THE EXCHANGE. The tenth day of the Mahabharata

Lest it be misconstrued, the reference to the epic is to draw parallels with our economic mission. The tenth day of the Mahabharata had critical significance in many ways. For one, it was the mid-point of a war that lasted 18 days. But more significant was the turning point (even if was through the neutralisation of Bhishma) that unlocked the door to the ultimate victory of the upright.

The mission of comprehensive development of India is in several ways akin to a righteous war that must be won at all costs. The aspirations of society overwhelmingly support this goal.

For a government elected for 60, months how is 20 months a mid-point? Because in 45 days we will have the third Budget out of its total of five (2019 will be a vote-on-account), making it one of great significance. It is also safe to say that the last 18 -20 months will be politically safe and correct, yet must showcase the results of the previous 40 months. The time is ripe for bold explicit actions and bringing true creativity to the fore.

It is vital to look beyond numbers, somewhat like a good doctor who balances temperature readings with physical symptoms for effective treatment. Of course, we cannot forsake numbers (the basis for all manner of commentary); yet, we must generate suitable strategies to defend any deemed deviations and not tailor policies to win applause on numbers alone. For beginners, begging pardon of experts, I believe decent GDP growth numbers soothe us into a false sense of security. I cannot pinpoint where the gaps lie but the situation in the marketplace does not reflect this feel-good sentiment, despite inflation of essentials being under control.

Manufacturing data brings pain almost quarter upon quarter. Housing sales are in the doldrums (with resulting effect on consumer durables). Rural incomes and consumption are both down, domestic capacities persist with low utilisation, and private investment is not picking up. We will soon have many businesses that will bleed into difficulty rather than just piling up debt overhang due to past initiatives.

Comparing day-to-day symptoms in business with the situation a few years ago brings a sense of déjà vu. If this is the ground reality at 7-8 per cent growth, something is not right.

One strategy to address this is by gearing up for even higher GDP ambitions, which will require increased resource allocations for public investment and for banks to finance private investment and growth. Such allocation is bound to attract ire from advocates of cuts in fiscal deficit (even if quality and composition of public spending — capital vs revenue —has improved).

The stretching out of the deficit reduction target (to 3 per cent) by at least 1 to 2 years seems inescapable and business must keep supporting this. Advisors may frown but stakeholders may appreciate results in 2 to 3 years. In the face of a global slowdown, exports have suffered and India has also been battered by imports across a wide spectrum. Besides tepid global markets, competitiveness is a major hurdle.

Out of five key areas that impact manufacturing cost — raw materials, energy, logistics, labour cost + productivity, and finance — there is almost no area where we have a competitive edge at a global level; therefore, India is struggling without a meaningful USP. One area where costs can be mitigated is efficient logistics; this will require consistent spending on infrastructure, not just in a spurt for 2-3 years, and must be factored into fiscal plans.

Will it not be a disaster when we have a superb Delhi -Mumbai Industrial Corridor but few viable industries to populate it?

I have argued for some time to be shown — with these present cost structures — how a grassroots manufacturing unit in India can be viable in the near future. I refer essentially to core products (cement, steel, chemicals, petrochemicals ), the kind that are usually the bread and butter of global manufacturing nations. Assembly-led businesses (cars, electronics) or thought-led ones such as pharmaceuticals or software, or service or startup businesses, all have different economics; at the present scale they are probably insufficient to drive our economy to the desired levels.

Until India generates much larger revenues at the present (or even slightly lower) rates of taxation, it will have to find some way of continuing pragmatic deficits aligned to our true needs. We cannot wish away decades of political choices overnight.

Another area where numbers pacify us is FDI inflows, which have increased commendably. In fact, FDIs will grow further on the back of domestic investment revival. But we need to keep critically evaluating additions to livelihoods without which investment flows will eventually be called a successful failure in the larger scheme of things. Let us appreciate some excellent structures and procedures built over the last 20 months which can change the very character of business practices.

Without assigning any political undertones, the fact remains that Indians have, over decades, culturally taken to jugaad like fish to water. Whom one knew became more important than what one knew; crony capitalism grew; raising money, grabbing contracts or warping fair competition required influence over merit.

All this has reduced significantly.

At this pace and under the pressure of enhancing ease of doing business, governance hygiene, and qualitative and quantitative benefits will accrue persistently. It will be a leap forward if all Central and State administrations at operating levels are directed to share the same constructive attitude towards virtuous enterprise, as all senior leaderships advocate.

One must remember that in the Mahabharata the winning side bore much pain in the first nine days and paid a heavy price and faced setbacks in the remaining half. Therefore, it is wishful thinking to assume there is no pain in the pursuit of worthwhile missions. What is critical is unwavering focus on the endgame (in our case the one word, livelihoods) and unrelenting pace of action. Brought to near desperation despite divine sympathy, on that tenth day the Pandavas were forced to both defy and look outside the traditional envelope.

The same approach may serve us, too, as well.

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