The pilot episode of Transforming India - The Road to 2047 with host Sachin Kalbag discusses India's ambitious goal of becoming a developed economy by 2047, emphasizing the need for a transformation agenda to achieve high growth. Featuring insights from JSA Advocates & Solicitors' Amit Kapur, Joint Managing Partner and Siddharth Shankar, Partner; both prominent figures in India's legal and economic landscape, the conversation highlights the importance of public policy and regulations in fostering domestic and foreign investment. Kapur stresses the need to harness India's demographic dividend and entrepreneurial spirit to sustain economic momentum. While addressing the challenges of converting the demographic advantage into a skilled workforce capable of driving growth, the speakers also discuss the significance of micro, small, and medium enterprises (MSMEs) and startups in this transformation. Setting the stage for a series focused on strategic policies and reforms essential for India's future, Kapur & Shankar wrap up with a call to action for re-energizing the workforce and creating an environment conducive to investment and innovation.
Mint in partnership with India's leading law firm, GSA presents the thought provoking podcast series, transforming India, the road to 2047. India aims to become a developed economy by 2047, a milestone that would be transformative, not only for India, but for the rest of the world. Given that we have one sixth of the global population.
In 1991, few believed in India's potential, but the first phase of transformation has become a reality driven by fundamental policy and legal reforms. These changes have redefined aspirations, opportunities, and And instilled confidence in Indians to compete globally. India now stands at the cusp of a unique opportunity, a convergence of economic growth, geopolitical advantage, global support, financial capacity, and its own demographic dividend.
This must be harnessed to achieve. It's transformation aspirations to seize this opportunity. India needs a transformation agenda that will propel it to a high growth trajectory. This challenge can be met if opportunities are widely distributed and India's demographic dividend and entrepreneurial spirit combined effectively.
This podcast series will discuss an outline. That strategic policy, the legal framework and the regulatory pivots essential for refining India's growth agenda for 2047. Joining us today is Amit Kapoor, Joint Managing Partner at JSA. Amit is a pivotal figure in India's legal landscape. With over three decades of experience, he specializes in infrastructure, regulatory and dispute resolution laws, and his profound insights and contributions have significantly shaped policy and reforms and legal frameworks for India.
Joining Amit is Siddharth Shankar, partner at JSA. He specializes in general corporate commercials, mergers and acquisitions, and private equity. He has represented multinational companies in cross border transactions, foreign direct investments, and joint ventures. His extensive experience spans investments in such as food business, pharma, e commerce, FinTech, and IT.
Recognized as thought leaders, we're delighted to have such invaluable guests to begin our series. Gentlemen, welcome to 2047, The India Story. Thank you. Pleasure being here. Thanks Sachin.
Amit, let me start with you. With India's economic growth driven by strong domestic demand and robust investment activity, it is crucial to sustain this momentum through effective policies. In your experience of public policy, how crucial is public policy and regulations? How do they further encourage both domestic and foreign investment to sustain India's economic growth?
And just as a part two of that question, what specific reforms in the national infrastructure pipeline do you think could be implemented to unlock this potential? Thank you. It's I think a very, very critical question for India. We stand at the cusp of where we may move from being a developing, aspiring economy to perhaps a mid level or a developed economy in 25.
And you are now talking of crystal ball yielding for the next 23 years. The most important thing to focus, there are four factors of production in any economy in the world. It's capital, it's land, it's labor, and it's innovation and technology. Entire policy framework has to look at how to harness these four.
So first and foremost, we need to play to our strength. And that requires us to harness our human capital. We can very quickly convert our so called demographic dividend into a liability. And the incentive that is in our way is to transition our people into talent which will be able to work with climate change, to build resilient infrastructure, to be able to harness the digital technology.
Now that platform which has changed has not seeped down to the common man. That's a huge opportunity. Uh, while much of Europe China and other countries are slowing down in a, we have a young, vibrant population. Employment is a challenge today. We could convert that challenge into that positive energy to unleash growth.
That's one most important. The platform that gives you that growth is more MSME and startups and the whole innovation platform, which we need to capture. Interestingly, you would see that the government of India tried very hard by giving tax breaks to the corporates. But last two years, we haven't seen the investment coming back from the private sector.
So you have in the economic surveys and the budgets, the prime minister, also the finance minister and your chief economic advisor, uh, harking to the private sector to start investing. But private sector will not invest until they see there is demand. And demand is based on employment and money in the pocket.
Now, India is 70 to 75 percent predicated on domestic demand. This circle has to be completed. And therefore, we need to start very quickly in re equipping and re energizing our people, the youngsters coming out of colleges. very much. to deploy them into these growth areas. And you will see a huge change.
And the last thing in this, uh, aspect is, as we move down the path of climate change, we cannot forget that it will impact at least 9 to 10 states moment you start reducing your coal consumption. Those 9 to 10 states and the communities around them are built around the coal economy. Are we looking at the next 15 years of phase out of coal who simultaneously steadily refitting them, And making those communities vibrant and viable.
Or will we have nine or 10 ghost town states? Those are things that we should be worried about. And I personally think that these are great opportunity. The moment you are able to unleash public private partnerships, which means you have to remove some of the barriers that stand in the way. The moment you are able to resolve disputes very quickly in a business like manner, where the public sector and the private sector don't keep looking at each other as enemies.
But start looking at working together to try and develop and unleash something for the citizens. I think you'll see a change. And our problem is that largely all of these segments are getting to be self seeking. So they need to look back at the fact that under the constitutional area, article 39 provides guidance for all governments.
All resources of the country are held by the government as a trustee of the citizen. They are not to be monopolized. They have to be utilized for the maximum well being of the maximum number. You keep that in focus, you go ahead and grow. People can make profits at the back of it, so long as the citizen and the common man get something out of it.
If those principles are kept in mind, that's why I said, fundamental basics can unleash tremendous growth. Because the growth potential of the country is very high, unlike the rest of the world. We are 70 to 80 percent driven by domestic demand. And there is no reason to believe that if you put money in their pocket in employment, this economy will not zoom.
But we should be careful. We are growing at 6. 5. If we have to achieve our ambitions by 2047, we are talking a growth path of at least 8 to 10%. And 8 percent is not so easily done for 23 years. But we can't emanate China. There are different scenarios. I want to ask a quick 30 second follow up on that because you mentioned two or three keywords.
One is, of course, the demographic dividend. The second is domestic demand. The third is the problem of unemployment that we are facing currently in the country. If we have to reach realistically at any level that we are thinking of reaching now, the manufacturing sector needs to be at the center of all of this.
And this is something that needs not only incentives, but a little bit of a boost, isn't it? Well, I'll step away a little bit. Not just manufacturing. We did not succeed in persuading the farming community to come along for agricultural reforms. No doubt there were four or five problems that could have been addressed.
But if we are able to move forward in a more collaborative. informed decision making with the farming community, we move out of the MSP phase of life and get on to unleashing tremendous growth in agriculture. That's right. And agriculture is a drag. It employs nearly 50 percent of the population and yet is seen as subsidized.
Just imagine if you weren't able to turn it to a profitable venture. It'll change everything. The pressure on eight cities. Rather than having 800 districts of the country, vibrant, at least the tier two level. Similarly, manufacturing, as you rightly said, as we move forward on climate change and you change to adapting new technologies, you will need to ensure that they get the right finance.
They get access to the market. We are able to incentivize our pension and insurance funds to understand that if the Indian regulators and pension insurance people are not going to take risk on India and invest in India, then who will Canadians are coming in investing, but our insurance and pension regulators are not.
So I think there is a slew of things that need to be done, but without a doubt, and particularly MSME, if you talk about manufacturing, I'm not talking only about big manufacturing. It's the MSME that employs 90 percent of the unstated people. That to my mind is the key.
Which brings me to Shar because taking off from what Amit said, um, despite steady GDP growths, India has faced the challenge of Joli. Uh, we've seen forget the Covid year when we dropped minus 23%, but the fact is that we've been. going at least six and a half to 7 percent since then and prior to that with that substantial employment generation still lagging behind.
I want to understand from you from what legal and policy measures are needed for this to happen to address the unemployment issue or at a macro level. And where do we go from here in 2024 to a reasonably developed economy state in 2047? Thanks, Arjun for this question and You know, it's not only India that is dealing with this question.
I think many major economies are looking at this, but the unemployment. So if I had to look at this from a perspective of what needs to be done, I think I'll start with the key thing, which is labor reforms. Now we know the labor code has still not seen the light of the day. The labor compliances. The burden has to be eased out, Sachin.
Unless that is not eased out, the corporate houses will always find it difficult, uh, to come in. And these are one of those factors that always play a role of compliances. Has to be eased out. Hiring and firing has to be eased out. I'm not saying that the protection of the workforce should be there, but this should be, again, simplifying of the regulatory regime when it comes to the epilogue.
Now, very similar to what Amit said, I have a very similar view on MSMEs, the strengthening of the MSMEs. Now, let's not forget, MSMEs are the, are the backbone and are vital to the demand and supply chain of India today. They play a very major role in the overall system. How do we incentivize MSMEs becomes the most important thing.
How do we incentivize has to be looked at not only from incentivization, but also labor reforms coming in. How do we ease their compliance? How do we make sure that the regulatory compliances are easier for them to comply with so that they can add to the business? Uh, tax incentives, credit lines. Now you look at, in your article, uh, of today only, You compare China, Vietnam, and India.
China is giving credit to SMEs and MSMEs at 4 to 5%. Vietnam is giving at 8 to 9. India is 9, 10 and above. Now that has to be eased out. When I talk about strengthening of MSMEs, you can't forget startups. They play a major role in this entire ecosystem. Entrepreneurship. They create a lot of job opportunities and therefore they need to be incentivized in this entire mechanism.
For me, one of the major things is PPP model, which again, Amit spoke about. Now there has to be a PPP model, which deals with skill development, a public private partnership in school development, where the government provides the financing and the infrastructure, but the private houses, what do they do?
They provide the curriculum and they provide the training. Now that plays a very important role in the overall development, what it does. There have been some initiated. They have been, but is it enough to be there? I, well, that's a moot point, but still needs to be done. Now, very interesting thing. If you look at surveys that have been done.
Most of the employment today of the, of the, of the people who want to be employed, they're not employable. Now, why are they not employable? Because they're not training done. They should be a skill development fund where the government provides the, uh, the infrastructure and, and the financier where the private sector provides them the training.
Now, the skill development fund is used to train people so they become employable. And we are gonna talk more about AI and how skill development funds and others can play a role. But these are factors that play and come into the role. And my last bit is of GCC, is Global Capability Centers. Now you have to see some of the large conglomerates looking at coming into India.
It's foot in the door. It's, we call it the foot in the door, where we look at the brains of India going overseas. We're looking at them being here and they coming up and setting up centers. Now, how do we do that? All of those factors play a role, your tax incentives, your credit lines, making it easier and from a regulatory regime.
I believe some of these factors could play a very major role in the employability, uh, being there for our country for times too.
Amit, I want to take up on some important points you made in the previous follow up question on manufacturing. India's manufacturing sector is crucial. There is no doubt about that. The government recognizes it, the private sector recognizes it. It is also crucial for reducing India's import dependence and for boosting exports, which means you have to provide incentives to the local manufacturers and startups, et cetera.
And these are really crucial matters that we need to take care of if we have to go on that trajectory that we speak about. In what ways can India enhance its manufacturing capabilities? I want to take on the, you know, the answer that you gave earlier, but I want to just ask you to expand on that, uh, to reduce this particular different dependence.
And also, can you highlight some regulatory changes, uh, that are essential now to improve this, um, ease of doing business? Especially for SMEs. Swati, these things are important. Exports inherently is a part of the global village. Now you're not talking about what you'll do within your borders and things of the world.
CBAM is one reality. You already have a cross border adjustment mechanism looking at us. Indian manufacturing will have to, in some of the leading industries like cement, steel, etc. Six of them notified. From 2026 face that barrier. That barrier has come in the name of the fact that that we are not necessarily compliant with the climate norms in terms of emission standards, and they want to ensure that you will have to be, which basically in effect means that while we have the rough end of the stick in terms of the fact that developed world, far lesser in population, has occupied 90 percent of the carbon space, we are supposed to grow and yet carry the burden of that growth while they have reneged effectively from their obligation since 2015 to make a hundred billion dollars available every year.
Besides technology, it's only this year that they've woken up. So you have to now work around your frameworks. India is at a strong position because of tactical and strategic reasons. Whether you talk about Quad, ITU2 or the current scenario, the ability to talk to Russia, while simultaneously working with the USA and Australia is a unique strength we have.
We have to use that more effectively. I think our external affairs minister has done a brilliant job along with the prime minister. We need to make sure that our FTAs are signed. We've been negotiating them far too long. We need to get on to making the critical path of, uh, our EXIM changes and, uh, move against the trade blocks and hurdles.
Now that's so far as exports are concerned. The second factor which is equally important, which people don't realize, only day before I was, uh, in a conference where we were discussing as authors in a book coming out on energy transition for India. And a fact which came out of data, the total installed power generation capacity in India has at least 25 percent headroom in terms of reducing their inefficiencies.
If you cut back 25 percent of the fixed cost, you reduce the gross subsidy burden on the industry. Today, the industry is carrying burdens of the nature which is unbelievable. Power is available in certain states at 2 rupees, 2 rupees 50 a unit. But by the time you get to a state like Karnataka, You have a barrier within the country of five to six rupees, which is cross subsidy surcharge, additional surcharge, point of connection charges, standby charges, and others.
What you do as a consequences, rather than allow the industry to get power at two rupees, two rupees fifty, it becomes nine and ten. They can't compete in the world, particularly if you are aluminum and steel. Aluminum and rolling mills, sixty to seventy percent of the output is pure power cost. So you need to make sure that your input costs are cut back.
The flag is taken out. We have to move out of the freebie culture. There is only a certain amount that you can put on the field, but that has to be for people who can't afford. If you're going to keep saddling the industry and the commercial world with a burden of inefficiency, then we are not doing the service that we need.
At the end of the day, the bottom line will remain whether the government and the private sector looks at RK Lakshman's common man as the focus of all effort. Policy has to be driven to achieve that welfare of the citizen. I have no problem in private capital coming and making money. Again, we have to be rational about money.
For example, I have never understood, I have asked many a bankers, many an economist, that why is it that cost of finance in India is at 12 percent while in UK and US and Europe, it's 1%. That 11 percent burden kills them. On top, you have easy delays in terms of construction phase that loads the cost further.
By the time you come out with the freebies added, you've completely decimated the industry to compete with the world. So what entrepreneurs are doing is not adding value. They're actually dealing with the daily operational headaches of all of these issues. They are writing checks for the inefficiencies of the public sector, which has to go.
Partnership of the public and private cannot be the time to load everything on the private. Partnership was so genuine. Largely the PPV model came into trouble because 2000 or 98 to 2011, 12, we built up a huge pipeline. But every problem that came in implementation, the public sector would say, not my problem, it's yours.
That's not partnership. You have to work with contract management. It's a recognized fact in the world. Always long term contracts have inherent, unprecedented, and unexplained risks. You can't factor it in any contract. So you have to be nimble footed in resolving problems. You have to be nimble footed because cost of time is very high, and that comes as a burden on the economy.
Because unless we are able to resolve things in a timely manner, and move our production bases to genuinely give outcomes which are economically successful for the citizen, and then have the impact in the economy, It won't work. It is going to get cornered by a few, which will not have the snowball effect that you want.
You won't have 1. 4 billion in it. You know, you will have 10, 20, 50 business houses. That won't work. We need to change that paradigm. No difficulty in big capital getting, uh, top line of it. But you need to dissipate a certain amount of growth, opportunity, education, skill development. And all the other levers which will take us in that direction, that, that.
Given your experience in infrastructure for now more than three decades, I want to understand from you how crucial is the public discourse on infrastructure? Why, why is it so important to bring infrastructure into the national mainstream discourse, one. Two, the deficit of infrastructure that we are facing right now is also a hindrance to our economic growth.
And this has been addressed by several prime ministers before finance ministers before, and yet we've not been able to find that, for lack of a better phrase, the Holy Grail, so to speak, to to tackle these, these issues head on. We've been having piecemeal projects everywhere, but a holistic overhaul. of the infrastructure policy regime is something that you've been working on for quite a while now.
So I want to understand from you how, one, how crucial are these policy reforms for India's growth and the 2047, uh, uh, target? And the second part is, uh, if India has to meet the, the four and a half trillion dollar, uh, investment target, where do we go from here and how do we do it? I think, uh, we need to cut it down into two or three things.
One is, uh, as I told you, axiomatic evidence, and this is evidence published, so it's not my statement. Uh, we have, we are losing a rupee per unit of luxury supply across the country. Then we load that inefficient cost onto people who are either IPPs, or they're manufacturing uh, Uh, entities or they are commercial entity, which means they become uncompetitive who pays the cost of it.
Citizen again, look at the fact that when we are looking at the whole vibrance and the growth, when we announced the NIP, we talked about 1. 3 trillion, we've largely succeeded there, but have we actually got private capital? Can it continue like this? Not at all. What do we need to do? We need to create an environment where anybody who comes in to implement the project.
has access to quick knowledge of data, which is reliable. We don't have data reliable today. I think, uh, the second area where you need to do is that the entire administrative process in terms of approvals, uh, acquisition of land, land conversion, clearances, unlocking the landmines that are lying with PSUs in the hub of the cities and industrial values.
ought to be given out. Monetize it. If you want the regime to be there and the regiment of the armed forces there, please take them out of the city. They don't need to be in the hub. Railways doesn't have to have hundreds of acres of land in Delhi and Bombay. You can take that away. So if you were to do all that and start looking at it from the point of view of the country, rather than each entity, each enterprise trying to hold on to its strength, we'll have a different approach.
But for that, you need to have siloized approach to go away. Even today, each ministry is siloed itself. Would it not be wonderful if you had one cabinet minister, senior level person, who is in charge for transport and logistics? Under whom, whether it was airways, highways, roadways, railways, uh, your, uh, waterways, everything is covered by state ministers and they integrate.
It can't be driven by five people on the top in a country so big. True. That's one issue. The last issue I would say is, we also need to understand that disputes are not the best thing to have. I'm a litigator, but I'm saying so to you, that if you can resolve disputes in a timely manner, anticipating a problem, creating institutions and mechanisms by which you have a quick solution to any problem, you'll unlock value.
Because in India, every year's DNA comes at a huge cost to the economy. And at the end of the day, we become uncompetitive. So how are we achieving any good things? Those to me, to my mind, are a few things that could be done. And finally, governance must be always. informed, therefore value verifiable data, unbiased, accountable, and they must be held to account.
Enforcement of contracts, timely decision making, and payment in time are becoming barriers for us to be able to genuinely attract the investment that we'd like to see.
At the same time, at the same time, Siddharth, there are, there is very little discourse, like we had this chat with Amit right now, on improving healthcare, education, because these are. Fundamental to any country's growth, they're necessary for the citizens to, to, to thrive. And yet we have consistently either reduced these, the share of, uh, you know, budgetary allocation for education and healthcare, or we've driven our policy towards more subsidies rather than creating value for our, our citizens.
So I wanted to understand from you, what are the policy interventions that are required for improving healthcare access? across India. We know that there are several government hospitals and tertiary hospitals, etc. But we never equate Those hospitals with great quality care that is needed for India's rising population.
So at the same time, how can education system be reformed to produce a workforce at a scale? Because in the previous answer, you had spoken about how people are unemployable. Yeah. And part of the problem is the, the education system reforms that are needed. Training is lacking. Please. So therefore, that question was more on the skill development fund and how we can make them employable.
Because. The corporate sectors have to provide training and the, the infrastructure and the financing was to be provided by the government, so it went in very well. But similarly on healthcare and education and such, and I think, again, the question pivots around the most fundamental issues, which is vital to the growth of this economy.
And I think from a healthcare perspective, even in the recent budget, which was, uh, introduced in the parliament, not much was done in the healthcare sector. Now, from a perspective of what can be done in the healthcare sector is the sustainability, for example. Now, we have sustainability guidelines, uh, which should be issued for the healthcare sector.
Now, the draft guidelines are out, but we still haven't seen the guidelines to look at how sustainability really works. We are looking at industrial corridors. Similarly, the healthcare parks needs to be incentivized in the same way I spoke about it earlier. The industrial parks need to be incentivized.
Regulatory regime has to be improved. Similarly for healthcare parks, it needs to be done. We want to look at a sandbox. We look at stringent strand box mechanism to incentivize healthcare ecosystem and healthcare startups. Now that is one of the most crucial things. for healthcare startups to come up.
Unless we do that, you will not see some of those things that are important for healthcare to be the next big thing, which is happening. We're looking at PPP We're looking at how we can do, some model needs to come out where center state along with the private sector come out with far more, uh, you know, hospital chains, medical centers, in the tier 2, tier 3 villages, those areas, and I've said this in several other forums as well, that That has to be a model has to come out where more incentivization needs to be done between the center, between the state and the public and the private so that more incentivization, more hospitals.
Uh, needs to be brought in. Now, the healthcare is governed more, both by the center and the state. So hence, this becomes an important aspect. Healthcare is one part, education, as I said, is a pivotal, uh, infrastructure point where we need to look at skill development. Uh, we need to make sure that the training happens at all levels.
The employability is a big issue. One more thing I forgot to mention in the healthcare is the AI. And let's not forget that AI is going to play a very major role in times to come. Are we training our healthcare professionals to be able to use AI to effectively capitalize on what has to be done in the healthcare system?
Is there enough training being done to use the AI which has to be done with respect to the usage of the, uh, in the healthcare system? Now, these are factors that need to play an important role as we go along. Because overall, this plays an important aspect. Coming back to education, which I, which I was mentioning, skill development plays an important role.
We need to skill our labor. We need to train our labor. And that's where the overall education system has to come into play. One of the things which I wanted to bring up is the, the integrating of the skill based learning into the curriculum is essential. Focusing on practical skills relevant to industry needs, particularly in science, technology, engineering, and math, and, and mathematics STEM.
And that is something which is clearly pending. I believe some of these promoting will really help. And then last bit from my perspective, and as JSAV being. Uh, fortunate enough to do some of the largest deals in this space is the e learning. Now we're seeing e learning digital space education is something that has to be incentivized.
Now, uh, when you call laptops or internet, all these facilities have to be provided. Uh, digital platforms have to be created. incentivizations have to be done so that more and more people through the e learning can learn and get skilled. I think that's the way we believe that the employability, uh, and the education linked to that can help in the overall growth of the country.
Effective governance and strong institutions, um, are the backbone of any developed economy. And you've been talking about this in your papers, in your writing, in your speeches, in different forums for many decades now. So Uh, it is established wisdom. The ensuring of proper implementation is something that we lack, perhaps.
What are the steps that need to be taken to enhance the transparency, reduce corruption and rent seeking? Uh, where do we go from here if we have to achieve the 2047 target? Could you state how regulatory bodies can be strengthened for better implementation of laws and policies? Sure. I think, first and foremost, we have some success stories, which we should learn from.
The way the Jam Trinity was implemented in India. We don't forget that not so long ago, a few decades back, Rajiv Gandhi as the Prime Minister had lamented about the fact that out of a hundred rupees put in the public, uh, distribution system, 80 or 85 gets lost. Today, with a direct benefit transfer, there's no human intervention.
Now, we are actually one of the key economies in the world. Which is doing so much of the development of digital platform. Don't we do that for everything? So learning from how we scaled up should be taken as I said, in the last answer, number two, unless you have verifiable hard data, it will always be your opinion versus mine.
We need to look back and get verifiable data back again. Some amount of trouble in terms of people are feeling offended, being put down and therefore data kind of faded. I think we need to be robust about it. India has come to be the fifth largest economy. We want to be the third largest, we are on the way, but we want to be the third largest, which is going to distribute it across the borders and give buoyance to people.
If you're doing that, you cannot have the world engage with you if you still don't have verifiable data. So you have to accept it as a reality and move forward, not worry about it. And I think we have had some fantastic economists in the government, sitting in the statistical commission and otherwise, who have the wherewithal to do it, provided we put our shoulder to it.
Third, equally important, we need to have a very strong interface between the center state. This is the governance side of it. Avinash Dixit, a famous economist, again an Indian, wrote a book on lawlessness and economics. And that was all about when rule of law institutions start failing. Alternate mechanisms which are sub optimal develop, which are built on relationship and influence, arbitrations and other mechanisms, but they don't give you the optimal solution.
They're sub par. We need to understand we don't want sub par. We actually want to go beyond what is par for the course. And therefore, we need to reinvent ourselves, particularly when we've done successfully. We use a crude term, we don't need to go beyond the jugard. Yes, yes. Yeah, yeah. And, and, and I would think that that is for the reason, let's take another example.
So India implemented a perform, absorb, and trade scheme, the PAT scheme. This was climate change oriented. You were going to perform on your targets, reduce your carbon emissions, and then trade on carbon credits. 2008 10 conception, 2012 implementation, did well in several senses, failed in several others.
We were very unambitious in terms of our targets. We never enforced any mechanism of regulation. What is regulation ultimately? You tell a set of people in a particular industry to behave in a particular manner, with certain outcomes. But if you don't verify, on a red light, if there's no cop seeing it, whether you're jumping the red light or not, after a stage, some smart Alex will jump.
cause accidents and run away. And then it becomes a routine. And somebody else says, I'm sitting like an idiot. I'll also go ahead. So you need to have effective communication of goals, monitoring of performance and enforcement. We have failed on enforcement when it came to the PAD scheme. We can learn from that and learn from the Jamf Trinity to say, where do we want to improve?
And how do we go about it? If verifiable data is there, my performance is checked against that. I know what I need to do. My performance is evaluated. If I overperform, I'm rewarded. If I underperform, I'm punished. My incentives are stacked, and I'll behave accordingly. Unless I'm willing to brazenly violate, then I must be penalized.
So, broadly, regulation is nothing but signals to nudge behavior in one or the other manner. That's not rocket science. But what you need is people who are staffed in the regulatory mechanism, who are independent. Therefore, you pick the best in class. We have a Preponderance of only picking public sector and government enterprise.
Nobody's saying they're bad, but nobody says academicians and private sector are bad either. So pick the best, give them the right parts, hold them to account. The second and third we fail. Often staffing we fail. So you get the right skills on the table. Give them appeal to a field to work on with your objective ideas.
and then assess their performance. If you do that, you have a different play. If you leave them open charter with a bunch of money and not look at what they're doing, you will have problems. Similarly, if you don't give them budgets, they may not be able to perform their job. So regulatory institutions actually are nothing but a mechanism where you try and take a bit of distance from political economy, which is driven by other things than economics and ensure that in the economic activity, you allow people to perform on economic principles.
Those who perform well will be rewarded, those who don't will suffer. And somebody who is incapable of performing because of inherent challenges may be supported. I still remember Ronnie Reagan used to say, Ronald Reagan, the U. S. president, he had, he had a mantra 101 economics and he used to say that, uh, If it, uh, moves, they tax it.
If it stops moving, they regulate it. And if it falls down, they subsidize it. Now, that cannot be the If you want to grow, then you need to grow in vibrance. Uh, we are in deficit financing. We are covering up by allocations from left right to center. We are not looking at agriculture as a vibrant mechanism for growth.
We are looking at realities of the economics in silos. But this is a continuum. You nudge agriculture, You will stop having migration to the, uh, industry and to the urban centers. You'll reduce that pressure and you'll have vibrant villages. You'll have economic growth that you have not thought of. And you'll have money that's coming in where you're actually being given subsidy.
Now that will impact all sides. It'll have impact manufacturing, it'll impact logistics. You create a whole value chain around it. You regulate performance of people. You have a different play. So I think regulation by itself is not it. The end game has to be again, as I said, is the economic well being of the country and maximizing welfare.
You keep that in mind whether you're making policy or regulating, and accountability cannot be looked away. Our problem has been that often we have not enforced. And if we don't enforce, the signals go wrong. With that response, Amit, you've actually laid the foundation for the next few episodes, I think.
Thank you so much, gentlemen, Siddharth and Amit, for joining me here at the JSA Mint Partnership for the India Transformation Agenda Series. Thank you so much to our guests for providing such detail and solution oriented answers. India's growth is undeniable. We may face challenges and change may take persistence and hard work, but India is on a transformative path and to become a developed nation.
Stay tuned as we dig deeper in the upcoming episodes. This episode is now out on HT Smartcast, Mint's YouTube premium channel, and all other audio streaming platforms.