Thursday, March 13, 2014

Utopia: The economic solution-IV

Thought for the day
“Fame has also this great drawback, that if we pursue it, we must direct our lives so as to please the fancy of men.”
-          Baruch Spinoza (Dutch, 1632-1677)
Word for the day
Fervent (adj)
Having or showing great warmth or intensity of spirit, feeling, enthusiasm, etc.; ardent.
(Source: Dictionary.com)
Teaser for the day
Disappearance of Malaysian aircraft highlights at least three things – (a) There are still many things that are not under US NSA watch; (b) possibilities of another 9/11 are not dead despite Osama’s elimination and (c) St. Google does not answer all your questions.

Utopia: The economic solution-IV

Focus on strengths
At the risk of sounding irritatingly repetitive, I would like reiterate that in past 6 decades we have focused too much on our weaknesses and tried hard to overcome by importing technology, energy, intellectual property, capital and consumption patterns. The root cause of many economic problems, e.g., current account deficit, fiscal deficit, energy deficiency, excessive dependence on external IPR & capital flows, etc. could be traced to this misplaced focus.
In my view, just by focusing on our intrinsic strengths, we can not only conveniently reverse the flow of trade to pre British era but also be successful in achieving our secular goals of sustainable and faster economic growth.
I have been suggesting that, for example, by implementing the following programs could improve the balance of payment substantially and structurally by 2025 by focusing on our intrinsic strengths like abundant sun shine, large number of middle class youth, amazing landscape, strong and rich tradition & culture:
(a)   Energy deficiency had been one of the primary reasons for India’s fiscal and trade deficits. Failure in implementing an integrated energy policy has been a major failure of policy making. It is widely recognized that “roof top solar panel” has the potential greater than the one seen in mobile telephoney in past one decade. Reducing energy intensity of water and developing a world class public transport infrastructure on priority basis, especially in tier II and III cities, and strict legal enforcement of energy efficiency should be considered.
(b)   Indians spend approx USD25bn annually on education and related overseas travel. Creating 5 Special Education Zones (SEZ) with liberal VISA, forex, taxation and real estate ownership rules, and allowing foreign institutions to freely set up campuses could reverse this flow. Students from India, far-east, middle-east and Africa who find it difficult to get VISA for US/UK etc. or find that expensive could also benefit from this. Our politicians have spoken about recreating Nalanda and Takshila. This in my view is the easiest way to do that.
(c)   India holds tremendous potential for tourism. However lack of proper infrastructure had traditionally constricted the growth of this sector. On the other hand Indian outbound tourists flow is rising. Developing some world class self contained international tourism centers, e.g., on lines of Macau, Disney, Las Vegas, etc. with liberal VISA, Forex, taxation and real estate ownership rules could reverse these flows.
(d)   Vindavan, Tirupati, Varanasi, Gaya, etc. all have potential to be as desirable, venerable and popular destinations as Mecca, Vatican and Jerusalem. Converting these centers of Indian religion and culture into self contained special zones with international airport and annual event calendar could get substantial forex revenue.
These projects also have the potential to generate large scale productive employment opportunity for local talent, besides contributing to economic growth and true globalization of Indian economy.
Readers can send their views, comments, criticism to the author at vijaygaba.investrekk@gmail.com
Earlier in this series:

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