India Inc can take care of itself even without the government's overt help. This is not true of the average Indian, says Rashesh Shah.
There is no doubt that the overwhelming expectation from the Narendra Modi-led government is a significant improvement and transformation of the business environment in India - through reforms, progressive policy and removal of glitches in the path of growth and entrepreneurship.
Even now, there is great scrutiny of every pronouncement to better understand his economic agenda and the direction of reforms. Indeed, his image as transformer of Gujarat has positioned him strongly as pro-business and conversely, led to the belief that India Inc would fail to grow without him.
I would say that we seem to have rather limited expectations of his agenda and its impact. My submission is that India Inc, especially well-managed businesses, will continue to do well as long as India maintains a five to six per cent growth rate - reforms or no reforms.
Since the private sector came of age in the 1990s, it has shown itself capable of weathering all manner of storms - political changes, global turmoil, fickle regulation and market cycles.
However, a robust economic growth rate cannot be an end in itself, especially when its impact on the common man is tenuous.
Perhaps nowhere is the trickle-down effect of this growth less apparent than in Mumbai, where the higher the growth rate climbs, the longer are the lines outside community toilets, the more expensive and torturous the daily commute, and the more elusive the dream home.
But, before I address why we as citizens need Narendra Modi more than India Inc does, here are some statistics.
Despite global slowdowns, our average GDP growth rate from 2005 to 2014 has been 7.7 per cent. In 1997, our GDP was $500 bn. In the decade to 2007, it doubled to $1 trillion.
In 2014, we will be a $2 trillion GDP economy. In the last 17 years, our GDP has quadrupled.
During this period, not only have there been reforms and their reversal, political turmoil and uncertainty, scams and their after-effects, but also global crises of a significant magnitude every two-to-three years.
In the midst of this, the private sector in India has shown resilience, dynamism and adaptability. So I do not believe that the private sector will be starved for growth (though I submit the incumbency advantages the Indian economic system offers have had a hand to play in its robustness).
Why then has this growth not translated into a better quality of life? Firstly, growth has not created enough jobs. When India's GDP averaged above six per cent per annum during UPA-I's tenure, it was still not enough to create jobs.
Our growing work force remained starved of enough high-quality jobs in non-agricultural and manufacturing sectors.
And even though much of the growth was often labelled 'service-led', the Planning Commission's own think-tank observed that the services sector witnessed only four million additional jobs in 2005-10, as opposed to 18 million additional jobs which were seen in the same sector in the previous five years!
Secondly, inflation, poor housing, bad roads and lack of access to basic health, security, education and sanitation have undermined the benefits of doubling GDP.
The common man, the salaried individual, the family with kids in government schools, the rural household with no toilets, farmers struggling to get the right prices, the unemployed youth - these are the people who need Mr Modi most, certainly a lot more than businesses do.
The rise in candle-light vigils for justice, the Anna Hazare movement and the Arvind Kejriwal phenomenon are reflections of the eroding legitimacy of the state. This legitimacy needs to be restored.
And it is here that the discussion around Mr Modi and his policies should remain centred.
It is in the area of delivery of public goods, more than in streamlining policy procedures and improving the business environment, that I believe Mr Modi can make a huge impact.
Some early indications show that Mr Modi may be on the right track. Tourism, skill development and infrastructure development have been identified as focus areas.
His campaign to build a toilet for every home, the Swachh Bharat campaign, have received wide appreciation like few other government-led social initiatives have in the recent past.
His wooing of the unbanked population, with the aim of opening over 75 million new bank accounts by January 2015, is perhaps his most appealing move yet. Similarly, his decision to turn job exchanges into career centres, once executed, can be ignition for a listless job market.
His decision to give the RBI governor veto power over a new monetary policy council whose 'predominant objective' will be controlling inflation, the common man's most debilitating weakness, is a sign of his willingness to push the trickle-down effects of a growing GDP to the citizen, through transparency and accountability.
There is still a lot to do. Opening up the supply side constraints will reduce inflation - but any opening could be perceived as a threat by some rent-seeking businesses.
Similarly, a lot of reforms are required wherein the industry may not be the primary beneficiary - or even the immediate one - while these reforms can be transformational for the common man.
This is not socialistic thinking; let me clarify, I am a devoted believer in free markets. But I believe we need to change the focus of discussion.
I truly believe that India Inc can and will take care of itself even without an overt helping hand from the government. The same cannot be said for the common man, who currently feels alienated from India's growth story.
India is slated to become a $5 trillion economy somewhere between 2023 and 2028. If economic reforms that boost businesses and propel the economy are implemented, we could get there sooner, perhaps 2024.
If the economy were to go into slumber mode and international and domestic investments falter once again, we could reach the $5 trillion milestone possibly four or five years later.
Whenever it happens, India will become the third largest economy in the world, no matter who the prime minister.
So let's stop focusing the Modi agenda on India Inc and the capital markets, and let's start focusing on the Modi development agenda for the average Indian.
The writer is chairman and CEO of the Edelweiss Group.