The year 2016 holds a lot of hope for the Indian economy, especially in the context of what has happened in 2015. There has been a sea change in terms of understanding of issues, taking decisions and integrity at the highest level. These aspects were unfortunately at a premium till some time back. In that context, as coal secretary (of the current government), I can safely say that I didn’t get a single call from anyone to ‘favour’ anyone. So it speaks volumes about this government in terms of its integrity and commitment to do things transparently. In that sense, it is a break from the past. In a country like ours, it does take time for things to gather momentum because of the huge inertia, like when you push a leviathan that has been stuck somewhere; it will take time. As has been evidenced in the context of coal and roads, you can see that things have started happening.
No one probably expected so much development in coal. Today, not a single power plant is critical or super-critical in terms of shortage of supply of coal. Consider that even a year ago, several plants were in a critical state. Today, the average inventory level is 22 days; in late 2014, it was between three and seven days—it was as bad as that. Imports have been coming down for the last five months. Thousands of crores have been saved due to this. Of course, the coal auctions and the transparent manner in which they were conducted started this off. But much beyond coal, I see a lot of commitment to taking decisions, whether it is on FDI, Make in India or the emphasis on renewable energy despite the thrust on coal.
The most remarkable decision in the recent past has been UDAY (Ujwal Discom Assurance Yojana) to revive the discoms. Had this not been done, the power sector would have collapsed, followed by the banking sector and, finally, the Indian economy. The total exposure to the power sector is over Rs 5 lakh crore. If there is no demand for electricity on account of the condition of state electricity boards (SEBs), there will be no power generation and, therefore, no money for SEBs to pay off their debt. All this would have led to serious problems in the future. UDAY is another commitment from the government to set things right. It is not that SEBs went broke in the last one year. This happened over many years. We have now arrived at a situation that needs to be handled immediately. These are positive developments that give hope that things will improve even more in 2016.
My hope is that the Goods and Services Tax (GST) comes through in the new year and that will be a big reform, a real game changer for the country.
My sense is that the infrastructure sector, including roads, will pick up. Electricity has already shown signs of improvement, so will roads. These are the key drivers of the economy. Once the power and roads sectors move, creating more employment and capital investment, the economy will improve.
(This story appears in the 22 January, 2016 issue of Forbes India. To visit our Archives, click here.)