Find what attracts Americans.

The Prime Minister is working hard to expand India's manufacturing sector many times over. The US being the largest economy in the world, sucking in around $240 billion worth of imports every month, it makes sense to lay it on as thick as possible when Barack Obama visits Delhi for the Republic Day functions on 26 January. Thanks to the scorched earth policies of the Congress, with shortages of coal, power, and roads, our infrastructure is unable to cope with the present low base of manufacturing and there is no money for the massive investment required. The Private Public Partnership model was defective from the start when companies paid a premium to be awarded projects with very low bids, knowing that the government would bail them out in the end. Sadly, the economy tanked, deficits went out of control, leading to a severe contraction in government expenditure, and the outcry against corruption meant that the usual fun and games had to stop. Companies are deep in the red and banks are unwilling to lend to borrowers who have defaulted on their payments. So the onus is on the government. But there is no money. Much of the growth in the much vaunted years of high growth during the Congress decade was because of high inflation but now that the rate of growth has fallen revenue collections have fallen with it. Even while the fiscal deficits of the center and states was between 6 and 10% during the Congress years the ratio of debt to GDP was falling. The ratio fell from 90% in 2003-04 to 68.5% in 2013-14. How could public debt be declining when the government was borrowing heavily to finance its deficits. The Congress wrought this magic by generating inflation above 10% which brought down the cost of its debt. Inflation, especially of food, hurts the poor, which the present government cannot afford. The Consumer Price Index rose to 5% in December, compared to 4.38% in November, but is still lower than before. The government has already spent 99% of fiscal deficit for the entire year in just 8 months so it will have to reduce its borrowing to keep fiscal deficit within its target of 4.1%, while continuing to fund the social schemes started by the Congress and finding the trillions needed for building infrastructure. Talk about a Gordian knot. The government has to raise tax collections by increasing taxes on petrol and diesel, as their high prices are already factored in, sell stakes in public sector companies, sell off loss making units, such as Air India, reduce non-essential spending and increase spending on infrastructure, which will generate jobs and encourage business. Americans are good at innovations. If only we can make it attractive for them.