Shyam Ponappa, New Delhi
Business Standard

We must try to get these few major goals right in India, apart from a systematic policy framework for basic infrastructure (and systematic approaches to everything, including a simple, low-tax regime):

Low long-term interest rates: Imagine this scenario: a long spell of low interest rates, initiating a period of domestic expansion with sizeable construction and property development for a decade or more. With low interest rates, this could happen in India.

Imagine the corporate champions that could grow exponentially, as companies build their game locally, then expand globally … in banking and financial services, telecommunications, energy, metals, construction, textiles, automotive products, manufacturing, chemicals, leather and fashion … “swashbuckling their way around the world in search of booty”, as the Economist puts it.

Wishful thinking? Not entirely. This is what happened in Spain, more or less, over the last 14 years.

I have taken some liberties, grafting elements of what-might-be for India on to what-has-happened for Spain: Santander in banking, Metrovacesa in property—a subsidiary acquired HSBC’s Canary Wharf headquarters in Britain’s biggest property deal, Ferrovial in construction, Mango and Zara in fashion.

India’s special circumstance is that it is entering a phase of manufacturing competence. Manufacturing could be a growth engine if we got basic infrastructure (power, transportation and communications at least, with basic education, healthcare and sanitation, then access to distance education & training …).

This may be fanciful, as we display little comprehension of the need for an integrated policy framework, but if it happens, add manufacturing to India’s potential for growth and employment.
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  • Good one..

    this is good one... ;)

    There there is a serious point here.. china also focused a lot in building their infrastructure and that acted in a big way in the growth of their manufacturing sector.

    Either low interest rate, or more FDI for sure, development is inevitable!