In the context of nations transforming themselves, I remember reading about how Japan and Germany rebuilt themselves after being all but destroyed in the mid-1940s. In the early days, Japanese products were not known for the quality that they have been known for since the 1980s. But the Japanese people would buy locally-made products to support a nascent domestic industry. A couple of decades later, we saw the emergence of South Korea, Singapore, and Taiwan as other notable examples. Perhaps the most recent success story is that of China. As may be seen from the chart below, till the mid-1980s, India and China were at approximately similar levels of GDP. It is only in the last two decades that China has grown so much faster than we have, making its economy five times as large as ours.

                                      [1] Figure: Graphical representation of GDP of India and China

What is the common thread that runs through the transformation of all these countries? In my view, it is national pride and the resulting sense of collective purpose that created a virtuous cycle of sustained innovation and excellence. Japan and Germany found their mojos in the automotive, consumer electronics and heavy engineering and chemical sectors. Over time, South Korea took over the mantle of the world’s electronics hub, while China has become the “world’s factory”. Even a relatively small country like Taiwan has demonstrated its prowess in high-tech manufacturing.

The rise of India’s own IT services industry in this century is another good example of the fact that the right leadership can harness determination and pride to great effect. In this case, private enterprises took the lead in the mid-1990s. There were few regulatory restrictions to begin with and soon, with enablers such as SEZs, companies in this space thrived. TCS, Infosys and Wipro were the initial home-grown leaders, but thereafter, others, such as HCL and TechMahindra emerged. Today, foreign companies have a significant presence in India- a tribute to the strength of our talent.

But this blog is not about the success of Indian IT companies. The mantra behind the success of India’s software industry is pride. A sense of belonging (and aspirations) powered every individual associated with the industry to refine delivery models, introduce automation, etc. All this allowed companies to constantly reinvent themselves in line with what their customers expected and needed. A similar sense of pride needs to be instilled in all our citizens so that no matter what they do, they aspire to be the best.

I recall watching a video circulated on Whatsapp some years ago, that showed a young Indian boy who had picked up a smattering of several foreign languages. This helped him to converse with foreign tourists and he was able to sell his wares to more people. Imagine if tourist guides across India picked up multiple foreign languages and were able to explain the local sights and sounds better. Of course, it can be argued that technology allows tourists to buy a headphone and listen to a commentary in a language of his/her choice- but that would be a one-way communication and inherently limited to what the recording offered.

It is said that one can confidently set one’s watch to the time Japanese trains arrive/depart from their train stations. That is a mark of pride in being punctual and also people taking pride in their work. Sadly, these are not yet virtues that have been embraced by a majority of us. Mumbai’s famous “dabbawalas” are a stand-out example of a group of people taking pride in their work, and thus maintaining consistently superior levels of six sigma performance.

For years, India’s DRDO (Defence Research & Development Organization) has been accused of not delivering the kind of indigenous products that our defence forces needed. But in recent years, several products and systems have emerged from DRDO’s various labs that are likely to be inducted into the armed forces in the next couple of years. In fact, the past two months alone have seen at least half a dozen tests of tanks, missiles, radars and so on. Pride in one’s work will lead to better output and outcomes. These will raise the confidence that stakeholders have in the organization, and open the doors for more budgetary allocation to drive even more R&D.

The ISRO (Indian Space Research Organisation) is perhaps one of the best examples of this virtuous cycle. Over the decades, many of India’s space scientists and engineers chose to work for ISRO out of a sense of passion and pride, and not because they could not find jobs elsewhere. It is not as if ISRO has not had setbacks- but they have had many more successes than failures. As space becomes the next arena sought to be dominated by various countries, this sector will become even more strategic for India, given its implications for national security, communication and disaster management.

Now that space as a sector has been opened up to India’s private sector, there will inevitably be pressure on ISRO to maintain its trajectory of performance. But I believe that the sense of nation-building and pride in India that Dr. Sarabhai and his successors have instilled in ISRO will enable India’s space agency to retain its edge. ISRO may well team up with private-sector startups to take India’s space tech capabilities to a higher orbit- a win-win for ISRO, the private sector and India as a whole.

Cleanliness is another attribute of a city or country that evokes pride. Over the past five years, the residents of Indore have been taking pride in their city being declared the country’s cleanest- and this has rung in attitudinal and behavioural changes. I am not denying the role of the civic authorities in maintaining cities clean, but unless residents cooperate, no civic authority can succeed. I was born and raised in Calcutta (as the city was called before 2001). Even the most diehard Calcuttans will agree when I say that until a few years ago, Kolkata was not a very clean city (it has become much cleaner now). But right from when the city’s first metro service (also India’s first) began in the mid-1980s, metro stations and trains were remarkably clean and well-maintained. This was because the city’s residents took pride in their metro system.

This sense of pride must extend to all categories of Indian products and services- from public transport to private cabs; from real estate agents to sub-registrar offices; from small clinics to multi-specialty hospitals and so on. Only then can we as a country develop in an inclusive manner and not in a lop-sided way that constantly widens the gap between the rich and the poor or between urban and rural residents. As states compete to attract investment, infrastructure, tax breaks, labour laws and availability of talent locally are important determinants of how successful they will be. But imagine the attractiveness of states that have cities that are clean, or whose people take pride in punctuality, not striking work, etc. These factors will, in my view, play a vital role in delivering the true promise of “Atmanirbhar Bharat”.

As US-based Nigerian author, Idowu Koyenikan has said: “Your pride for your country should not come after your country becomes great; your country becomes great because of your pride in it.”

Especially in the past three decades, as India has opened up its economy in a calibrated manner, its large domestic market attracted investments across sectors. While the market size is undoubtedly an important criterion, other aspects that make it easy to do business are just as critical. As a nation, India competes with other countries. In an increasingly globalized world, when investors (foreign or domestic) commit risk capital to India, they are making a conscious choice. Other countries (e.g. Vietnam, Malaysia, Bangladesh etc.) may not have large domestic markets themselves but are attractive as hubs for manufacturing products that are then exported around the world, giving a boost to the local economy.

Through sector-specific “liberalization” and “reforms”, Indian governments have, since 1991, been taking steps to attract investments into the country. Modifying the legal framework governing such investments and operations is a key enabling action. The results are visible, as India has become self-reliant in many areas. Today, we export many products and services to countries around the world- including the world’s most developed nations. But there are still many gaps that need to be plugged. Electronics are embedded in almost every industry, but we as a nation are a long way off from being self-reliant in this strategic field. Vital ingredients for the pharmaceuticals sector too are imported, as are telecom and defense equipment that is vital to our nation’s security.

For decades, governments and entrepreneurs have mistrusted each other. High levels of mistrust have also existed between private sector management and the labour force. In the context of India’s cooperative federal structure, as regional political parties have emerged and been elected to power, the chasm of mistrust between state and central governments has generally widened. That is why sectors such as agriculture and education, which are both fundamental building blocks of any economy, continue to be shackled by many regulatory restrictions. India’s labour law regime too continues to be viewed as lacking the level of flexibility that exists in many other countries.

That India has the potential to grow rapidly is well-known. But to realize this potential, we need to quickly bridge the widespread trust deficit and ensure that all stakeholders are aligned towards the overall purpose of India’s overall development. Given India’s large population, levels of illiteracy, weak healthcare infrastructure, wide income disparity, and lack of a social security net, there is no silver bullet. That is why, what is needed is a holistic approach that enables balanced, all-round development of every component of India’s economy- agriculture, manufacturing and services.

To use an analogy from cricket, AB de Villiers is known as a destructive batsman (especially in the T20 format) because of his ability to play shots all around the field. Governments– both at the center and states- must develop a similar kind of “360⁰ perspective” to enable the development of all sectors and all segments of the population (children, women, LGBTQ, those affected by mental health disorders, rural and urban residents, entrepreneurs, workers, etc.). I believe that it is through this kind of lens that we must view the actual and proposed changes to laws in the past year or so, as their overall intention is to unshackle different segments/sectors of India so as to accelerate development.

This kind of mindset will inevitably create competition amongst states to attract investment– and thus infrastructure, jobs, and overall development. Such competition will force politicians, private enterprise owners, citizens and all other stakeholders to work towards a common purpose. We have started seeing this play out in bits and pieces in some parts of the country, but much more needs to be done by state governments, given that the onus for formulation and implementation of many policies that are critical to creating a welcoming investment climate lies with them.

Here are 10 examples that clearly signal the government’s intent to make it easier for companies to do business in India and thus contribute to an “Atmanirbhar Bharat”:

• Introduction of the Production Linked Incentive (PLI) scheme to attract manufacturers of mobile phones, electronic components and microelectromechanical systems to make in India.
• Changes to the Companies Act (e.g. decriminalization of offences other than fraud or where the larger public interest is involved; removing imprisonment as punishment for minor offences, etc.)
• Changes to labour codes relating to Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions. It is expected that these changes will give companies with less than 300 workers greater flexibility in retrenchment without obtaining prior government approval. The changes also restrict workers’ rights to strike work without giving 60 days’ notice.
• Changes to the Insolvency and Bankruptcy Code.
• Allowing farmers to sell agricultural produce outside the Agricultural Produce Market Committee (APMC) mandis, thereby reducing the role of middlemen and giving farmers the option to sell their produce at more remunerative prices.
• Allowing companies to raise equity capital outside India by listing their shares in specified foreign jurisdictions (without requiring listing in India as well).
• Allowing private sector participation in the space sector, including launching satellites, setting up control centers outside India, develop new systems and offer “Spacecom” services around remote sensing, navigation, space exploration etc.
• Simplifying the Environment Impact Assessment (EIA) process for certain projects.
• Changes to the Food Safety and Standards Authority of India (FSSAI) regulations to make people more aware of the health risks of packaged foods and banning of e-cigarettes to ensure that our citizens can make better-informed choices around their health.
• Reducing ownership of firearms by decreasing the number of firearms allowed and the validity of the licence.

Many of our country’s laws were originally formulated several decades ago when every aspect of society was very different. The intervening period has seen myriad changes driven by technology, greater awareness of the environment and the imperatives to protect it, progress in the field of medicine and health care, etc. Perhaps the most significant change has been ushered in by the COVID-19 pandemic, which has fundamentally changed the way millions of people live and work.

As our environment evolves, it is only natural that laws too will need to evolve in tandem to ensure that they remain relevant and effective. As our policy-makers formulate new policies and enact new laws, they would do well to be guided by the line “Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit” from Gurudev Rabindranath Tagore’s famous poem “Where the mind is without fear”. While modifying laws and framing new ones, the objective should be to enable and not just control. Here are some additional areas that the government must urgently turn its attention to:

1. Enact specific data protection laws that are appropriate to India in light of the growing wave of digitalization around us. Making tweaks is not enough; a comprehensive legal framework is needed.
2. Eliminate the need for multiple regulatory filings by allowing companies to upload data to one location from where regulators can access what they need. This can go a long way in easing the compliance burden. A study by Teamlease has found that Indian businesses operate under the burden of more than 65,000 compliances, including 2,500 regulatory updates and 3000 filings in a year![1]
3. Come out with a Direct Tax Code that reduces the need for frequent and large-scale changes and thus provides a higher degree of stability and predictability to companies and individuals.
4. Rationalize the GST regime by reducing the number of rates and further simplifying the compliance process.
5. The New Education Policy to encourage “critical thinking” in students and enable the creation of world-class institutions of higher education in India is an excellent step. In order to accelerate this transformation, I believe the government must enable reputed foreign universities to set up campuses in India. Perhaps this can start with online access to classes- a phenomenon the pandemic has already forced on educational institutions. In addition to creating domestic R&D capabilities in areas such as robotics, AI, healthcare, etc., such a move can also help India conserve valuable foreign exchange in the form of the money spent by Indian students studying abroad- resources that can be deployed elsewhere.

Of course, building political consensus around such policies will not be easy. But the emerging context has, in my view, created a conducive environment to push forward with bold structural reforms that will help transform India holistically, and not just facilitate lop-sided development.