypothesis that having deep pockets signifies good governance. It will be a let-down if NPA resolution, asset transfers at discount, or even FDI flows do not deliver governance or real investments and job creation.

The trust factor

I believe Indian business and commerce deserve to be respected more visibly; by all means attack wrongdoers and berate them publicly, but silence on the balance majority can paint all businesses black in the public mind and magnify divides. Business on its part must also demonstrate that it deserves to be trusted.

The idea is to breed meaningful comfort and encourage prudent domestic and foreign entrants. Disruptions, knee-jerk reactions or “burning at the stake” have serious influences on economic effectiveness; so does fixing what may not be broken.

We need constant articulation of better thought-through priorities and timelines, because when everything begins to have a high priority nothing really does.

To summarise, the concern is that the core agenda of job creation through economic growth must not stumble. It is said that the best-laid plans often go askew and leave us nothing but grief and pain. Keeping our eyes on the ball becomes imperative throughout an era, not just at the beginning.

This column explores ideas and opinions on Indian enterprise and economy. The writer is an entrepreneur and former president of Ficci. The views are personal

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