It has been nearly two decades since the economic reforms were rolled out in India. The liberalization process helped India Inc by doing away with a large part of the red-tape that had existed in early 1990s. The reforms have made several changes in India's corporate landscape.
The reforms have effectively helped increase private sector participation in the country. This in turn has contributed hugely to growth, savings as well as investments in the country. The entry of foreign companies has actually helped India Inc in improving their own standards. The Indian companies were forced to compete with the more professionally managed global peers and match their quality. The result is what we see today. The Indian companies incorporated the best practices and improvised upon them. As a result, many are global leaders in their own fields.
Now the bigger question for India Inc is what next?
The reforms that had started in 1991, have helped them to get this far. But can the same continue in the future? Or is there something additional that is required?
The answer is the latter. The something additional that is required is further economic reforms. And these reforms are not just at the level of import duties and taxes but have to take into the net broader issues. These issues include labour laws, land acquisition, taxation. Currently, the labour laws in the country are so rigid that they are deterring foreign investment rather than attracting it. Troubles related to land acquisition do not help India's case as an investment destination. There are new stories and issues that are highlighted almost every day. And the age old debate on tax still continues.
What India Inc needs now is for the government to wake up and look at these reforms more seriously. Only then will it be able to embark upon the next phase of growth. And when that happens, then India too would see its economic growth come back to the high digits that we seen in the recent past.