India is worried. The country’s rubber and tyre industry is concerned. After achieving envious growth rates for years, the rate slipped to less than 7% this year. Adding to the woes, disturbing signals are emanating from many sectors, despite the country’s strong fundamentals.
High interest rates and inflation are severely impacting India’s economic growth. Though food inflation has come down substantially thanks to good monsoon and better crop, the cost of manufactured products continue to rule high. The high oil prices and the possibility of massive infusion of liquidity in the Euro Zone are likely to fuel inflation at home further. The impact of the Euro Zone crisis, slow growth in the US, poor governance at the Centre, massive corruption, highly inefficient and bleeding public sector units are all hurting India’s growth.
There are silver linings too. India’s farm sector is reporting record production. The corporate profits this year are encouraging. Many of the tyre companies have put up an impressive show which is reflected in their share prices (see page 121). The rupee has recovered substantially. The stock markets too are continuing an upward trend. The new focus on infrastructure development is bound to bring rich dividends soon.
There is a school of thought which strongly believes that if India controls corruption and improves governance and sets right its innumerable public sector enterprises, it will change the face of the Government and industry. Many look upon the Delhi Metro Rail Corporation (DMRC) and its dynamic former Chairman E. Sreedharan as a role model. The Corporation’s amazing performance is an inspiring lesson for all. Though a State undertaking, it could complete its first phase of work in 7 years against the targeted 10 years. Its punctuality rate is one of the highest in the world. Its record on corporate social responsibility too is excellent.
Sreedharan achieved this commendable feat focussing on integrity. He picked up only people known for their integrity and focussed on their talents and professional excellence. Says Sreedharan: “If you are talented, you are in a better position, not just to deliver high-quality results on time, but also be more ethical. It’s the less talented who try to retain their place mostly through corrupt practices.”
The Metro man has shown to all how a Government-owned enterprise can be punctual, efficient, honest, world-class and, at the same time, very profitable! If India’s public sector enterprises follow Sreedharan’s example, it will definitely change the face of the country. The annual growth rate can even exceed 10%!