Infrastructure & Defence Manufacturing
Must Grow The Economy
The notion of a majority government being able to carry
out its legislative agenda has been turned on its ear by a consistent failure
of Indian parliament to operate. And if the NDA government is on the receiving
end from the opposition, citing a clutch of excuses masquerading as reasons, it
is only being paid back in its own coin.
The Arun Jaitley led opposition in the Rajya Sabha, did
exactly likewise to the UPA. So, in a way, what we are seeing is nothing but
just desserts.
The person at the top, the outsider to Lutyens’ Delhi,
prime minister Narendra Modi, is, in a sense, a victim of past sins.
That the Congress,
humiliated by the extent of their defeat at his hands, is in no mood to
cooperate with him, is yet another, rather personalised reason, for the
acrimony.
But, the deeper point is that this ‘paralysis’ brought
about deliberately, instead of the discussion and debate that is meant to be
the hallmark of parliament, was certainly never intended by the framers of the
constitution. It is a subversion, and some, like the BJD from Odisha are suggesting
that the veto powers of the Rajya Sabha be abrogated.
However, as this too will take a constitutional amendment
like the GST, it is not likely to come about any time soon.
So, in the interim, it has given a fractious opposition
the means to stop almost all fresh legislation from being passed. The original
parliamentary rules have been twisted and perverted to serve the grim politics
of attrition instead. And this will probably dog this administration, almost
into its second year, for the rest of its tenure till 2019.
Therefore the Modi government has no choice but to find
another method to deliver on its promises, more or less, without the help of
parliament. In the absence of laws that could have stimulated growth and
development in a plethora of directions, laws such as the GST and Labour Law modernisation,
the government would do well to pick on some high value areas that can work
independently for it.
The two clear-cut methods to boost the economy
without fresh legislative help are in
the region of infrastructure: highways, ports, electricity, canals, railways, metros,
bullet trains, housing, commercial developments, airports and the like, some of
which have enough legislative leeway already, or have union/railway budget
sanctions in their favour.
And then there is the high investment area of defence
manufacturing under the ‘make in India’ initiative. Even if a percentage, some
20% say, of the defence purchasing shifts from abroad to this country, it will
have a considerable impact, as India is the biggest purchaser of armaments and
associated items in the world today.
Neither of these two areas are/will be particularly
hampered by the stand still in legislation, including land acquisition, which
can be facilitated by laws passed by the affected states in their respective
assemblies. Nor are they politically emotive, and are unlikely to lead to
protests if they are pursued vigorously. This, differently from nuclear power
plants, which tend to excite foreign funded NGO’s working for different lobbies
abroad.
Also, infrastructure and defence manufacturing have the
potential to considerably boost skill development, indigenous technological
ability, enhance export potential by way of project know-how, and defence
product sales, be a huge employment booster, and save on money outflows in
defence purchases to a significant degree.
The ISRO’s mastery of satellite launching technology into
space, as a shining example of quasi-military prowess, is beginning to make it
a favourite with various governments around the world.
Infrastructure and defence manufacturing can, if
developed with all seriousness, add
considerably to the annual GDP of the country too. This, coming on top of what
is seen to be the fastest growth rate of any large economy in the world, at
some 7.5% at present, is a mouth-watering prospect for many foreign observers and
would be investors.
These areas of priority development can attract large and
unprecedented amounts of foreign funding into these investment and technology
intensive areas.
The developed world, including China and Japan in the
Asian theatre, has slowed down to levels of near recession and over-capacity
while suffering from very high levels of debt.
India is one of the few stable economies that has enough
demand to sustain them all for decades to come. More and more countries are
therefore eager to tap into it, particularly if given government assurances and
safeguard guarantees.
Japan has already
begun to implement projects against its pledges of some $ 30 billion in
investment over five years, covering large swathes of India’s infrastructure,
manufacturing, and even defence/nuclear needs.
China has made a few tentative forays so far as well, and
could easily ramp up quickly. France is likely to boost its footprint in India
both in terms of the 36 Rafale fighter
aircraft it is to manufacture and supply soon, and its famous Areva nuclear power
plants. Sweden’s Saab has made a very attractive offer alongside to manufacture
its Griffen fighters in India, and assist other aircraft manufacturing projects
underway. Russia, to be visited by prime minister Modi on Christmas eve today,
is to supply the most advanced missile shield in the world, and is keen on
extensive cooperation on multiple defence manufacturing projects, plus tightly
coordinated anti-terrorist measures. Israel and America are also on board for a
number of defence manufacturing, joint operational, and other projects,
particularly in the IT sector.
The list of international collaborators, stimulated by
Modi’s strong foreign policy push, is growing by the day, and include, in
concrete manifestations, Bhutan, Bangladesh, Nepal, Sri Lanka, Australia,
Canada, Myanmar, Thailand, Singapore, Afghanistan, Iran, and the UAE. And even
Pakistan is keen to move forward from its adversarial position under a new
political thaw.
So, even
though the Modi government is hampered
by lack of consensus and cooperation from its parliamentary and political opposition,
it is not without options. And the success engendered by leveraging these
options could very well win it new allies and friends amongst various regional
parties as the time goes on. This, despite rather bleak prospects in various remaining
state assembly elections forthcoming
between now and 2019, because of the probable use of the mahagatbandhan formula
that has worked so well against the NDA in Bihar.
Of course, given the rampant corruption being exposed in
key components of the opposition camp, including an embarrassing property scam that involves the top leadership
of the Congress, the opposition unity may also come under some pressure as the
time goes on.
Still, for the moment, the Modi government must urgently
play to its strengths to seize the initiative.
For: The Pioneer
(1,106 words)
December 21st, 2015
Gautam Mukherjee
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