The Percy Mistry Committee report on turning Mumbai into an international financial hub makes very interesting reading as it gives recommendations which have some freshness. But the factors that could make Mumbai a city to reckon with in the global village go beyond issues like developing the derivatives markets.
Mumbai has maintained its edge over other competing cities to be the financial capital of India, and that would remain so for a long time to come. The presence of the Reserve Bank of India and the Securities and Exchange Board of India headquarters in Mumbai has ensured the city'slead position in financial matters. The Bombay Stock Exchange and the twin commodity exchanges in the city are more well-known to people in the hinterland than RBI and SEBI.
But, there are several lessons to be learnt from cities like London, New York and Singapore. These cities have been the hallmark of financial system management. But it has to be conceded that Mumbai'spremier position amongst its peers in the country was only because of the state government'spreferential treatment to keep its relevance intact.
That position is all set to change now. Mumbai'sinfrastructure is crumbling and there seems to be little effort on the part of either the state government or the Centre to mitigate the situation. Look at the hare-brained idea of asking industry and industrial regions to fend for themselves for power. In any developed country the idea that all industrial units have to get their own power generation would have outraged the business community, but in India we are so desparate for solutions which have festered for so long that we are ready to take any direction from the government.
There are so many industrial zones and parks, malls and departmental stores in Mumbai. Some industrial areas are so small that power generation would be unviable. And would the small scale sector be able to bear the burden of such high cost of captive power generated in the industrial belt out of diesel generators? But the most pertinent question is that if industry has to fend for themselves what is the point in paying taxes. Very soon the summer heat would make water scarce in Mumbai. Will the government then ask industry to make arrangement for their own water supply? Will that kind of policy direction extend to roads and their upkeep, garbage disposal and sanitation?
In the developed countries, which are the models for developing countries like India, there are several competing utility companies which offer rates and services to suit one'sneeds. Just as we in India have in the telecom sector. We have competing corporations in cell phone services, internet services, cooking gas, et al. It is obvious that major utilities services like power and water should also have such competing distribution networks so that the customer, be it retail buyer or industrial consumer, gets value for money?in quality and quantity Mumbai'stragedy is that the political class is increasingly getting uninterested in its fall from grace. The political fact is that the number of Assembly or Parliamentary seats from the city is so minuscule that they don'tprompt the political parties to perform miracles in the city. It is simply not worth their while. Shiv Sena-BJP is much better-placed to deliver on making Mumbai a world-class city. It was proved when it came to power. Nearly 27 fly overs were built in a record time to ease Mumbai'shorrendous traffic snarls. But today the political insouciance is costing Mumbai its place in the sun.
Yet on the other hand, Mumbai faces severe shortage of skilled manpower. Industry complains of its inability even to get ordinary accountants. Some of the five-star hotels in Mumbai which used to pride over their service to customers today have to settle for illiterate staff as there are no educated youth who would take up the job. It is on these fronts that the governments, both in the state and at the Centre have failed miserably. Even as there are no new power projects even on the drawing board in spite of having a power crisis brewing in the last six years, there are no new schools or colleges in and around the city, technical or otherwise, to meet the huge demand from industry.
With the boom in all sectors of industry it is becoming increasingly difficult to get quality personnel in regulatory organisations. SEBI has admittedly made various incentives to add to the high pay and perks to wean technical and financial personnel from industry. If these are the ground realities how will you convert Mumbai into an international financial hub? The best lesson that one learns from London, New York and Singapore is that these cities are wholesome in offering the financial world its services. They have in addition to all the markets and banks and financial institutions, a near-perfect infrastructure, a lifestyle that behoves the technical and young population, security and all the necessary linkages with the world through telecommunication and transport. So if the government wants to make that dream of converting Mumbai into an international financial hub come true then it has to think about issues more wide-ranging than curtailing the Reserve Bank of India'sresponsibilities.