Nothing crystallises public attention like a data point. This week, India was informed that GDP growth in 2024-25 slid to 6.4 per cent. Public investment is lower, industrial growth poorer and consumption is slower. There is much lather on ways to prop consumption—for instance, with a cut in income tax rates. Gaming growth numbers may deliver an illusion. Sustainability calls for fixing problems—and growth will follow. Here are a few ideas for that, in no particular order.
National grid for perishables: A major factor hurting demand is food inflation—hovering at 7+ per cent for over a year, particularly in perishables. India needs a national grid for perishables, akin to what Verghese Kurien created for milk. Induction of a national grid will catalyse higher yields, improve farmer incomes, spur employment and curb post-harvest wastage that’s estimated at 25 percent.
The grid will bridge forward and backward linkages. For starters, the government could use the one district, one product database and use the Amul and Mother Dairy procurement models. Storage will follow procurement as cooperatives and private players enter production contracts. For sure, the template will need policy tweaks for contracts, enhanced credit via Kisan credit cards and funding of cold chains at the panchayat level.
Udyam credit card: Access to formal credit has persistently haunted micro entrepreneurs. A Crisil report reveals that formal credit penetration in the sector is at a mere 20 percent, while the standing committee of parliament for finance found that formal credit touched only 39 percent of smaller enterprises. Micro entrepreneurs struggle to get credit and end up paying usurious rates to private lenders, as has recently been flagged by the RBI. While banks have been directed to lend to Udyam-registered entrepreneurs under priority sector norms, access is stalled or denied.
How about an Udyam credit card for micro enterprises? There is an opportunity to replicate the 1998 idea of Kisan credit cards. Access can be based on Udyam registration and the credit limits can be calibrated on business size and digital trail of UPI transactions. Norms can be set for upgrades and delinquency, and for eventual migration to platforms hosting the Unified Lending Interface.
Monetise ‘solar’ highways: India’s growth story is fuelled largely by government spending on infrastructure. To fuel growth, India imports a bulk of the energy it needs. The template faces challenges. The infra-landscape, however, presents an opportunity.
India has nearly 150,000 km of national highways; high solar-radiation states account for around 70,000 km. The norms state four-lane highways must be divided by a median with a width of roughly five metres (2.5 metres in hilly areas). The potential is clear: road kilometres x 5 metres. The median has clear headroom, zero habitation threats, allows for rapid setting up of customised, high-mast solar panels with automation and innovation on angling. The location would afford connectivity for uploading power and maintenance.
The road transport ministry could direct the National Highways Authority to map the potential, initiate pilot projects by National Thermal Power Corporation and offer the ready-to-plug-and-play spaces for bids from public and private investors. As the idea expands, it will trigger economies of scale in pricing of equipment and energy per kilowatt-hour. The solar highways will present an option for green data centres, automobile charging stations, fund new highways and even trim toll rates.
Amrit Kaal fund: The ambition of a Viksit Bharat calls for a quantum rise in funding. The chairman of the State Bank of India estimates India would need `1,094 lakh crore for 8+ percent growth by 2036. This calls for leveraging public sector assets. The idea of strategic disinvestment is challenged by concerns over concentration of wealth and power. It is also haunted by partisan politics. A viable avenue is to step away from the construct of privatisation to shared public ownership. The idea is to park all PSU holdings of the government into an Amrit Kaal fund, a sovereign entity akin to GIC of Singapore.
India’s public sector enterprises have improved earnings and the market value of public sector stocks has nearly trebled in recent years. The embedded value offers an opportunity to trim deficit, retire debt and upgrade sovereign ratings. To avert political pushback, the government can first transfer PSU holdings in excess of 51 percent. The fund can be leveraged to raise resources, deployed as a vehicle for disinvestment and can be listed as an exchange-traded fund to investors. The money raised can be used to trim deficit and retire debt.
Atmanirbhar senior citizens: India is home to over 150 million senior citizens, many of whom lack pension benefits. The total is expected to touch 350 million by 2050. Seniors are savers, investors and consumers. To propel the trifecta and growth, India needs retooling of the tax policies for seniors.
Senior citizens aspire to an active life and are often self-employed to scaffold their sense of identity and engagement with society. It would be useful to review the 18 percent GST they pay on consultancy incomes; given their frugal living, there is no potential to offset GST. Why not trim GST on the income of seniors—at least with a cap? Seniors also choose to live independently, often at serviced homes. Could there be an exemption on the purchase of residential property by seniors?
The din of decibels on the Trump brand of uncertainty has economic and political implications. India can leverage its domestic economy to weather global storms if—and it is a big IF—it fixes persistent problems.