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India Economic Summit

  1. 1. India Economic SummitIndias Next Generation of GrowthNew Delhi, India 8-10 November 2009
  2. 2. The views expressed in this publication donot necessarily reflect those of the WorldEconomic Forum.World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744E-mail:© 2009 World Economic ForumAll rights reserved.No part of this publication can be reproduced ortransmitted in any form or by any means, includingphotocopying and recording, or by any informationretrieval or storage system. REF: 101209
  3. 3. Contents> Preface Page 3> Executive Summary: Indias Next Generation of Growth Page 4> Resilient India Page 10> A Region at Risk Page 14> Green Growth and Inclusive Development Page 18> Tomorrow’s India Page 22> Acknowledgements Page 26
  4. 4. 2 | India Economic Summit
  5. 5. Preface This year, the World Economic Forum and shedding light on India’s future economic celebrated 25 years of partnership and prospects. For the fifth consecutive year, the engagement in India. Under the theme “India’s Schwab Foundation for Social Next Generation of Growth”, over 800 Entrepreneurship presented the India Social participants from over 40 countries convened Entrepreneur of the Year Award, this time to in New Delhi for a milestone India Economic three winners. In addition, two special Summit. The inauguration of the Summit by sessions were devoted to the ways in which the prime minister of India, the active empowering women and educating girls – participation of 14 senior ministers as well as who represent half of India’s productive the contributions of over 100 global CEOs human capital – can be prioritized as an underlined the extraordinary calibre of this economic imperative. year’s gathering and attendant discussions. Next to its strong economic fundamentals, While the mood for this year’s India Economic India’s youthful population calls attention to a Summit was in part celebratory, it did not demographic dividend that could see India divert from the reality of the global economic become a hub for manufacturing, crisis and its impact on India’s remarkable technological innovation and education, social and economic progress over the past among other things. India’s young and eager years. At the time of the last India Economic population has set the bar even higher for Summit, the world witnessed the unfolding of further action and will expect implementation what is now regarded as the worst financial of solutions with the same tempo that has crisis since the Great Depression. As a characterized the past two decades of India’s member of the G20 and an integrated player growth. To this end, the programme was in the global economy, the impact of severe designed to lend a generational perspective international economic imbalances on India on India’s growth priorities. As a result, was inevitable. concrete recommendations were made on a variety of salient topics that will shape the Notwithstanding the immensity of this future of India’s young population, including unprecedented economic transformation, the access to affordable housing, financial outcomes of the deliberations throughout the empowerment of the poor and development programme suggested the broad consensus of female talent. that India could contribute in a substantial way to a global recovery provided key challenges As you read the key points and data are addressed without delay. India is one of presented in this report, we welcome your the few economies to have posted positive thoughts and suggestions as we prepare the GDP growth above 5% in 2009. With its vast programme for the next India Economic domestic market, comparatively less export Summit, which will take place on 13-15 dependency and relative macroeconomic November 2010. Following 25 years of the stability, India’s economy has proven resilient Forum’s successful partnership in India, we in a challenging global context. Accordingly, are ever more committed to action-oriented leaders sought to identify both the key dialogue drawing on the insights and expertise enablers as well as the key obstacles to of our multistakeholder platform, and hope achieving India’s ambitious high-growth that the India Economic Summit will continue agenda. to serve as an important platform for stimulating thought and creative solutions. To generate insight on Indias competitive strengths and weaknesses, the India Economic Summit served as an occasion to launch The India Competitiveness Review 2009, a comprehensive overview of the Sushant Palakurthi Rao country’s current competitiveness landscape, Director, Head of Asia highlighting strengths and problematic areas, World Economic Forum India Economic Summit | 3
  6. 6. Executive Summary: India’s NextGeneration of Growth“Potential” was the leitmotif of this year’s The question hanging over the Summit wasSummit – a word that evokes much promise, not only how to deliver rapid growth, butbut also spells the significant challenges also how to deliver “rapid and inclusiveahead. Few nations have the growth growth” – a promise made by Prime Ministerpotential that India enjoys. Its many Manmohan Singh during the openingattributes are renowned: resilience, plenary.innovation, creativity, entrepreneurial spirit, ayoung population and cultural diversity, to Klaus Schwab, Founder and Executivename a few. Chairman, World Economic Forum, pointed to entrepreneurship as the way forward.Celebrating the World Economic Forum’s 25 “Few nations have the growth potential thatyears of engagement with India, the Summit India already enjoys. India holds the promise “India looks to the future withtook place at a time when confidence in the of a most successful future,” he said. confidence. We are confident ofIndian growth story is intact. The country has “Entrepreneurship drives social and meeting the domestic andweathered the financial crisis and, although economic progress; however, [it] always has international challenges to fast andgrowth dipped from 9% during the five years to serve the public interest. This should be atpreceding the meltdown, it is expected to be the base of India’s way into a bright future.” inclusive growth. We are alsowhat the prime minister called a better placed than any time in the“respectable” 6.5% for 2009-2010. Most Business leaders debated what will be the recent past to push the reformeconomic experts are predicting a return to next big driver for India’s growth story. Many process forward. I believe we9% growth post-2010. pointed to the latent potential in the urban markets. Rural retail markets are expected to have a bright future if we make useThe World Economic Forum’s India reach US$ 58 billion by 2015. Already, rural of strengths and the opportunitiesCompetitiveness Review 2009 reports that consumption accounts for more than 69% of that we get.”the country benefits from well-functioning total consumption and is growing faster thaninstitutions, a fairly developed financial urban consumption. Manmohan Singhmarket, innovative and sophisticated Prime Minister of Indiabusinesses, and sheer market size. But, does India have the right infrastructureHowever, India faces shortcomings in some to realize this potential? The country has acritical areas – health, education, huge deficit in key sectors – power, roads,infrastructure, fiscal management, ICT ports, airports, telecommunications,diffusion and labour market efficiency. irrigation and urban infrastructure. The prime minister is looking to innovative public-4 | India Economic Summit
  7. 7. “The world has come to recognize the potential of India for its ability to innovate and its growing role on the global stage. [India has the opportunity to become] a high performance nation.” William D. Greenprivate partnerships to eliminate this deficit, Forum; Co-Chair of the India Economic Chairman and Chief Executive Officer,but must continue his efforts to make India Summit, pointed to the country’s potential Accenture, USA; Co-Chair of the Indiaan attractive destination for FDI. crippling “say-do gap”, which drew a round Economic Summit of applause during the closing session. “TheAt the same time, the country should focus problems are not growing faster than ouron broadening its economic base. The capacity to find solutions. Where the gap isagricultural sector, which accounts for one- growing is in accountability. We are notquarter of the economy, could be a good holding people accountable,” observedplace to start. Three-quarters of the Palaniappan Chidambaram, Minister ofpopulation depend on farming and could Home Affairs of India.benefit from activities higher up theagricultural value chain, such as food The results of the May 2009 election and ofprocessing and better land management. the past five elections, where voters oustedThere is potential in green technologies if more than 40% of the members ofIndia decides to turn climate change on its Parliament, show that, while democracy ishead and meet its energy challenges. entrenched in India and coalition governments are not going to go away,As the country’s growth rate recovers, the people’s expectations are high and they arepeople at the bottom of the pyramid are still demanding accountability. In the lastfacing economic and social exclusion. A parliamentary elections, 100 million eligibleWorld Bank report notes that more people voters were aged between 18 and on less than US$ 2 a day in India than insub-Saharan Africa, and a large proportion The younger generation – the nextof the population is excluded from education generation – is huge. Nearly one-fifth of theand skills development – about 7.1 million world’s population lives in India and one-children are out of school and, among 15-29 third of them are less than 15 years old.year olds, only 2% have received formal Young people want greater transparency invocational training. governance and a more participative government. They see themselves asOn a positive note, India’s Planning potential creators of wealth and stakeholdersCommission reports that, by 2020, the world in India’s future.will need 56.5 million more skilled workers.This is a huge opportunity if India gets its This “youth bulge” holds out both challengeseducation and skills development right. and opportunities. Chanda Kochhar,Policy-makers and business leaders should Managing Director and Chief Executiveseize this opportunity. The World Bank Officer, ICICI Bank, India; Co-Chair of theestimates that increasing the proportion of India Economic Summit, pointed out: “If weworking age Indians who are economically skill [our young people] and train themactive from 60% to 75% would add US$ 3.7 properly, they will be a huge asset. If we dotrillion to the country’s GDP by 2020. not, they will become a liability.”But, how can India realize its huge potential? Prime Minister Singh promised that “inclusiveIndra Nooyi, Chairman and Chief Executive growth” will provide productive employmentOfficer, PepsiCo, USA; Member of the to India’s young population and raise livingFoundation Board of the World Economic standards in rural areas across the country. India Economic Summit | 5
  8. 8. “India is in a sweet spot. We canbuild banks and a variety ofservices for all sorts of people. Themarket has opened up and themarket looks like us. It doesnt looklike the West anymore.”Raghuram RajanEric J. Gleacher Distinguished ServiceProfessor of Finance, University of Chicago also promised to move ahead with The prime minister and his government haveBooth School of Business, USA financial reform, including deepening a huge job ahead; keeping the government’s ambitious reform agenda on track will be no financial markets. He also committed to easy task. In addition, India must close the working with the private sector to find gender gap if growth is to be truly inclusive. effective models of public-private This is no longer a “nice to have”, it is an partnership. Investment in vocational economic imperative. education and training is needed to bridge the skills gap. However, Montek S. Ahluwalia, Deputy Chairman, Planning Commission, India, • To broaden its economic base, India must remained upbeat: “It is true that there are boost rural markets and focus on its many reform-related initiatives on the strengths. India has a large domestic agenda. Every one of these appears market and the government needs to do controversial in one way or another. But in more to mobilize domestic savings, the last 10-15 years, we have handled these currently about 25% of GDP. However, problems and moved ahead.” escalating rural consumption may well be the next big trigger of growth. India’s This report on the 2009 India Economic competitive advantage is in technology- Summit is centred on the programme’s four intensive manufacturing – India’s themes: Resilient India, A Region at Risk, manufacturers must lead by innovation, Green Growth and Inclusive Development, tapping the inherent creativity and and Tomorrow’s India. entrepreneurial spirit of its people. Resilient India • To realize fast-track growth, India must eliminate its infrastructure deficit. The India is one of the few economies to post a prime minister described an ambitious GDP growth rate of more than 5% since the programme of investment in all of the key financial crisis. Growth this year is predicted sectors – power, roads, ports, airports, to be a respectable 6.5%. But how can this telecommunications, irrigation and urban growth be sustained and accelerated? How infrastructure – which must be carried can the serious constraints from deficiencies out. The lack of roads remains the in infrastructure, education, healthcare, the greatest obstacle. The government must legal system and the financial sector be rise to the challenge of building 20 overcome? kilometres per day, and follow through with its public-private partnership Recommendations scheme. It must also address a major • India must keep its reforms on track. roadblock for foreign firms – India’s Prime Minister Singh must keep his cumbersome bureaucracy. promise of inclusive growth. India can see a return to increased growth rates if • India must invest in education and current reforms – particularly in education, training to resolve the growth conundrum. healthcare and the financial sector – stay With nearly two-thirds of its population on track and expand. The prime minister younger than 35, India has the worlds6 | India Economic Summit
  9. 9. largest pool of young people. Of the 22 • To attract more investment, India must million children who attend school, only address perceptions that it is a difficult 12.4% pursue further education. India’s place to do business. The country caught immediate goal is to raise this number to the eye of portfolio investors following the 20% by 2020. The government has May 2009 national elections and its quick increased the national budget for higher and strong comeback from the 2008 education, but much remains to be done. global financial crisis. But, there has been Reform is urgently needed. Participants no corresponding jump in FDI so far and called for a complete overhaul of the institutional investors appear slightly less education system. enthusiastic. A more assertive India – one with an image that reflects its G20 statusA Region at Risk – could be a more attractive India.India can always fall back on its domestic • To increase capital flows from abroad andmarket to weather the international domestically, and as a buffer against anyeconomic storm. However, the country’s future global crisis, India should enact theeconomic destiny cannot be decoupled from financial system reforms announced bythat of its neighbours. India is dependent to the prime minister. Top executives froma large extent on how South Asian Indian and international financialeconomies fare and how the region institutions endorsed these capital marketcollectively manages risks, including social reforms, adding that the futures marketinstability, climate change, pandemics and needs to be improved by better pricedwindling natural resources. discovery and regulation. In addition, institutional hurdles must be removed toRecommendations facilitate better intermediation. They• India must develop energy resources, pointed to the insurance bill as a good with alternative energy leading the way, to start in the asset management area. help meet the country’s growing needs while keeping a lid on carbon emissions. • To boost agricultural production and “During the next two-and-a-half days, However, 45% of Indians remain off the ensure food security, water resources grid and 70% of the nation’s energy must be managed more prudently and we do not want to look back, but resources are imported. India’s capacity farmers, corporations and government [want] to develop a roadmap for the must be boosted seven to eight times in must work in harmony. Indian agriculture future. We must turn our attention to the next 15-20 years. Some consider this lies stagnant due to poor water an opportunity to boost the country’s management and scant innovation in those challenges that have to be power supply with alternative energies. farming inputs and practices. addressed as we redesign [the Most participants agreed that the trend is Compounding problems of groundwater world] for the next generation.” and will continue to be away from depletion and contamination, climate traditional fuels like coal and towards change will likely disrupt rainfall. Just as cleaner options. farmers must diversify their crops, a Klaus Schwab myriad of responses will be needed to Founder and Executive Chairman, World address the problem. Economic Forum India Economic Summit | 7
  10. 10. Green Growth and Inclusive They also called for engaging politiciansDevelopment and policy-makers and convincing men to take more interest in the issue.Building a low-carbon economy thatgradually embraces millions of poor citizens • Working to ensure the success ofwill require India to forge “next practices” – in international negotiations on climateother words, to innovate in the pursuit of change and taking a leadership role in theenvironmentally sustainable growth and development of green technologies areinclusive development. As it expands, the crucial. A supportive climate changeIndian economy will need growing numbers regime will help India achieve what it isof skilled workers. Women, who are mostly already doing in its own interest. Rathermarginalized in today’s economy, can fill that than blaming each other, countries mustgap in the future if girls receive education collaborate, especially in developingand training today. energy-saving technologies, renewable energies and alternative fuels. Many “[In India] there is a gap betweenRecommendations noted that such innovations will come out• India must invest in girls to enable them of India and China. what we say and what we do. We to make greater contributions to Indian need focus on the say-do gap. We society and its economy. The Summit • India must redouble efforts to become a have talked about a lot of issues – focused on the contribution girls can world leader in technological innovations make to a growing Indian economy when that provide low-cost and socially we need to show progress. It has to they grow up. Unleashing this potential inclusive solutions. India already leads the be faster. I think the issues are would provide India with a major engine world in frugal product planning. The growing exponentially. The solutions of growth and could add US$ 56 billion to government can harness and expand that capability by improving education and are coming at a slow pace and this the Indian economy annually, according to some estimates. providing incentives for entrepreneurs and is not a good equation.” researchers to address the problems and• To guarantee continuity on inclusive needs of average citizens. The idea is to Indra Nooyi development after the India Economic focus on solutions that are both Chairman and Chief Executive Officer, Summit, participants called for a task accessible and scalable. PepsiCo, USA; Member of the Foundation force to be convened by the World Board of the World Economic Forum; Global Economic Forum, similar to the Forum’s Agenda Council on the Role of Business; Co- highly successful disaster relief initiative. Chair of the India Economic Summit8 | India Economic Summit
  11. 11. Tomorrow’s India manufacturing sector a number of competitive advantages. While India is inFew nations have the growth potential that an excellent position to serve emergingIndia enjoys. But there is much work to do if economies, the government mustIndia is to realize its potential and fulfil the address the bottlenecks.ambitions of the many who see it as the neweconomic frontier. • India must close the gender gap if it is to unleash the country’s vast economicRecommendations potential. Equal rights for women is a• India must strengthen its entrepreneurial business and economic imperative. It is ecosystem if it is to prosper from new fundamentally important to ensure their markets and enjoy sustainable economic talent is not wasted. Success within growth. It needs to maximize the latent companies should be determined by potential in “sunrise” industries such as merit, not gender. To this end, companies IT-related business services, renewable should be made more accountable; they energy, healthcare and others. The need to measure their progress on country must address deficiencies in its gender parity and report on it. Gender enterprise support system. The education parity within business is achievable – system must be reoriented to teach possibly within the next 10-15 years – entrepreneurship. Regulation and tax depending on political and corporate will. regimes need to be reformed to provide incentives to entrepreneurs and banks • Responsible and collaborative political must make it easier to access capital. dialogue must become the norm if Indians are to get the government they• To become an incubator for innovation, deserve. The results of the national India must act fast if it is to survive elections in May gave clear evidence that growing and fierce global competition. people’s expectations are very high. India has the potential to boost its About 40% of the members of Parliament manufacturing competitiveness. However, were not re-elected during the last five because of problems with power, ports, elections. A mechanism must be created railroads, roads and water, and a to facilitate collaboration between ruling shortage of human capital, manufacturing and opposition parties to enable has lagged behind targets. At the same cooperation on the big-picture issues. time, India offers potential investors in the India Economic Summit | 9
  12. 12. Resilient India10 | India Economic Summit
  13. 13. India weathered the perfect storm of 2008 – excessively high. If the governmentrocketing oil prices, increasing food scarcity addresses these issues, it will at once createand hunger, accelerating climate change and jobs and help realize India’s enormousthe global financial meltdown – as one of the internal and external market opportunities.fastest growing economies in the world. In2009, India is set to emerge second only to The government must also focus onChina as one of the world’s powerhouse governance. India has good laws andeconomies. globally comparable legal frameworks, but lacks effective implementation and adequateBut how can India sustain and accelerate law enforcement. As Shumeet Banerji, Chiefthis growth? As many participants pointed Executive Officer, Booz & Company, Unitedout, sustainable, long-term growth is not a Kingdom; Co-Chair of the India Economicgiven. Myriad new challenges – as well as Summit, observed: “I do think that law in “Over the long run, the [sustained]new opportunities – are on the horizon. India is a massive competitive advantage. The regulatory structures look reasonably 9% growth rate is feasible and it isMontek S. Ahluwalia, Deputy Chairman, attractive, but there is enormous stickiness plausible, but it is not ordained.Planning Commission, India, was optimistic when trying to get things done.” [However] we believe that India inabout India’s potential: “There are inherentstrengths on the supply side, which make it To broaden its economic base, India one generation, 30 years frompossible for India to grow. We can handle must boost rural markets and focus on now, will be an affluent society.”the constraints. The moment you look at the its strengths. India has a huge domesticsupply side, India has all that is needed to market and the government needs to do Rajat M. Nagtake off.” more to mobilize domestic savings, currently about 25% of GDP. Managing Director-General, AsianGrowth accelerated from 5.6% in the 1980s Development Bank, Manilato 9% in the five-year period preceding the Escalating rural consumption is potentiallyfinancial crisis. The economy grew at a rate the next big trigger of growth. Rural India –of 6.7% in 2008-2009 and, despite an home to about 70% of the country’s 1.1inadequate monsoon and a slowdown in billion people – has been a sleeper untilagriculture, growth in 2009-2010 is recently. Rural retail markets are expected topredicted to be 6.5%. Most economic reach US$ 58 billion by 2015. Ruralexperts at the Summit predict a return to 9% consumption, including governmentgrowth post-2010. spending, accounts for more than 60% of total consumption and is growing faster thanTo keep his promise of “inclusive growth”, urban consumption.Prime Minister Singh needs to include thoseat the bottom of the pyramid in India’s Telecoms companies, financial servicesuccess story and broaden the base of providers, entrepreneurs and governmenteconomic growth. regulators should collaborate to drive financial inclusion by better serving theThe country faces serious constraints from unmet needs of the poor, many of whom livedeficiencies in infrastructure, education, in rural areas. For example, mobile telephonyhealthcare, the legal system and the financial enables the extension of financial services tosector. To overcome these, the government the excluded – 188 million Indians withmust keep reforms on track and work with mobile phones have no access to credit orthe private sector to find effective models of banking. Already, telecom provider Bhartipublic-private partnership. At the same time, Airtel has promised to invest US$ 1.5 billionIndia must increase its appeal to foreign this year to improve connectivity in ruralinvestors. More investment in vocational and training is needed to bridgethe widening skills gap. Because of the potential of the Indian market, sustainable solutions need to beKey Recommendations found for India’s increasing consumption. Opinions differ as to whether these solutionsIndia must keep its reforms on track. should be driven by business or theIndia can see a return to increased growth consumer. Businesses have a responsibilityrates if current reforms stay on track and to find ways of operating that are sociallyexpand. The prime minister promised to relevant and environmentally sustainable.move ahead with developing long-term debt Some are already beginning to see themarkets, a corporate bond market, strong benefits of having a sustainable value and pensions sectors, and futuresmarkets. Accelerating government India’s competitive advantage is in“disinvestment” in state-owned companies is technology-intensive manufacturing – itsalso on his political agenda. manufacturers must lead through innovation, tapping into the inherent creativity andParticipants called for swift reform and entrepreneurial spirit of its people.deepening of India’s financial markets if thecountry is to attract FDI. Business is still To realize fast-track growth, India mustconstrained by administrative hurdles and eliminate its infrastructure deficit. Thehigh costs of doing business. The lack of roads remains the greatest challenge.government must also support the SME To meet the challenge of building 20sector, the backbone of any economy. The kilometres per day, the government hascost of starting up a business remains launched one of the largest public-private India Economic Summit | 11
  14. 14. partnership schemes in history – US$ 20 With nearly two-thirds of its population billion, with 60% to be raised by the private younger than 35, India has the world’s sector. The government is planning to bid largest pool of young people. However, of out six mega road projects in Rajasthan, the 22 million children who attend school, Madhya Pradesh, Gujarat and Maharashtra. only 12.4% pursue higher education. India’s immediate goal is to raise this number to Kamal Nath, Minister of Road Transport and 20% by 2020. Highways of India, said that the Expressways Authority of India would be set The government has increased the national up next year to study the specific needs of budget for higher education, but much developing expressways in the country. “We remains to be done and reform is urgently have already set up a division for needed. Participants called for a complete“India has come through the crisis expressways. Next year, we are going to set overhaul of the education system, whichbetter than other countries. We a separate expressway authority … needs to be made accessible, affordable and expressways are the next big thing on our accountable; there needs to be morehave growth here. This is a big plate,” he said. The minister expressed flexibility and mobility. Public-privatemarket and there is opportunity for optimism that road construction activity partnerships should be explored as a means would reach the 8-9 kilometres per day mark of funding educational changes.firms to come in here. But there is by December 2009 and the target of 20still room for India to improve the kilometres per day would be met by March Kapil Sibal, Minister of Human Resource 2010. Development of India, invited the privateatmosphere for entrepreneurs to sector to participate in India’s educationoperate.” But foreign firms are often discouraged by agenda. Sibal emphatically outlined the India’s inefficient bureaucracy. Issues of distinction between “profit” and “surplus”, concern include the acquisition of land; stating that enterprises must be allowed toLars H. Thunell lowball project estimates that result in the make surpluses that can be reinvested in theExecutive Vice-President and Chief Executive contractor bearing extra costs; and tedious, sector. “We cannot allow education to beOfficer, International Finance Corporation exclusive, decision-making processes. exposed to risk factors,” he stressed.(IFC), Washington DC However, the government claims it is addressing these roadblocks. Conclusion India must invest in education and These challenges help to explain why India training to resolve the growth ranks 49th out of 133 ranked economies in conundrum. Once India’s growth rate hits the World Economic Forum’s Global 7-8%, companies face a critical skills Competitiveness Report 2009-2010 and why shortage and turnover increases from a it slipped a notch to 133rd place in the World manageable 2-3% to as much as 20-30%. Bank’s Doing Business 2010 Index. This creates an unstable environment for However, there are promising signs that, in manufacturing. All sectors in the economy pursuing its reform agenda, the government face similar challenges. is starting to recognize where it should step back and let the private sector take over.12 | India Economic Summit
  15. 15. “About 40% of the bank network is in rural India but covers just 6% of villages. [We] must think far more innovatively about leveraging technology platforms. Let’s not talk about a branch in every village, but a branch in the back pocket of every individual [or in every woman’s sari].”For example, in the media and entertainment In addition, the government is aggressivelyindustry, the government is pushing for pursuing FDI to address challenging physical Kalpana Morpariareform and is very proactive in its FDI policy. infrastructure issues.Ambika Soni, Minister of Information and Chief Executive Officer, J. P. Morgan, IndiaBroadcasting, said that allowing private radio However, India must urgently address itsstations to air news bulletins would help to daunting demographic challenges,increase their economic viability. If approved, particularly its “youth bulge”. It must also beFDI in the FM radio sector will be raised to more effective in educating and mobilizing its26% from the current 20%. abundant human resources to ensure that growth is indeed inclusive.“We are preparing a cabinet note wherein weplan to allow private radio stations to air Palaniappan Chidambaram, Minister ofnews capsules using certain portions of All Home Affairs of India, summed up theIndia Radio news bulletins along with other government’s mood: “The mood is one ofadd-ons. These could be news about local cautious optimism. The plans are fine, butsports events, weather bulletins and even we falter in implementation. We are veryemployment news,” she said. tolerant of apathy, lethargy and free riders,” he said. “We have to allow new players in,The ministry is also developing a revenue crack the whip and get the job done.”share model between music royalty ownersand FM stations over the controversial issueof royalties. India’s Key Economic Strengths and Weaknesses The India Competitiveness Review 2009 released at the Summit situation prevents the government from making much-needed provided participants with a comprehensive overview of the country’s investments. The diffusion of information and communication current competitiveness landscape. The report highlights strengths technologies remains very low by international standards. and problematic areas, and sheds light on India’s future economic Bureaucracy, over-regulation and corruption still affect the functioning prospects. of markets, in particular the labour market. India ranks 49th out of 133 countries in the Global Competitiveness In addition to analysing India’s performance in the Global Index as a result of mixed performance across the 12 categories Competitiveness Index, the review includes two other contributions. covered by the Index. The first is by the Confederation of Indian Industry (CII), and examines India’s recent growth drivers as well as challenges presently facing India displays competitive strengths in areas of business policy-makers in their efforts to foster more inclusive growth and sophistication, innovation and financial market sophistication. The development. country can also rely on fairly well-functioning institutions. The second contribution is by PricewaterhouseCoopers, and On the other hand, there is considerable room for improvement in presents the results of the 13th annual CEO Survey in India, several of the basic drivers of competitiveness, in particular shedding light on how India’s business leaders see the nation’s infrastructure, health and primary education, while the runaway fiscal resilience and competitiveness at a time of crisis and recovery. India Economic Summit | 13
  16. 16. A Region at Risk14 | India Economic Summit
  17. 17. While capable of falling back on its domestic place in which to do business, even formarket to weather the international Indians themselves. That image is reinforcedeconomic storm, India – like all countries – by stories like the one told by Sachin Duggal,remains tied to developments around the President and Chief Executive Officer, Nivio,world. The country also faces security Switzerland; Technology Pioneer. Duggalthreats at home. established his company in Europe because he found too much red tape and too littlePalaniappan Chidambaram, Minister of venture capital at home. “I am a patriot, but IHome Affairs of India, addressed the am also a realist,” said the young entrepreneur.domestic threat. “Our security challenges areno different than those facing every country Nevertheless, the country caught the eye ofof the world – terrorists,” he said. “We are portfolio investors following the 2009alive to the challenge. Every day, every week national elections and the quick and strong “Protectionism is not the answer –and every month we are adding capacity comeback from the 2008 global financialand building confidence.” crisis. Still, there has been no corresponding there should be collective jump in FDI so far and, as the rest of the cooperation among the nations.”Sundry cross-border risks were discussed, world gets back on its feet, institutionalranging from the effects of erratic weather on investors appear slightly less enthusiastic Pranab Mukherjeefarmers to the country’s image among about India.foreign investors. The global economic Minister of Finance of Indiadownturn received due attention, as did the At the Summit, there was a sense that aenergy crunch. more assertive India – one with an image that reflects its G20 status – could be a moreKey Recommendations attractive India. “As we become a more important economic player, we have to alterIndia must develop energy resources – how we engage the world,” said Raghuramwith alternative energy leading the way Rajan, Eric J. Gleacher Distinguished Service– to help meet the country’s growing Professor of Finance, University of Chicagoneeds while keeping a lid on carbon Booth School of Business, USA. “We stillemissions. Baba N. Kalyani, Chairman and engage the world as a colonial victim.” HeManaging Director, Bharat Forge, India; Co- added: “As we have economic influence, weChair of the India Economic Summit, noted must also have intellectual influence.”that 45% of Indians remain off the grid and70% of the nation’s energy resources are India might also do well to call attention toimported. “You’re talking about increasing comments by foreigners like Kevan V. Watts,the capacity of India by seven or eight times Country Head, Bank of America Merrillin the next 15-20 years,” he said. Lynch, India. Watts makes no effort to hide his bullish take on the country: “I haveHowever overwhelming that may seem, Tulsi worked all over the world for 29 years withR. Tanti, Chairman and Managing Director, Merrill Lynch. There is a reason why I am inSuzlon Energy, India, looked on the bright India,” he said.side. “I think it is a great opportunity,” hesaid. “We are quite behind the [United] To increase capital flows from abroadStates, but we can build our power supply and domestically, and as a bufferwith alternative energy.” against any future global crisis, India should enact the financial systemMost panellists agreed that India will have to reforms announced by the primerely on a large basket of both clean and dirty minister. Top executives from Indian andenergy for the foreseeable future. However, international financial institutions endorsedthe trend is and will continue to be away the capital market reforms outlined by thefrom traditional fuels like coal and towards prime minister at the Summit. “We do needcleaner options – even if international climate to do the things mentioned by the primechange talks fail. “We will have to address minister,” said Ashok Jha, Chairman, MCXglobal warming,” said Madhu Koneru, Stock Exchange, India.Executive Director, Trimex Group, UnitedArab Emirates. “If we want to attract The prime minister said, “We need to developinvestment, we will have to have de facto long-term debt markets and to deepencompliance [with emissions targets].” corporate bond markets. This, in turn, calls for strong insurance and pension sub-Tejpreet Singh Chopra, National Executive sectors.” He added: “We need to improvefor India, General Electric, India, laid out a futures markets for better price discovery andthree-point plan for moving forward: regulation. We also need to remove institutional• Encourage energy efficiency hurdles to facilitate better intermediation.” “We are extremely behind in the• Invest immediately in “key technologies” power sector. We need more The proposals for the bond market “will• Aim for energy security by investing on several fronts, notably renewable energies facilitate capital flows [from abroad] in an energy. That could bring the environment where there is no longer excess capital,” said Jim Quigley, Global Chief biggest growth.”To attract more investment, address Executive Officer, Deloitte, USA. Accordingperceptions that India is a difficult place to Robert Morrice, Chairman and Chiefto do business. Whatever the realities on Tulsi R. Tanti Executive, Asia Pacific, Barclays, Hong Kongthe ground, India must overcome SAR, “The insurance bill will be a good start Chairman and Managing Director, Suzlonperceptions, especially among investors in the asset management area.” Energy, Indiaoutside the country, that it remains a difficult India Economic Summit | 15
  18. 18. “This is not about the government trying to do something and industry trying to take advantage of the situation. It is time for government and industry to work together [on agriculture].” Sekhar NatarajanTo boost agricultural production and water security for all. We must produce with Chairman, Monsanto India, Indiaensure food security, water resources less land, water and energy. And we shouldmust be managed more prudently and improve farmers’ lives.”farmers, corporations and governmentmust work in harmony. Forty years after Kushal Pal Singh, Vice-President, Nationalthe Green Revolution succeeded on the Institute of Agriculture, India, pointed out thatstrength of better irrigation and higher- this could only happen if the government,yielding seeds, Indian agriculture lies farmers and corporations join forces andstagnant due to poor water management work together.and scant innovation in farming inputs andpractices. Compounding problems of Conclusiongroundwater depletion and contamination,climate change will likely disrupt rainfall Sam Pitroda, Adviser to the Prime Ministerpatterns – painting a daunting picture for on Public Information Infrastructure andIndian farmers, who depend on the heavens Innovations, Office of the Prime Minister,for 60% of the moisture that nourishes their India, was outspoken in his defence offields. India’s potential, and his views seemed to reflect those of many participants. “This is aJust as farmers must diversify their crops, country of disparity. This is a country ofmyriad responses are needed to address the diversity. This is a country of confusion,” heproblem. “Instead of a single solution, there said. “We have to accept that.”will be a great number of solutions,” saidMargaret Catley-Carlson, Patron, Global But Pitroda went beyond mere acceptance.Water Partnership (GWP), Sweden. In the “We are living in exciting times in India,” heview of Sekhar Natarajan, Chairman, said. “Building a nation is different fromMonsanto India, India, “The challenge building a company. It takes more than fiverequires us to improve production in a years. It requires patience – especially “I was encouraged by what thesustainable manner. There must be food and democratic patience.” prime minister said because it appears that he intends to go ahead with the reforms.” Kevan V. Watts Country Head, Bank of America Merrill Lynch, India16 | India Economic Summit
  19. 19. Celebrating 25 Years of Partnership: India and the World Economic ForumThe World Economic Forum celebrated 25 years of active “Second, the 1991 economic reforms spearheaded by the thenengagement in India at its annual India Economic Summit. This year’s Finance Minister – now Prime Minister – Manmohan Singh, not onlySummit set a new record for total participation with over 800 leaders changed the competitive landscape within India, but also changed thefrom industry, government, civil society and academia from over 40 mindsets in business, government and civil society,” he continued.countries. Schwab praised the close collaboration with the Confederation ofProfessor Klaus Schwab, Founder and Executive Chairman of the Indian Industry (CII). “Through the resultant deep partnership andWorld Economic Forum, looked back over a quarter of a century of friendship, year after year we have worked together to host the Indiapartnership with India, and noted two events in particular as having Economic Summit, which leverages our experience in providing theplayed an important role in the relationship. necessary space for interaction to deliberate challenges to India’s future growth and to formulate proposals and recommendations to“First, 25 years ago, when the Indian economy was thirsting for address these with a multistakeholder approach,” he said.reform and liberalization to realize its full productive potential, the latePrime Minister Rajiv Gandhi encouraged us to create a platform with At the same time, Indian industry leaders have been among the mostwhich we could show the world that the country was ready to come engaged and committed in Forum activities throughout the year.out of years of isolation and move towards a trajectory of “They have lent their time and expertise to our initiatives, our Industrymodernization,” Schwab said. Partnership programmes and our various knowledge capacities, such as the Global Agenda Councils,” Schwab concluded. India Economic Summit | 17
  20. 20. Green Growth and Inclusive Development18 | India Economic Summit
  21. 21. “To imagine something that is basic and to build something unique is a useful talent when the world is trying to use fewer resources.”The idea of building a low-carbon economy While humanitarian and moral arguments for Carlos Ghosnthat gradually embraces millions of poor relieving girls of their burdens are strong, Chairman and Chief Executive Officer, Renaultcitizens would seem to fall under the rubric debate focused on the contribution they France; President and Chief Executive Officer,of what C. K. Prahalad, Paul and Ruth could make to a growing Indian economy Nissan, Japan; Member of the FoundationMcCracken Distinguished University when they grow up. Unleashing this potential Board of the World Economic Forum; Co-Professor of Corporate Strategy, University would provide India with a major engine of Chair of the India Economic Summitof Michigan, USA, calls “next practices”. growth and could add US$ 56 billion to theSaid Prahalad: “No country has done this Indian economy annually, according to somebefore, so you cannot benchmark best estimates.practices. You must forge next practices.” “When you look at the issue, it is no longer aIf India adopts many of the groundbreaking ‘nice thing to have’ but an economicideas discussed at the Summit, it may imperative,” said Chanda Kochhar,become the global leader in next practices. Managing Director and Chief ExecutiveAs it expands, the Indian economy will need Officer, ICICI Bank, India; Co-Chair of thegrowing numbers of skilled workers; mostly India Economic Summit. “Companies cannotmarginalized in today’s economy, women miss out on a talent pool equal to 50% of thecan fill that gap in the future if girls receive population.”education and training today. To guarantee continuity after the Summit,By turning climate change on its head, using participants suggested possible next stepsit to spur innovation, India could achieve to bridge the gender gap:lower carbon emissions while becoming aworld leader in green technologies. By • The World Economic Forum shouldfocusing on technologies that address the convene a task force based on the modelneeds of average citizens, India can continue of its successful disaster relief initiative: “Ito be a world leader in developing can sign KPMG to do that right now,”inexpensive, practical technologies. said Lord Hastings of Scarisbrick, Global Head of Citizenship and Diversity, KMPGKey Recommendations International, United Kingdom.India must invest in girls to enable them • Encourage politicians and policy-makers toto make greater contributions to Indian join more fully in the debate: “It is at panels “The historic accumulation of CO2 issociety and its economy. Maria Eitel, like this that I want to see policy-makers, I not the result of what we have done,President, Nike Foundation, Nike, USA, want to see ministers,” said Rajshreesummed up the predicament of many girls in Pathy, Chairman and Managing Director, but is the consequence of 150 yearsIndia: “There’s a complete population that Rajshree Sugars & Chemicals, India. of industrialization in the majorprovides the infrastructure of poverty. Anadolescent girl, as she carries water, is the • Convince men to take more interest in the developed countries of the world. It isplumbing system. As she carries firewood, issue of gender and why bridging the our hope … that the world’s majorshe’s the electric grid. As she takes care of gender gap is an “economic imperative”. economies will be prepared to createthe sick, she’s the healthcare system. Whena cow dies or when someone gets sick in India should work to ensure the success an environment where larger capitalthe family, she’s the insurance policy. She’s of international negotiations on climate change and take a leadership role in the flows are available for mitigation andthe transportation system as well. As long asshe continues to provide infrastructure for development of green technologies. adaptation measures.”poverty, it will continue to exist. What we India wants to have “a supportive climatehave to do is break that cycle. Education is change regime to help us do what we are already doing in our own interest,” said Manmohan Singhthe answer. She cannot be in school if she’sspending her whole day involved in chores.” Shyam Saran, Special Envoy of the Prime Prime Minister of India India Economic Summit | 19
  22. 22. Minister of India on Climate Change. “But we Instead of blaming each other, countries are a developing economy. We are not must collaborate, especially in developing making our action on climate conditional to energy-saving technologies, renewable what anyone else is doing. If we have to do energies and alternative fuels. “The more, then we do need global support.” Any innovations will come out of China and global climate change agreement has to be India,” predicted Deepak Puri, Chairman and fair and equitable, he declared. Managing Director, Moser Baer, India. Suresh Vaswani, Joint Chief Executive The argument that growth is not compatible Officer, IT Business, and Member of the with environmental responsibility is a “false Board, Wipro, India, said that companies choice,” argued Lord Stern, IG Patel should “open source” green technology. Professor of Economics and Government,“It’s important to move beyond India Observatory, London School of India must redouble efforts to become a Economics, United Kingdom. Major world leader in technologicallooking at girls at victims. One of the developing economies such as Brazil, China innovations that provide low-cost andissues of girl rights is that it tends to and India are outlining ambitious and creative socially inclusive solutions. India already climate plans, he remarked. leads the world in what Carlos Ghosn,look at girls as victims; it doesn’t look Chairman and Chief Executive Officer,at them as a resource or an asset.” “If the rich world has that deeper Renault France; President and Chief understanding, then suspicions that they are Executive Officer, Nissan, Japan; Member of doing all these things and others are doing the Foundation Board of the WorldBarkha Dutt nothing will disappear,” Stern noted. He Economic Forum; Co-Chair of the IndiaGroup Editor, New Delhi Television (NDTV), warned that protectionist measures in the Economic Summit, calls frugal product name of carbon-emission reduction would planning.India be the wrong response. “The right response is the collaborative one,” he said. “India has engineers, product planners and designers who are second to none in frugal Business leaders agreed. “We should product planning,” he said. “Nobody else reaffirm the need to approach the problem can build a car for US$ 2,000 to US$ 3,000.“Our strategy is not just to deliver multilaterally,” said William A. Reinsch, I have to come to India for that. To imaginerapid growth, but to deliver rapid President, National Foreign Trade Council something that is basic and to build (NFTC), USA. “We need to leap off the cliff something unique is a useful talent when theand inclusive growth … that will together.” Ben J. Verwaayen, Chief Executive world is trying to use fewer resources.”provide productive employment to Officer, Alcatel-Lucent, France, called onour young population and raise governments to act now. “If we lose The Indian government should harness and momentum and inspiration, we will not just expand that capability by improvingliving standards in rural areas have a postponement of a couple of months. education and providing incentives foracross the country.” It will go off the table for a long time. We entrepreneurs and researchers to address cannot afford it. We need leadership to get it the problems and needs of average citizens. done and business should speak up.” “The best minds have always been used toManmohan SinghPrime Minister of India20 | India Economic Summit
  23. 23. “It is usually called governance, but I am an old-timer so I like to call it corruption. Corruption is an issue. No country that is corrupt is rich; no country that does not build up its human resources is rich; and no country that is corrupt builds up itssolve the problems of the rich – who don’t Conclusionhave that many problems,” said Sam human resources. You can run thePitroda, Adviser to Prime Minister on Public Although he was talking about socially regressions yourself. It is public data.”Information Infrastructure and Innovations, inclusive technology, Pitroda’s comment isOffice of the Prime Minister, India. “The poor applicable to green and inclusivehave lacked this knowledge bank.” C. K. Prahalad development: “We want to create a whole new business model,” he said. “The US Paul and Ruth McCracken DistinguishedThe idea is to focus on solutions that are consumption model is not scalable. It is not University Professor of Corporate Strategy,both accessible and scalable, according to workable. And it is not sustainable for India University of Michigan, USA; Global AgendaPitroda. “We want to create a whole new or the rest of the world.” Council on Innovationmodel. We don’t want to create fancygadgets but rather look at the needs of the Noted Prahalad: “We have done work withpoor and address them,” he said. focus groups with people in the countryside. Regular people, they are ready. Are we as leaders ready?” Close India’s Gender Gap to Open Its Competitive Potential Women, as half of the human capital of India, need to be more A new Forum report released at the meeting, The India Gender Gap efficiently integrated into the economy in order to boost India’s long- Review 2009, shed more light on the issue. The report presented the term competitive potential. Two plenary sessions at the Summit results of a comprehensive survey assessing the current state of investigated ways to close the country’s sizeable gender gap, which, gender-related corporate policies and practices in India. according to the Forum’s Global Gender Gap Report 2009, sees it ranked 114th out of 134 countries measured. Only 14% of the companies questioned have 40% or more women among their employees. These women employees are mainly present India has closed 93% of its health gender gap, 84% of its education at the entry and middle levels of management, while very few women gap, 41% of its economic participation gap and 27% of the political attain senior management level. Most companies do not track salary empowerment gender gap according to The Global Gender Gap gaps, despite the clear wage gaps between women and men – only Report 2009. India holds last place among the BRIC countries in the 4% of the companies surveyed are attempting to monitor salary gaps. Index, behind Russia (51), China (60) and Brazil (82). “The Forum’s survey of some of the biggest companies in India In South Asia, the country is in second-to-last place behind Sri Lanka shows that, to achieve better integration of women in the economy, and Bangladesh and ahead of Pakistan. Sri Lanka leads in the Indian companies will need to set targets, improve policies to close rankings by far, holding 16th position, followed by Bangladesh (94), salary gaps and promote work-life balance,” said Saadia Zahidi, Co- Maldives (100), Nepal (110), India (114) and Pakistan (132). author of the Forum’s Global Gender Gap Report 2009 and Head of the Forum’s Women Leaders and Gender Parity Programme. India Economic Summit | 21
  24. 24. Tomorrow’s India22 | India Economic Summit
  25. 25. “We spoke about infrastructure, education, inclusive growth and skills development. The irony is that each one of these issues can turn confrontational, often violent. Elected officialsDespite continued GDP growth, India’s into an opportunity or a bottleneck.entrepreneurial ecosystem is challenged by and political parties across the spectrumregulation and lack of seed capital, mentors need to find ways to collaborate to help lead If we skill young people and trainand diversification of industry sectors. Yet, the country to a brighter future. them properly, they will become aIndia is a potential incubator for innovation huge asset. If we don’t, they willfor many sunrise industries, particularly in the Shashi Tharoor, Minister of State for Externalmanufacturing and healthcare sectors. Affairs of India, raised the concept of become a liability.” vasudeva kutumbam, which construes the“One of the greatest assets we have is world as one, and asked the world to open Chanda Kochharentrepreneurship. We came to India because more windows and doors to make space for India. Managing Director and Chief Executivethe market delivers. We find very good basicskills. What we also need are engineers and Officer, ICICI Bank, India; Co-Chair of thepeople who can work on the shop floor. “We have traditionally been willing to look India Economic SummitThere is a need to do something here,” said beyond a narrow interpretation of power. WeJoerg Mueller, President and Managing are a responsible global player. Having saidDirector, Volkswagen India, India. that, we are going to have to do things so as not to deprive our citizens of the basics ofIndia must close the gender gap. Women development. We can’t be altruistic at thecomprise half of India’s human capital, yet expense of our own population,” he said.the country ranks a dismal 114th out of 134countries measured by the Forum’s Global Anand Sharma, Minister of Commerce andGender Gap Index 2009. Indra Nooyi, Industry of India, noted that the last fewChairman and Chief Executive Officer, years have witnessed major changes in IndiaPepsiCo, USA; Member of the Foundation and the world, during which India has beenBoard of the World Economic Forum; Co- able to redefine its engagement with theChair of the India Economic Summit, called world as well as reshape itself and itsfor relevant government ministers to meet economy, ambitions and policies.with business and civil society leaders toprioritize the issue. “Addressing this is Key Recommendationsurgent. Why isn’t change happening faster?We have not created the infrastructure for India has to strengthen itswomen to become achievers,” she said. entrepreneurial ecosystem if it is to “There is a really important prosper from new markets and enjoy opportunity to take the talent thatAs India’s economic prowess increases, so sustainable economic growth. India’sdoes its influence on the global political success story has many chapters, involving India has and deploy it towardsstage. It is speaking up at G20 meetings and domestic and multinational companies. The innovation. The world is desperateengaging in debate at the World Trade country’s track record in specific industryOrganization. Indian leaders have committed sectors is legendary, but it needs to for new business models. Theto finding an equitable solution to the Doha maximize the latent potential in sunrise developed world needs todeadlock. They are also vocal about industries such as IT-related businessredesigning the global architecture to reflect services, renewable energy, healthcare and transform. The learnings will comethe aspirations of emerging economies. others. from the developing world.”But as India plays the role of good global India must address the deficiencies in its William D. Greencitizen abroad, closer to home political enterprise support system. The educationdialogue is proving difficult. India is the system must be reoriented to teach Chairman and Chief Executive Officer,world’s largest democracy and coalition entrepreneurship, and role models of Accenture, USA; Co-Chair of the Indiagovernments have ruled for two decades. successful entrepreneurs must be promoted. Economic SummitHowever, Indian political culture is India Economic Summit | 23
  26. 26. “A lot is happening on the Regulation and tax regimes need to be Numerous foreign manufacturers have met reformed to provide incentives to India’s infrastructure bottlenecks head-onmanufacturing side. The key entrepreneurs and banks must make it with considerable success: LG uses India asimpediment to becoming a global easier to access capital. an export hub; Hyundai has set up its small car manufacturing base there; Nokia’shub is not infrastructure bottlenecks, India’s trade and investment engagement handset manufactured in the southern statebut entrepreneurship and has shifted to higher trajectories, changing of Tamil Nadu costs 12% less than its the way it does business globally. India has counterpart in China.leadership capability. Any country eschewed protectionism and recently signedthat has these two elements can an economic partnership agreement with India offers potential investors in the South Korea, a free trade agreement (FTA) manufacturing sector a number ofovercome the hurdles.” with ASEAN, and is working on an competitive advantages: a huge domestic agreement with Mercosur (Mercado Común market, wages less than half of those inJyotiraditya Scindia del Sur, the South American regional trade China and a large talent pool, including a agreement) and Mercosur-Sacu (Mercosur’s strong engineering ecosystem. India is alsoMinister of State for Commerce and Industry FTA with the Southern African Customs in an excellent position to serve emergingof India Union). These new FTAs have the potential economies in Latin America, Africa and to open India’s manufacturing sector. elsewhere in Asia. Currently, this represents 11% of India’s export market, but it is set to To become an incubator for innovation, grow dramatically. India must act fast if it is to survive growing and fierce global competition. India must close the gender gap if it is Innovation and entrepreneurship are the to unleash the country’s vast economic lifeblood of the Indian economy. India is a potential. Equal rights for women is a proven centre for cost innovation. The business and economic imperative. It is famous US$ 2,000 Nano car riveted the fundamentally important to ensure their attention of manufacturers worldwide, talent is not wasted. Success within forcing a rethink of production and companies should be determined by merit, distribution economics. General Electric’s not gender. To this end, companies should US$ 1,000 made-in-India electrocardiogram be made more accountable; they should machine is another success story. measure their progress on gender parity and report on it. India has the potential to boost its manufacturing competitiveness while “The rights of girls and women are built into employing millions of new workers. However, our constitution … the time has come for us because of problems with power, ports, to say we know what the issues are, we railroads, roads and water, and a shortage of need to move on to what concrete, specific human capital, manufacturing has lagged actions will taken by corporates, by behind targets. government, by the various ministries. We’ve24 | India Economic Summit
  27. 27. had a lot of discussion, but we’ve not seen between ruling and opposition parties.enough action,” said Vinita Bali, Managing Challenges need to be corrective,Director and Chief Executive Officer, constructive and selective, and there mustBritannia Industries, India. be cooperation on the big-picture issues.Change is happening at village level. More Conclusionwomen are elected to panchayats (villagecouncils) since quotas were imposed. Optimists believe India is poised to play aParticipants agreed that gender parity within pivotal role in shaping the next generation ofbusiness is achievable – possibly within the global growth. The country certainlynext 10-15 years – depending on political possesses all of the qualities to position itselfand corporate will. at the heart of the global economy. But can government push through its reforms to “The crisis has brought IndiaResponsible and collaborative political deliver rapid and inclusive growth, and can itdialogue must become the norm if create an enabling environment for FDI to squarely to the global table. It hasIndians are to get the government they address the infrastructure deficit? To realize a big role to play – India is thedeserve. The results of the national elections its full potential, India must play on its microcosm of the world. It is a big,earlier this year gave clear evidence that strengths, particularly innovation.voters’ expectations are very high. People fractious place that finds a way toare increasingly demanding accountability Political will is paramount. “The government build consensus.”from their elected politicians. Parliamentarians needs to execute its plans. Just do it. I thinkmust fulfil their responsibilities as they enjoy it is achievable,” concluded Carlos Ghosn, Shumeet Banerjitheir privileges, and decisions must be taken Chairman and Chief Executive Officer,through dialogue. Renault France; President and Chief Chief Executive Officer, Booz & Company, Executive Officer, Nissan, Japan; Member of United Kingdom; Co-Chair of the IndiaDemocracy is well entrenched; differences of the Foundation Board of the World Economic Summitopinion and ideology are not only possible Economic Forum; Co-Chair of the Indiabut also desirable. However, a mechanism Economic Summit.must be created to facilitate collaboration The Davos Debates in India: Can India Become a Superpower? Some 60 participants joined the first “Davos Debates in India” to participants tweeted from the meeting, including Shashi Tharoor, share their views on India’s future potential. The video debate on Minister of State for External Affairs of India and H.R.H. Crown Prince YouTube was also open to the global community, and attracted over Haakon of Norway (, reaching a 5,000 views. combined audience of 3.2 million people. People were asked, “Can India become a superpower?” Among other participants, Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank, India, a Co-Chair of the Summit, answered: “India is sitting at a very exciting stage of economic development … which means that a rebalancing of economic power will take place.” To gather different perspectives, a street survey in collaboration with one of Indias leading broadcasters captured viewpoints from the general public. The plenary sessions at the Summit were streamed live on Livestream and are available on the Forum’s YouTube channel ( Key quotes from the sessions were tweeted live on the Forum’s The first Davos Debates in India were watched over 5,000 times Twitter stream (, allowing a worldwide audience of 1.4 million to follow the discussions. Furthermore, 17 India Economic Summit | 25