Tuesday, November 15, 2011

Economy: India Can Do Much More

By Devinder Kumar
Courtesy IDN-InDepth NewsReport

MUMBAI (IDN) - Some soul-searching mingled with self-praise and encouragement from abroad as the India Economic Summit 2011 wrapped up after intensive discussions on November 14 in Mumbai, the commercial and entertainment capital of India.

'Linking Leadership with Livelihood' was the overall theme of the gathering, organized by the World Economic Forum, and attended by 800 business, government and civil society leaders from India and some 40 other countries.

"We must have much faster inclusion along with growth," said Arun Maira, a member of India's Planning Commission, the Cabinet-level agency that drafts the country's Five-Year Plans.

“We celebrate India as a democracy. What Indians are saying is that we want to participate in the decisions that affect our lives. We want to have a more democratic market and democratic capitalism – business by the people, of the people and for the people," Maira added.

Pointing to demonstrations around the world against what protesters regard as the unfairness of capitalism, Maira said: "India needs much more democratic capitalism. India could be an emerging model of what can be done."

About 70 per cent of India's 1.2 billion people are under 35. Against this backdrop, Mukesh Ambani, India's richest man, called for a generational change in the country's gerontocratic leadership, and urged the government to move faster to implement reforms that would help meet its young population's economic ambitions.

Natarajan Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services, called on India's leaders to focus on "how we can liberate technology to solve problems at a reasonable cost and leapfrog."

Technology, he pointed out, could be used to enhance talent development, financial inclusion, transparency and good governance. “It is absolutely possible to reach the vast majority of people through technology," he explained.

Tata Consultancy Services is a global IT services, business solutions and outsourcing company headquartered in Mumbai. It is the largest provider of information technology in Asia and second largest provider of business process outsourcing services in India.

Ben J. Verwaayen, Chief Executive Officer of Alcatel-Lucent, said that the youth have a simple message for their elders and leaders: "Don’t block us. We have the new models for India. Please don’t get in our way." Alcatel-Lucent is a global telecommunications corporation, headquartered in Paris, France.

India's leaders often refer to the complexity of the country's problems as a reason for not moving swiftly enough to solve them. But India has the ability to sort out the challenges and simplify them so that straightforward solutions are implemented at a faster pace, according to participants in the Summit.

"India has a tremendous brand. It is at an inflection point with opportunities to fall back or to move forward. The world is waiting for India to take its place," said Jeffrey Joerres, Chairman and Chief Executive Officer of ManpowerGroup that claims to be the world leader in innovative workforce solutions, and has its headquarters in Milwaukee, USA.

For Tulsi R. Tanti, Chairman and Managing Director of Suzlon Energy, a global wind power company based in India, the main message of the Summit is that India should focus on building a sustainable economy and reform the country's energy architecture, particularly the power sector, to ensure that "we can bring a better life and better opportunities to the 400 million people" in India who do not have electricity.

The focus of reform efforts should be to tackle corruption and boost transparency, said Huguette Labelle, the Chair of Transparency International, a global civil society organization leading the fight against corruption. "We know that corruption feeds poverty, seeds violence and social destabilization, prevents the development of social infrastructure, and chases away investments," said Labelle.

She argued that India should make efforts to increase transparency in government procurement, licensing and land registration. This would result in huge savings and would be welcomed by citizens in light of the recent rise in public activism against corrupt practices.

Reforms need to push ahead, Adi B. Godrej, Chairman of the Godrej Group, Godrej Industries and President Designate of the Confederation of Indian Industry (CII), agreed. "It is very important that we set politics aside and set the reform agenda so that we can bring reforms forward rapidly so the deceleration of GDP growth can be reversed."

While addressing corruption and increasing transparency are critical tasks, "it is very important for the government to keep in mind that all the progress India has made and the potential progress are dependent on growth," Godrej cautioned.

Centre-State Relations

A good understanding between states and the central government will strengthen Indian people's confidence in their leaders, participants in another discussion round stressed.

Chief Ministers of three Indian states agreed in a panel on the role of states in India’s development that states and the central government have to work together to get things done and keep the country on a stable and sustainable growth path.

"An understanding between the centre and the states is a must. That will only strengthen the confidence of the people," Oommen Chandy, Chief Minister of Kerala, said.

Prithviraj Chavan, Chief Minister of Maharashtra, which includes the city of Mumbai, said that, in his view, India’s states have no problems communicating their concerns and needs to the central government – even if a different party than is in power in Delhi governs a particular state.

"I don’t think there is any difference,” said Chavan, who is a member of the Indian National Congress, the party that leads the governing coalition at the federal level. "By and large, all states are treated equally," averred Chavan.

Yet, there are friction points. Environmental policies and infrastructure project approvals have proven to be difficult areas for states and the central government to find a balance of power.

"States really have to work hard to get environmental clearances," explained Shivraj Singh Chouhan, Chief Minister of Madhya Pradesh. "Projects certainly do get delayed. Many irrigation projects don’t get cleared. You need to give rights to the states. We have them, but they are quite few."

Maharashtra Chief Minister Chavan added: "Decentralization is generally a good idea, but on environmental matters we have a very bad record. Somebody has to make sure that a country’s flora and fauna and natural resources are not completely destroyed. We need the guiding hand of government."

The panellists agreed that states should also collaborate and exchange ideas with other states. "State-to-state cooperation is very beneficial," Chandy, Chief Minister of Kerala remarked. The chief ministers welcomed a proposal from a participant that a think tank or non-partisan policy unit be established to help states develop policies and avoid repeating research, analysis and preparatory work.

Canada's experiences in this respect could be useful. In Canada, provinces have a great deal of power over environmental policies and project approvals, remarked Christy Clark, Premier of British Columbia, which is on Canada's west coast. She noted that British Columbia has instituted a carbon tax, the first such levy in North America.

"Because we have carefully observed the rights of provinces, we have liberated provincial economies to do more for the country," she reckoned. Clark said that British Columbia routinely consults with other provincial governments and has copied policies that have worked in other provinces. All of Canada’s provincial premiers will visit India on a joint mission in 2012, she told participants. [IDN-InDepthNews - November 14, 2011]

Picture: India's Planning Commission member Arun Maira and Jeffrey Joerres, Chairman and Chief Executive Officer, ManpowerGroup, USA | Credit: WEF - Eric Miller