—Dero Saunders,

Forbes magazine.

For decades, the story of independent India has been a story of pity — the pity of her politics, her potential, her poverty. But in about 2003, India became a story of wonder — the wonder of her emergence, her brain power, her vibrancy.

Now it’s 2008, and we’re back to being a pity story. The reasons are much the same as before. We can’t, like the government in New Delhi, hope that India’s current woes will vanish when oil prices fall. We know it won’t. Because when India became a wonder story in 2003, it came off a decade of reform and adjustment. This time, we’re coming off four years of no reform, and there’s no safety net to support our fall. The global oil, food and liquidity crisis has exposed India’s flaws: a country with high everything - inflation, interest rates, real estate, talent costs, fuel and power costs, commodity prices, fiscal deficit. Who’d want to start a business in India today?

We’ve taken a little bit of reform and extended it beyond its life-span. Our entrepreneurs did so well on that that the world rushed to invest in Indian stock markets to tap their dynamism. But we’ve done what we can with virtual infrastructure — satellite, cellular, software. Now we need real infrastructure — real bridges and roads, teachers, medics, agricultural reform — not farm loan waivers, stop-gap rural employment schemes and damaging oil and fertilizer subsidies.

We can’t afford another down-cycle. We’re in the acceleration phase of growth, amidst growing socio-economic aspirations, and the beginning of a manufacturing revolution to help fulfill those dreams. But the aspirations are unmet, manifest in social discontent visible in the recent spate of bombings, the vengeance of the Naxalites and a quota system that, in its effort to be fair, is making everything unfair.

Kick-starting the acceleration cycle requires the active participation of the citizen, the corporation and the state. The citizen and corporation are working very hard, but the state has abdicated. The state provides over 50 per cent of all services from healthcare to pensions -- and they are largely delinquent.

Today, Indian corporations are more influential than the state. If India is draped in wonder, much is due to their efforts. Corporations have power, money, and respect. They have harvested the most from reforms, so they also have the largest stake in ensuring their continuity. They can lead the charge for change. They can start by not being deferential to government. Corporations have benefited from government largesse and protection over the years, and perhaps feel obliged not to be openly rebellious. But now they are adult enough to do without that largesse. Instead of expanding their business overseas, where the regulatory climate is more salubrious, they can stay at home and insist on the right reforms which will benefit everyone, not on the exceptions that will make their companies slip under the wire and get their business done.

Second, they can take the lead in decisive policy-making. Many companies have internal think-tanks that project into the future, and thoughtful reports on affairs domestic and international. They could share those reports and turn the think-tanks into independently funded institutions.

Third, they could help break up the “Delhi clique.” From Bombay, it feels as if country is run by a small clique of politicians, journalists, academics and bureaucrats who are quite disconnected from the rest of the country. Yet they affect all our lives. All companies have listening posts in New Delhi. All business associations like FICCI and CII are based in Delhi. Why? Why should Nasscom, the software association, be based in Delhi instead of Bangalore? Headquarter some of these associations in other parts of the country, like Bangalore and Calcutta, Amritsar and Guwahati. Let debate flower across the country.

Lastly, Indian business ought to take advantage of its internationalisation. Geopolitics is changing; India is no longer politically or economically isolated. But its foreign policy is hopelessly outdated. We are a major power in Asia, yet the only voices that are heard on Asia, are Western voices, and more recently, the Chinese voice.

We need to a view from New Delhi. At the moment, it looks a little pink. Apart from Jawaharlal Nehru University, there is no major Indian university that offers a respectable, internationally recognised degree in international relations. There are some foreign policy think tanks in New Delhi, but none that are truly independent.

The Ministry of External Affairs has not caught up with India’s new dynamism, nor leveraged its expanding international business presence or our influence as a vibrant democracy in the region. It is overworked, calcified, parochial and desperate for outside voices that can both refine its thinking and make the unpopular statements that it cannot. In the last year alone, we have faced major foreign policy issues - and acquitted ourselves honourably of none. Burma, Tibet, Pakistan, Afghanistan, China, the US-India nuclear deal- - Indian business is ubiquitous in these places, yet its voice was never heard in public.

It’s time for Indian business to lead India’s new place in the world. The most creative thinking in India today is coming from the private sector. Government is unlikely to rise to the task and unable to reinvent itself the way business has. Every crisis is an opportunity. The excuse for lack of reform these past years has been that India only transforms when there is a crisis. Well, India is now in a crisis. Will India’s businessmen seize the opportunity to help the country get out of it?

The writer is bureau chief, India, for BusinessWeek magazine. Views expressed are personal