Under the Permit-Licence raj that was at least partially dismantled by then Prime Minister P.V. Narasimha Rao, private monopolies got formed, not as a result of their efficiency but because of their clout with the government, whether state or central or both. Such monopolies imported freely and as a consequence, trade deficits began to rise and a trade surplus by India became a distant memory. Prime Minister Narendra Modi has encouraged start-ups in India, and a watch needs to be maintained to ensure that such start-ups have a favourable atmosphere to grow.
In the past, monopolies created by influence operations involving businesses and governments succeeded in driving away even the most promising of start-ups, so that either they were forced to shut shop or else migrate elsewhere. In the UK, Prime Minister Starmer needs to ensure that billionaires come to the UK from other parts of the world, as was the case in the past. Instead, confiscatory levies have resulted in a flight of capital from the UK to more hospitable shores. He needs to follow the dictum that high tax rates lower rates of compliance and hence generate lower revenue than a less regressive, less repressive tax regime would. Unlike those European countries that are obsessed with keeping out cheap Russian energy and instead, in spending tax receipts on the war in Ukraine, India under Prime Minister Modi is recording relatively high rates of growth. It is welcome that the UK and India have worked out a Free Trade Agreement (FTA) between themselves.
An FTA needs to be balanced and not one-sided, and the India-UK FTA ought to bring a dose of reality into the efforts of the US to get India to sign an FTA that is tilted heavily in favour of the US. Most farmers in the US have as their primary problem the need to stop being overweight, but in the case of India, agriculture is a means of generating produce that can ensure a subsistence diet for tens of millions of citizens. US trade negotiators do not seem to notice, or to care about, the fact that the conditions they are seeking to impose on India could lead even to starvation among some of the underprivileged citizens of the most populous democracy in the world. However, Prime Minister Modi cares about them, and has been firm in his insistence that any FTA needs to be equitable to both sides and not only a single side.
Modi 3.0 is working at speed to ensure that the volume of output meeting his Make in India criterion rises steadily, so that jobs and income can be created. Without a sufficient number of jobs, the demographic dividend of India would be wasted. What PM Modi seeks to do is to make more and more units from outside and domestically Make in India, and eventually a greater and greater share of such units get transformed into Made by India. A revolution in lifestyles is taking place in the country, and is gathering pace.
