India must scale back state intervention in business, restore the balance of powers between the legislature, executive and judiciary, build new coalitions to rise up to the challenge posed by China, said a study by a think-tank.
Contending that India was outmatched by China economically, the study titled 'Strategic Patience and Flexible Policies' suggested interventions to restore “rough parity” to ensure that Beijing did not spring up surprises, as it did in Ladakh last year, again.
The paper, authored by Gautam Bambawale, Vijay Kelkar, Raghunath Mashelkar, Ganesh Natarajan, Ajit Ranade and Ajit Shah, India needed to get back to the high growth environment of 1991-2011 to pitch itself within reach of China's economic, cultural, technological and military power.
The paper identified the increased tendency towards government micromanaging the economy; the expanding administrative state and growing erosion of the rule of law as key challenges to India's growth story.
It noted that the Indian state was prescribing details of products, processes, technology and even placing additional activities in public sector monopolies.
“This creates business model risk for private persons and reduces the incentives for private persons to commit resources to compete in fairways,” the experts said.
They said that the concentration of power in the executive has led to an unequal application of the rule of law to private persons.
“This reduces the incentives for private persons to commit resources into building organisations in India,” the paper said, suggesting the restoration of the balance of power between the legislature, executive and the judiciary.
The report argued for certain restrictions to be put in place like limiting state-controlled Chinese companies from taking a controlling stake in sensitive infra assets in India, staying clear of Chinese technological standards and blocking surveillance of Indian people and entities by Chinese entities, Bambawale said.
The study also suggested that India should build coalitions with 20 countries with whom it shared values and interests.
Deccan Herald is on WhatsApp Channels| Join now for Breaking News & Editor's Picks