Management Perspectives

Notwithstanding the dreaded, unpredictable, and spiralling Covid-19 pandemic—which has already played havoc and continues to inflict tragic loss of lives and livelihoods—India continues to march forward on almost all fronts and gives us some reason to celebrate the dawn of 2022. One can see many path-breaking happenings in all facets of life. Let me start with the corporate and industrial world, where joint efforts of the government and private sector have resulted in admirable progress.

The first thing that comes to my mind is the government’s decision to finally make a start on the much delayed and extremely challenging task of making semi-conductors, the little chips that are at the very core of several, crucial industries like automobiles, consumer durables, mobile phones, IT industry… anything that uses electronics! The `76,000 crore sanctioned for the sector under PLI scheme is bound to give it a kick start and garner private investment in the range of `3 to `4 lakh crore. It is a very high tech, difficult, and costly venture, but we just cannot stay away from it any longer. This crucial field—once the monopoly of Intel and other such American companies is currently dominated by China, and we cannot continue to depend on that source.

Secondly, the announcement by Arcellor Mittal Nippon Steel, the words two largest steel makers, to jointly put up a 24 million ton mega steel plant in Odissa is another great news. The fact that this plant will use green technology and produce high value added special steels is the icing on the cake. Such a large plant will generate thousands of new jobs. It is also bound to contribute significantly to, arguably, the two biggest challenges the world faces today - climate change and social inequality. Add to this the expansion plans of Sajan Jindal targeting 18 MTPA in Karnataka and already having another 10 MTPA in Maharashtra, Tata Steel at around 20 MT ….our capacity is now well over 100 MTPA that makes us second largest in the world. Even though China’s 1.2 BTPA dwarfs us but our progress is quite impressive. Same story with Cement - capacity over 400 MTPA . Interestingly, in both these vital sectors, private sector has an overwhelmingly dominant share. Both semi-conductors and the proposed AM/NS mega steel project are huge steps towards ‘Atma Nirbhar Bharat’.

Another area that has shown admirable progress is Renewable Energy. Egged on by our bold pledge, at the 2015 Paris Climate Summit, to have at least 40 per cent of our power generation from non-fossil sources, we have actually met that target nine years in advance. Out of our total capacity of 390GW, we already have 106GW from solar and wind and another 50 from hydel. With investments pouring in for several new projects like (i) 400MW recent award to ReNew Power with the special new condition of ensuring 80 per cent utilisation per year and not less than 70 per cent in any month; (ii) Adani’s proposed investment of $50-70B in ‘green production & installation; (iii) Ambani’s plan of 4 ‘giga factories’ worth `60,000 crore to produce solar cells, modules, fuel cells, battery grid, etc. we seem to be well on our way to meet the revised 2030 target of 500GW. The auto industry too is upbeat with Maruti lining up their biggest annual product onslaught—half a dozen new product launches in 2022 and a target of selling two million units in the year. EVs is another sunshine sector with a target of selling one million units in 2022. Incidentally this figure equals our cumulative production in the last 15 years.

Then there are other indicators like (a) stock markets heralding the new year with a big bang—Sensex and Nifty both rising robustly; (b) majority of India Inc. CEOs talking about strong post-COVID growth, seeing an investment boom and making large Capex plans; (c) December ’21 exports recording a 37 per cent increase over the performance in December ’20; (d) PMI jumping from 48.1 in June to 57.6 in November 21; (e) bounty of IPOs; (f) funding of nearly `1.2 lakh crore in 2021; (g) direct tax collections over `9 lakh crore in the period April to December ’21; and (h) filing of nearly 6 crore IT returns for FY 20-21. We should also not forget the furious rate of highways construction, introduction of new, high quality trains, metros in many cities, and increased spending on defense equipment including a decent share for the domestic industry. Recent reports about the GDP growth touching 9.2 per cent in FY22 suggest that the economy seems set for perhaps the fastest growth since 1988-89.

While, unfortunately, Covid-19 caused tremendous damage to many industries and resulted in the migration of industrial labour on a huge scale, it also resulted in the emergence of many innovative industries and boosted production in several sectors. For eg, I was surprised to learn that a company like IKEA had a long waiting list for their special office desks that people needed at home. Then there were some industries which had mixed luck, such as health services. Hospitals saw a decline in planned surgeries and regular health check programs.

Work from home led to ‘remote working’ from all parts of the country, and it is good to learn that tier 2 cities like Bhubaneshwar, Kochi, Chandigarh, etc. are now commanding salaries almost at par with those in the metros—this is good for (a) reducing inequality; (b) lesser migration; and (c) in the long run, improving quality of life in smaller towns.

Another significant gain was the boom seen in the start-ups arena. Many of these quickly became unicorns. We have witnessed brilliant new start-ups emerging regularly, attracting huge funds from all over the world, and some of them growing really big. Many of these are engaged in ‘socially oriented ventures’ like organic and hydroponic farming, water and energy conservation, commercially viable water desalination, solutions for stubble burning pollution issue, and many others.

As some scientists have opined, after the present Omicron peaks, the dreaded Covid-19 pandemic could be on its way out. Naturally, everyone is looking forward to getting back to some sort of normalcy in their lives and work. Most of us are hoping that the so called ‘New Normal’ will free us from all restrictions on travel, socialising, work, shopping, entertainment, cultural events, sports, et all and we will once again get back to business as usual. Sadly, it is not going to be so. We seem to be missing out on one of the crucial factors that has brought us face to face with the cursed infection and no one is sure if that will disappear with the universal vaccination drive. Sir David Attenborough, world renowned environmentalist has beautifully explained the relationship between the pandemic and the other much debated subject of ‘Climate Change’. In an engaging short video he puts it down to the phenomenon of ‘the human race encroaching upon the space meant for animals, birds, reptiles, insects, and other species’. Man’s seemingly insatiable appetite for more seems to be at the root of all this. His documentary A Life On Our Planet has jolted the world into realising that our planet is dying by our hands and set everyone thinking how to slow down and stop this suicidal act of humanity. My own take from the film is ‘we must learn to live with less’. For a start, we need to look at our own homes. Most of us have become impulsive buyers without ever thinking whether we need the stuff? Happily the corporate world seems to have learnt a lot in this department. With COVID came the concept of WFH and lot of companies have discovered the merits of this. People work flexi hours, they save time spent on commuting, and they don’t have to dress up for office, they can help with household work, and spend more time with the family…there is seemingly no downside to this. Our drive to increase capacity of renewable energy - already amongst the fastest in the world - will continue. At the same time our agriculture has to transform too. We can’t carry on with the hugely inefficient irrigation systems and water guzzling crops which we don’t even need. Environmental degradation and lack of inclusivity—the two biggest challenges before the world—will most likely be addressed by the corporate world as they move on with life in the post-pandemic era. Our New Normal will and should lead us to a better world; and 2022 will be just the beginning!