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Business News/ Opinion / Online-views/  Resetting India’s mindset

Resetting India’s mindset

If all holds altogether, then 2016 should be that benchmark year when the nation embarks on yet another makeover

The emerging India, based on burgeoning aspirations, again inspired by rampant consumerism, will indeed be far more challenging. Photo: BloombergPremium
The emerging India, based on burgeoning aspirations, again inspired by rampant consumerism, will indeed be far more challenging. Photo: Bloomberg

In 1983, the first Maruti 800, the so-called people’s car, rolled off the production line at a factory in Gurgaon, on the outskirts of Delhi. It changed the way Indians drove. The little car, which has been since been discontinued, actually did better: it kicked off an incredible makeover of the nation’s mindset. Probably first in the ‘Make in India’ mould, the project proved that India can. In the three decades and more since, the Maruti experiment became the metaphor for the fundamental transformation of India. It was also the starting point from which Millennium City (Gurgaon) was launched.

Thirty-two years later, once again, the country is in the midst of yet another radical overhaul of its mindset—something very difficult to realize when we are in the middle of it. If all holds altogether, then 2016 should be that benchmark year, when the nation resets its mindset once again.

Why so?

This is because the current transformation is not restricted to the business economy alone, but extends to the polity, too—think of the emergence of the Aam Aadmi Party (AAP), the hottest political start-up in the country, and the ascendance of the Bharatiya Janata Party (BJP) as the new pole of Indian politics. This coming together of economic and political change—inspired to a large degree by the demographic shift, wherein 65% of India’s population is less than 35 years old, and the powerful force of technology-based disruption—is changing the country like never before.

The emerging India, based on burgeoning aspirations, again inspired by rampant consumerism, will indeed be far more challenging. But the promise of a billion people joining the marketplace creates unprecedented opportunity, outweighing the downsides. Yes, there will be development challenges, like growing inequality, but never before has India witnessed a scenario that is so conducive to upward social mobility—so visible in the rapid evolution of the start-up economy.

In short, there is today an enabling environment. To cite a few: connectivity by road, rail and air is far superior than it was at the turn of the millennium; Internet and telephone bandwidth, though not up to the highest standards, still makes India feel like First World when compared with the dial-up era; and, of course, the financial sector is so fundamentally transformed with the hegemony of the traditional banks now under siege as a mobile-based economy begins to rapidly take root.

If this is the back-end, the front-end, too, is altering, given the changing profile of customers. The move to create payments banks, which are essentially private deposit-taking small banks using mobile phone-based technology to lower costs, will make it easier to include low-income households in the ecosystem of the financial sector.

It is indeed the Uber moment in Indian banking, especially as payments banks, given their low-cost business model, piggy-back on traditional banks to extend their reach to customers outside the purview of the financial sector.

In a recent interview to Mint, Microsoft founder Bill Gates, now variously described as a technologist, business leader and philanthropist, signalled that his foundation is betting that 2016 will be the year of financial inclusion in India and is accordingly recalibrating its priorities. “I don’t know for sure, but it is very likely that things go well next year. But if not, we are patient; we think the idea is worth to continue trying till we get it right. We think it is very beneficial that the way to have really good financial services that include poor people is to have the efficiency of the digital back end."

Alongside, what we are witnessing is a transition to a transactional society. Something that comes without the personal apron strings we are used to in our culture of kirana stores, or neighbourhood grocers. The introduction of the ATM was the first step in this direction, which ended the time-consuming interface with the bank teller. The growth of impersonal e-commerce is another. Now mobile banking—including the next-in-line peer-to-peer banking—will take this transactional behaviour to another level altogether.

Public transport is another example. As opposed to the past when a ride in a bus inevitably meant striking relationships/conversations with strangers, now travel, say in a Metro, is a journey in solitude. We jostle with far more co-travellers today, but engage so little. Sociologists may frown on this anti-social behaviour, but it is yet another manifestation of the emerging transactional society.

And this will be the lynchpin of a rules-based society, which eschews discretion. The introduction of the Aadhaar unique identity number was one significant initiative which spurred this transition. Its use in plugging leakages in the delivery of welfare benefits and introducing direct benefits transfers has followed a clinical approach—exactly why it has not blown up politically on the National Democratic Alliance (NDA).

The next big step, if the Congress party can overcome its urge for revenge politics, is the single goods and services tax (GST) regime. It is touted as the single biggest tax reform for a reason. Very simply, it will economically unify the country, an idea which many of us fail to comprehend. Even better, it will put in place a rules-based regime and an audit trail, which will bring unprecedented transparency to business transactions. Part of the reason for the delay in implementing GST is that those who favour status quo fear the radical change on the anvil. It is then clear that a lot of things are beginning to come together, which portends a radical makeover of the national mindset. Some of this change may be for the good and some not so desirable.

It is my bet, at the least, that once all the nuts and bolts are in place, the next time someone proposes an out of the box anti-pollution strategy or lays out an ambitious 90,000 crore bullet train project connecting Ahmedabad and Mumbai, the popular response will be: Yes, we can.

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Published: 31 Dec 2015, 09:47 PM IST
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