(MENAFN- Khaleej Times) Akhilesh Tilotia considers himself to be an 'economic migrant', who left his hometown, Kolkata, and came to Mumbai more than a decade ago, in search of opportunities. The crumbling infrastructure in the former capital of British India had resulted in many companies moving out of the city to places such as Mumbai, Bangalore and Delhi.
"The forces shaping India's job market, its cities, its industry and agriculture and its equation with the rest of the world come from expected and unexpected places heralding massive opportunities and challenges for citizens, governments and investors," says Akhilesh, whose maiden book, The Making of India, is being launched on Monday.
The book chronicles the journey of India's demographic dividend through the varied transitions taking place in the economy. Says Akhilesh, who is associate director and thematic analyst with Kotak Institutional Equities: "Across its public goods like power, roads, water, education, health and security, Indians have been offered poor outcomes as prices have been kept low in the name of the poor."
Cities like Mumbai and Kolkata have suffered because of the pricing distortions in public goods, argues Akhilesh. And sadly, the economic narrative challenging these distortions has been missing in India for long. Akhilesh recalls that Kolkata was the first city in India to have a metro and he used to travel in it while going to school.
But politicians in India do not allow service providers to charge realistic prices. "The guiding philosophy (while providing public goods), has been that the government has to offer the goods at a low cost. The idea behind this argument is that Indians are poor and hence if we price these basics at 'market rates' they will not be able to afford it."
Unfortunately, what ends up happening is that the utility which provides these services gets impoverished and is then unable to provide the right quality of service to the people without relying on the government for funds. "This increases the political discretion on who gets the service," remarks Akhilesh, who has finance MBA degrees from the Indian Institute of Management, Ahmedabad, and the University of North Carolina, USA, besides a CFA credential from France.
Of course, there is a large segment of the population which cannot afford higher prices for these services. But two things have changed, points out Akhilesh. There is increased prosperity now (especially in the cities) and a larger proportion of people can now pay for good service. Secondly, technology is helping identify the right beneficiary who can be provided subsidies without distorting prices.
Akhilesh points out that unlike water, transportation is not "an emotional issue" with the public, so governments should ensure that prices are not distorted. The first phase of the Mumbai Metro, for instance, has proved to be extremely popular with tens of thousands of commuters, who do not mind paying a relatively higher fare - as compared to non-air-conditioned suburban services.
"We need to creatively think through how to price public goods," explains Akhilesh, who has authored several sectoral reports as part of his professional life with the Kotak group. "The metro is a good example where significant value can be unlocked if the government and the metro operator could participate in the expected increase in value of real estate."
Analysts and researchers in the financial sector in India publish several reports, which are however, targeted at investors. Akhilesh has made a foray by publishing a book that addresses a larger audience including the lay reader, making up for the lack of economic narrative that has resulted in blind opposition to every major reform initiative.
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