By Arun Firodia

(Mr Firodia is the chairman of Kinetic Group, Pune)

Pune, July 29, 2024: Social Welfare Schemes, variously called ‘Modi ki Guarantee’,MNREGA,‘PURA’ are going to stay since the majority poor have demonstrated and will continue to demonstrate their clout, hopefully peacefully, in the elections.Since it is high income countries that afford to spend on Social Welfare, we need to become a High Income Country to afford it.

For that to happen we need to grow our economy by 10% consistently.That will also realize the dream of Viksit Bharat.And eliminate unemployment at the same time. Let us work out a roadmap to realize this trinity

Export

Buying power of Indian consumers is limited. Rural consumers lack resources to buy much beyond the essentials. Urban middle class are busy meeting high cost of housing rentals, children’s education costsand heavy medical bills of their parents. The rich buy only swanky imported stuff. Let us not dispair.Export holds the key to economic growth and prosperity.With an exchange rate of almost Rs 84 to US$, export is highly profitable too.

Digital Services Export:

It is our prime export and growing rapidly. Yet even Ireland is ahead of us in this category. We should aim to become ‘Office of the World’. Scope of BPO enterprises could be extended to cover Government records, Taxation matters, Legal mattersOur expertise in Aadhar Cards and Rupay should be taken advantage of.

We should quickly train tens of thousands IT experts in Artificial Intelligence and encourage top Companies like Nvidia to establish their R&D Centres in India. 

It is expected that Services Export would reach $ 800 B within next 6 years from $340 B at present and take our growth rate from 6.5% to 7.5%.

Merchandise Export:

‘China + 1’ is the mantra of the day but our merchandise export lags behind our potential. Reason is simple . We rank 63rd in ‘Ease of Doing Business’ ranking. Behind Kenya, Malaysia, Kazakhstan even Rwanda !‘Single Window Clearance’ of all Formalities to set up a factory within 3 months should be urgently established in all states.But that is not all. Our manufacturers are uncompetitive because their cost of electricity, interest and logistics is thrice of Asian Tigers. Government should offer subvention of these costs to industries in proportion to their exports.   

Exporters also need subvention of interest cost to be able to maintain stock in the warehouse near importer’s factory. It is expected that Merchandise Export would add at least $20 B to $ 30B and further enhance our growth rate to 8%

Agri-Export:

Our varied climate,fertile soil, abundant rainfall and sunlight makes it possible to grow all types of fruits and flowers. We can export Pomegranates, Mangoes,watermelons mushrooms, grapes at double the price of what we get in India 

To begin with we should identify the products to be exported and invite foreign Companies to lease 1000 acres of land at suitable locations, produce their favourite product and export. A Japanese company may like to grow and export mushrooms and watermelons , a French Company may like to grow grapes and export wines, a Dutch Company may like to grow and export flowers and so on. 

Our farmers will learn how to grow these crops and our entrepreneurs can learn how to market these products. Our farmers can also learn from Israeli Company how to do farming in an arid zone .

Horticulture and floriculture amounts to 5% of our GDP. If we addionally produce and export 10% of them our growth rate would increase to 8.5%

Direct Marketing

It is possible to double rural income by enabling rural producers to sell directly to urban consumers.

In general, villages are located within 40 km of District towns. Use of Cellphone would enable an Urban customer to ask for direct delivery of milk, vegetables, eggs, even cooked food from nearby farms.

They will use electric vehicles that have very low running costs and can be charged at night when power is available in villages.

Since village economy amounts to 15% of GDP,even 5% of our villagers are able to double their income by direct selling it would take our growth rate from 8.5% to 9%.

 Double Cropping

Every drop of water that comes with rainfall should be harvested by digging borewells in Nullahs and by digging recharge structure of 6’ deep and 4 feet square at the lowest point within every arable acre-plot of rural land.It enables multiple crops as a result of increased water table. By Jaltara technique (https://waterconservation.artofliving.org)

Since village economy amounts to 15% of GDP,even 5% of our villagers are able to double their incomeby double cropping it would take our growth rate from 9% to 9.5%.

Travel and Tourism 

We should develop special packaged tours of Buddhist Circuit of Lumbini, Gaya, Sarnath, Rajgir,Nalanda to attract millions of Asian tourists. 

Also innumerable Hindu pilgrimage centres,Sikhs,Muslims and Jains too are very religious mindedand will come from all over the world and similarly we can develop packaged tours for adventure lovers, nature lovers, heritage lovers and tiger lovers. With good connectivity and excellent hospitality this sector can grow by 10% every year from present USD 240 B to US$360 taking our growth rate to 10%

Investment 

In order to grow our economy by 10% we need to substantially increase the investment.

Presently investment by Central Government is spurring our growth.Now is the time Private Sector should be induced to augment their investment.For that to happen Government should reinstate Investment Allowance Reserve for a period of 5 years. And Companies should be allowed to provide accelerated Depreciation.Central Government should continue to make heavy investment especially in building dedicated freight corridors to all ports. That would augment merchandise export substantially.

And making matching contribution to States in making our cities liveable,in food preservation silos, cold storage and Gamma Ray Radiation facility in renewable energy generation, in climate change initiatives, sustainability, in interlinking of rivers to transfer water to deficit areas

Employment Generation 

We should exempt MSMEs and rural industries from all labour laws,P.F., Gratuity etc,.They should be allowed to employ Contract Labour and Job Trainees.. 

In Urban Areas Government should start ‘Employment Linked Incentive Schemes’.

The Companies taking advantage of these schemes should be allowed to use their CSR funds for starting a skilling Centre to help employment-cum-resettlement of employees.  That will help solve unemployment problem.

 In short , Government can continue their Social Welfare Schemes and achieve 10% economic growth, year after year.