The year 1991 was a pioneer in the economic destiny of India. This was the year when India took a big step of transition to a new system. Its backdrop was probably a foreign exchange crisis that triggered the change. But whatever the reason, it was a landmark moment in history.
What were some of the major changes brought about by India in 1991? First, it moved to a more flexible exchange rate policy. It also liberalized the financial sector and freed up the capital market. It allowed global investors to invest in India.
The new industrial policy was a significant change as compared to the past. Restrictions were lifted under the Monopoly and Restrictive Trade Practices Act and businesses were free to become ‘big and beautiful’ at the same time. We also reduced the import duty to make the domestic economy more competitive. Recalls the “Bombay Club” trying to protest it.
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In the policies after 1991, we saw a flurry of activities over the next 10 years, including opening up of the banking, mutual fund and insurance industries.
Governments have changed in the last 30 years, but the direction of reforms continues. The nature of reform may have changed colours, but we have moved on.
The opening of the private equity industry in India and the establishment of three regulatory institutions – SEBI, IRDAI and PFRDA – are part of a move towards a well-regulated capital market and financial sector separate from the financial sector directly controlled by the government. .
In recent years, we have seen the beginning of Aadhaar and the digital revolution, which is spreading widely in India. If you add that with the introduction of the Insolvency and Bankruptcy Code, which is cleaning up problem companies created after the 2008 period, India has come a great distance since 1991.
At this point, it is also important to discuss ongoing major changes and the future. COVID has brought new challenges and opportunities. The digital revolution is here to become the mainstay. The pandemic has us fast-forward to five years within a year. And this change is something that India should accept on the economic side.
One of the major changes that COVID has brought about is that ‘Geography is now history’. Thanks to connectivity, a person in any part of India can connect and serve any part of the world. This is a huge opportunity for India. India should become the office of the world – both back office and front office.
Also, the digital age brings opportunities for rural-urban balance. People can live in a small village and if they are connected, you will see prosperity in rural India apart from urban India. And I am extremely positive about the prospect of ‘One India’ being virtually connected.
But there are areas where India needs to improve and focus. One is healthcare. Our investment in healthcare is 1.3% of GDP. Now we need to increase it to 3%.
Second, COVID has posed great challenges to schooling and education. The important part for India is to skill and educate its people. And digital opportunities in school education can also help educate and train all our younger generations.
The third is the challenge of sustainability. We can no longer say that we are making progress. The world is soon moving towards a carbon net-zero situation. India has to accept the change. India should take a leadership position in stability.
On a strategic basis, the priorities for India are health care, education and sustainability. Plus, there are ‘here and now’ challenges where we have to work at great speed. These include rapid vaccination, capacity building so that we can better manage the risk of the third COVID wave, and focus on jobs and job creation.
COVID has also widened the gap between the rich and the underprivileged. It is our duty to ensure that we create opportunities and jobs for millions of Indians in the days and years to come. Today, I see 2021 as a turning point for India.
There are sectors in the jobs sector that are affected. It is time for us to explore new opportunities, which are also opening up due to the digital age. Training and re-skilling are going to be important to create alternative opportunities for people in the affected areas.
Another area of focus is nurturing the Indian institutional framework. Be it judiciary, police, regulatory bodies, constitutional bodies, civil society institutions, they should measure up to what the founders of our constitution envisioned.
We should focus on performance. Return on Time Invested (ROTI) itself is an important parameter to measure. Young India today is restless and wants rapid change. It is less dogmatic than the 90s generation and expects faster results. The pace of change that India needs to move from here must be much faster than the luxuries we had in the 1990s.
This is India’s time to face the challenges and seize the opportunity in an ever normal world. Time is here. Now is the time.
– shining box, Executive Vice President and Managing Director, Kotak Mahindra Bank
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