Innholdsfortegnelse for 16 March 2025 i Business Today

Achieving the vision of Viksit Bharat requires a sustained annual growth rate of 8.5% for the next 22 years, with the initial years demanding a staggering 9%-plus rate, Montek Singh Ahluwalia, a key architect of India’s reforms in the 1990s, tells Surabhi in this 33rd Anniversary Issue of Business Today. Given the current domestic and global economic landscape, how can that come about? The answers are spread across the pages of this issue with top experts and BT reporters weighing in on India’s path to prosperity. As Sajjid Chinoy writes in his essay, India’s playbook to sustain high growth requires several moves, including warding off a trade war with the US and not overly relying on fiscal and monetary policy to boost growth. While many experts call for greater private…

INDIA INC. is often used as a collective noun to describe the formal business sector comprising government-owned and corporate entities. It gained currency around the turn of the century as Indian firms gained scale and made their presence felt at home and abroad. As businesses start to get more complex, companies—both small and large—must revamp their game plan to remain relevant in a world characterised by disruption, say experts. And disruption is not a game determined solely by deep pockets, but ideas and innovation. Clearly, a new India Inc. is emerging at a pace that is quite unprecedented. NO STATUS QUO The mindset that large companies would be around forever has changed, and by the looks of it, will continue to evolve. Ashank Desai, founder, Vice Chairman and Managing Director…

IN HIS MAIDEN press conference as Reserve Bank of India (RBI) Governor in February, Sanjay Malhotra made a remark that hasn’t received the attention it deserves. Conceding that the central bank was not the repository of all knowledge, he said, “Consultation is [a] key pillar of our policymaking. The RBI, whenever it publishes or finalises its regulations or master directions, does do a wide public consultation. This is one thing that I will continue to do so.” Now, Malhotra may have just been reiterating RBI’s position, but he put the spotlight on a significant move of his predecessor Shaktikanta Das, who took consultation into a higher orbit. In May 2023, Das held an interaction with the entire boards of state-run and private banks—a first-of-its-kind initiative. Governance was on top of the agenda,…

WHEN I’M ASKEDin interviews on how to identify areas of excesses or froth in the market, I half flippantly say that the easiest way to do this is to look at areas or themes where thematic new fund offerings (NFOs) are being launched. In the last 18 months, some of the popular themes for NFO launches have been defence, PSUs, industrials, small-cap, etc. Most of these haven’t performed well since their launch, and this is not an aberration. Data studied by First Global shows that thematic funds almost always tend to be launched near the peak of that theme. Even going back over the years, many technology funds, for example, were launched just before the 2000 stock market crash! More recently, in 2021, many Nasdaq or China/Greater China funds were…

INDIA IS ATan inflection point for the next phase of its digital revolution, building on the India Stack to the create Digital Bharat—a vision of transformative and inclusive growth. The India Stack created the foundation for digital transformation by providing digital identity, payments, and banking for all Indians. The next phase will leverage this foundation to create combinatorial innovation—where these foundational elements will be used like LEGO blocks to solve India’s biggest problems at a massive scale. In a recent conversation with Nandan Nilekani, he described how AI is becoming the next great frontier for India. According to Nandan, India can become the global use-case capital for AI, not only in automating tasks but also in amplifying human potential. Unlike the expensive, compute-heavy models built in the West, India is…

Place of Publication: New Delhi Periodicity of its Publication: Fortnightly Printer’s Name: Manoj Sharma Nationality: Indian 1806, Sylvan View-1, Eldeco Utopia, Sector-93, Noida, Gautam Buddha Nagar Uttar Pradesh-201301 Publisher’s Name: Manoj Sharma Nationality: Indian 1806, Sylvan View-1, Eldeco Utopia, Sector-93, Noida, Gautam Buddha Nagar Uttar Pradesh-201301 Editor’s Name: Mr. Siddharth Zarabi Nationality: Indian Address Flat No. E502, Udyog Vihar, CGHS Limited, Plot No. 12, Sector 22, Dwarka, New Delhi - 110075 Names and Addresses of individuals who own the newspaper and partners or shareholders holding more than one percent of the total capital: Owner: M/s. Living Media India Limited, F-26, 1st Floor, Connaught Place, New Delhi – 110 001. Shareholders holding more than one percent of the total capital of the owner company: 1. Mr. Aroon Purie, 6, Palam Marg,…

MONTEK SINGH AHLUWALIA, former Deputy Chairman of the Planning Commission and noted economist, is one of the key architects of economic reforms from the 1980s. He has closely worked on and tracked policies that have fast-tracked economic growth. In an interview with Business Today’s Surabhi, he notes that the 1991 reforms raised longer-term growth about two percentage points above the pre-reforms rate and says we now need a much larger acceleration. India needs deeper reforms and higher investments for this, he says. Edited excerpts: India’s economic growth has been slowing in recent years. What key structural reforms are needed to bring growth back to the 8% trajectory on a sustained basis? The economy is currently growing at 6.4% in FY25, and this is expected to continue. This is not a…

IN 1867, REFORMER Bholanath Chandra wrote, “A widely diffused enterprising spirit is always the antecedent to that widely diffused national prosperity, through which alone can our nation ever hope to occupy a conspicuous position in the eyes of mankind. Such was the state of India once, and such ought to be the state of India again”. We believe India’s enterprising spirit is held back by regulatory cholesterol and are confident that three reforms—decriminalisation, digitisation, and rationalisation—will increase our population of employers with the productivity to pay high wages and take India to its rightful place among prosperous and democratic nations. History suggests that there are no poor people; just people in poor places; most of your wages are determined by where you live (country, state and city) and where you work…

AS THE POST-1991 Indian experience reveals, an open trade and investment environment is indispensable to achieving key economic goals such as GDP growth, external sector stability, and a welfare-enhancing diversified consumption basket. With country-specific endowment constraints in a scenario of complex manufacturing processes and diverse consumer preferences, no country can optimally fulfil all prerequisites for a thriving economy in isolation. Notwithstanding recent reordering, the vertical disintegration of manufacturing across global value chains reflects this. As we saw in pre-reform India, policies that curtail cross-border integration result in inefficiencies, a vitiated investment climate, and stunted domestic capacities by limiting access to the productivity embodied in high-quality imports, and curtailing overseas market access. Why then is the adoption of open trade so controversial and challenging? The answer lies in the fact that…

IT IS A COMMON belief that the repeal of the three farm laws marked the end of agricultural market reforms. The reality is that the reforms are possible and desirable. State governments have all the powers to enact reforms, but very few have shown the willingness to go ahead. What is puzzling is that despite the noise about reforms, even BJ-Pruled states and Union Territories have not found them necessary. A fresh effort in this direction is the draft National Policy Framework on Agricultural Marketing on which the Union Government invited comments in November 2024. One hopes that the guidelines will be dispassionately considered by the state governments. The Centre also needs to deeply engage with states so that suitable amendments to laws are quickly legislated. More importantly, the states need…

OVER THE LAST three decades, the nature of the economic regime in India has undergone an unrecognisable transformation. Business Today, an offspring of liberalisation, launched as it was a year after the economic reforms of 1991, has been a witness to India moving from state socialism to business liberalism, closed economy to an open one, and a controlled economy to a regulated one. The fragmented and protected markets across 14 states and six Union territories in 1956 are now a unified common economic space across 28 states and eight Union Territories. The Indian economy was just about $30 billion in 1951, which is roughly the size of the Jammu & Kashmir economy today. The bigger states like Maharashtra, Tamil Nadu, Karnataka, and Uttar Pradesh have their sights set on becoming…

INDIA, ONEof the world’s youngest equity markets, is set to fuel investors hope, as a virtuous combination of technology, hyper returns and plentiful choices drive the long-term growth potential of stocks and mutual funds. Where will the market be, say 3-5 years from now, in terms of size and heft? Who will be the new players on Dalal Street and what kind of sentiment will prevail in the markets? What are the major changes that one can foresee over the medium term? Business Today attempts a deep dive to predict what lies ahead. Take a peek into the financial future of the world’s fastest growing large economy! Millennials and GenZ will increasingly matter in the scheme of things as they use the latest technological tools to navigate the often-treacherous financial markets.…

OVER THE LAST DECADE, Indian aviation has taken a significant leap. The number of airports has more than doubled—from 74 to nearly 160. Total passenger traffic has grown from around 120 million to over 236 million per annum. Aircraft fleet has doubled from around 400 to over 800 and is likely to cross 1,500 by 2030. In 2024, India’s domestic traffic grew by 6%, the highest in the world after China. India has overtaken Spain and the UK to become the third largest aviation market. With the planned opening of airports at Jewar and Navi Mumbai, and the expansion of major airports nearing completion, the ‘Summer of 2025’ is expected to be memorable. This may have a multiplier effect on associated sub-sectors like cargo, Air Navigation Services (ANS), Maintenance, Repair…

▶ THE LONG, ARDUOUS battle between the Burman family, owners of consumer goods major Dabur India, and the management of Religare Enterprises reads like the plot of a book or TV show. A corporate takeover bid that is opposed by the management, with multiple twists and turns, replete with allegations and counter allegations, and even a rival takeover bid from a foreign investor. The nearly 18-month-long saga since the Burman family made a ₹2,116-crore open offer for 26% of Religare shares to take their holding beyond the 50% mark seems to have come to a conclusion. On February 20, the Burman Group announced it had acquired control of Religare and had been designated as the promoter of the company. The offer was triggered automatically after the Burman family had incrementally…

AT THE TURN of the century, China’s reforms had taken root, and its GDP had grown to $1.2 trillion. India’s reforms started later and so from a similar level as China in 1980 it had grown to $485 billion in 2000. The first decade of the 21st century saw China take-off. It grew from $1.2 trillion to $6.7 trillion or from 3% to more than 10% of global GDP in 10 years. The US, which had brought China into the World Trade Organization and encouraged its firms to shift manufacturing to China, only started to get wary of China by 2015, by when it was clearly the World number 2. China was a key market for German cars, Italian engineering and French Luxury. US President Donald Trump ran on containing…

The only antidote is to double down on structural reform—education, skilling, health, land, labour, and deregulation ANY ASSESSMENTof India’s growth prospects in the coming year must internalise the ominous global backdrop that the economy confronts. Markets are abuzz with the frenetic pace of policy pivots under Trump 2.0. But the pressures imposed by the US on the rest of the world pre-dated the election of Donald Trump as US President. The sheer quantum of the pandemic fiscal stimulus in the US, combined with high levels of immigration in recent years, have powered US output to levels much above its prepandemic path. In contrast, European growth remains stagnant, and China has disappointed. This relative outperformance of the US, alongside the resilience that is making disinflation challenging, is underpinning “US exceptionalism.” This…

INDIA IS CURRENTLY the fastest-growing major economy, and has a vision of becoming ‘Viksit Bharat’ (Developed India) by 2047. To achieve this ambitious goal, it is imperative to tap into the full potential of the female workforce. Women’s participation in economic activity is not just a matter of social equity, but an economic necessity. If harnessed effectively, it could add trillions to India’s GDP, drive innovation, and create a more resilient and sustainable economy. A recent World Bank study states that “gender gaps in labour force participation persist worldwide. Closing this gap can lead to sizeable gains for economies—a 20% increase in GDP per capita, on average”. Encouragingly, data over the past six years shows a positive trend in female workforce participation in the country. Indicators such as increased engagement…

THE FIRST comprehensive tax reform committee was set up in 1991 under the chairmanship of Raja Chelliah. That committee’s goals were to simplify the tax code, lower the rates and improve tax administration. It also addressed the unfair skew in India’s tax system, wherein the indirect to direct tax ratio was 85:15, which had to go much below 50:50. A fair tax system requires that a richer person pays more than a poorer person, and that two persons earning the same income, irrespective of the source, roughly pay the same income tax. The journey toward a fair tax system in India is far from complete. Only 2% of India’s population pays non-zero income tax. But almost everyone is subject to indirect taxes. The indirect to direct tax collection ratio is…

THE PURPOSE OF economic progress must be to improve the lives of human beings while preserving the sustainability of the natural environment that nurtures all life. India’s GDP has been growing well for many years; and may be growing faster than other countries now. However, the pattern of India’s higher growth since 1991 has not served its citizens as well as other countries’ growth has. A comparison reveals that not only have per capita incomes increased less, but, worse, India is a laggard in human development. China and Vietnam did not abandon their ‘socialist’ strategies for development, while India’s policymakers were persuaded to change course to adopt a more ‘liberal capitalist’ model in 1991. The contrast between India and China’s and Vietnam’s progress is stark. China, equally poor 25 years ago,…

ONE MIGHT THINK that the spark that ignited this revolution was ChatGPT in November 2022, but OpenAI’s runaway hit just provided the final kindling to a slow fire that was burning since 1955 when AI (artificial intelligence) was envisaged first in the now famous Dartmouth Conference. The pace of innovation in the last two years since ChatGPT is unmatched—with many powerful LLMs (Large Language Models) from Big Tech firms and start-ups beating humans in some faculties, a Cambrian Explosion of applications running on top of these foundation models bringing AI to workplaces and businesses, and recently the Chinese model DeepSeek upending the costs and resources narrative and promising to democratise AI. The Age of AI is well upon us, and the question is what India should do to leverage it…

BOTH SAURABH AND NANDITA studied economics at a postgraduate level. As they were doing so, they came across a body of literature on the Indian economy that either sees India as a broken economy or as a shining exemplar, a country on the ascent. They do not believe that such polarised accounts do justice to the multifaceted nature of change playing out in 21st century India. To be specific, there are three different dimensions of change that they feel are neglected: Two steps forward, one step back: No free-market democracy moves forward in a linear fashion. Periods of growth are typically followed by periods of hardship. Part of this is due to the economic cycle, wherein periods of expansion typically result in rising inflation, as demand outstrips supply sooner or later.…

WHILE MANY SECTORS have grown by leaps and bounds, a measly 3-4% of Indians travel by air. What ails the industry? Can we make every Indian fly at least once a year by the time we celebrate the 100th year of Independence? We need to think and dream big. And dreams, to be realised, must be combined with flawless and speedy execution and accompanied by deep reforms. Let us trace our own recent trajectory with particular focus on aviation. The reforms that opened up the aviation sector in 1991 by ending the Licence Raj and the monopoly of Indian Airlines and Air India changed the sector. Many private airlines were given licence to fly, but only two—Jet Airways and Sahara—survived, resulting in cartelisation. Again, when low-cost airlines took wings in…