Monday, January 31, 2011
The Business-Standard on INDIA Future of Change's Davos panel 1
The Business-Standard has an article on INDIA Future of Change's Davos panel on "How will India grow faster than China." The event was part of the India Inclusive program at Davos:
Raghuram Rajan, honorary economic advisor to the Prime Minister, today said India should not follow the US “blindly” on environment.
“Environment protection is important, but the question is whether you can stretch it beyond a point. At this stage of its development, India needs factories as well,” he said at a session on ‘How will India grow faster than China?”
The comments of the Eric J Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Booth School of Business are important in the context of the controversy surrounding the environment ministry’s rigid stand on giving clearance to many industrial projects.
Referring to Rajan’s concerns on pushing the environment agenda too far, Planning Commission Deputy Chairman Montek Singh Ahluwalia said opinions like these are welcome as India is seeing the early stages of debate on sustainability issues. On one side are non-government organisations (NGOs) who think environment protection is a costless exercise, and on the other is the opinion whether India is being over-protective and pushing the environment agenda too far. “You can expect transparent policies after deliberations,” he said.
In this context, Ahluwalia talked about the use of technology and innovation which can go a long way in environment protection. Giving the example of Chotukool, a nano refrigerator developed by Godrej & Boyce for the rural markets, Ahluwalia said such frugal engineering is the way to go. Chotukool is compact, cheap and it does not use electric power. Responding to the constraints of reliable power in India’s villages, Godrej created an easy-to-use, energy-efficient, battery-operated refrigerator.
Essar Group Chief Executive Prashant Ruia did not refer to the environment ministry’s stand, but said while he sees a long runway for India’s manufacturing sector, India Inc’s accessibility to natural resources is a big concern. “You need domestic sources of raw material ad hence access to the country’s natural resources is a necessity,” Ruia said.
The discussions were moderated by Martin Wolf, chief economics commentator, Financial Times.
Responding to questions on the other key challenges that the Indian economy faces, Rajan said the fiscal deficit, mounting debt, quality of spending, archaic laws and inflation threatening to touch double digits were the danger signals. “We must take corrective action to ensure that the economic growth rate doesn’t slip back to the Hindu rate,” Rajan said at a session on “How will India grow faster than China?”
He agreed with Ahluwalia’s view that some corrective actions are required to avoid a situation where Brazil found itself in. “History is replete with examples of economies hitting a brick wall after sustained stupendous performance. Brazil’s economic growth, for example, touched 2 per cent after sustained double digit rates,” Ahluwalia had said.
Rajan said talent shortage — not necessarily at the very top — is another huge area of concern. “We’re running out of electricians and plumbers because our education system is not keeping pace,” he added.
On his part, Ahluwalia said these are important issues, but he was confident about India’s economic growth staying on course. While admitting that India has to get its act together on infrastructure, Ahluwalia said he expects half the investments in infrastructure projects to come from pubic-private partnerships in the next five years. The share last year was just 13 per cent.
On inflation, Ahluwalia said that is the “least of his worries” as he expects inflation to come down to 7 per cent by the year-end, a sharp decline from the double-digit levels last year due to unseasonal weather.
On his part, State Bank of India Chairman O P Bhatt said a comparison between India and China is not fair as the latter started its industrialisation drive at least 15 years before India’s. “China’s infrastructure is already 10 times bigger than us, and yet they are talking about investing at least two times our outlay,” he said.
Bhatt wondered whether India’s growth rate is sustainable at a time when the rich is getting richer and the poor is getting poorer, and advocated quick action in areas such as agriculture as 40 per cent of the produce is still getting wasted.
He also talked about the need to increase the size of India’s banks so that they can take part in the growth story more meaningfully. “We need to be at least five times bigger than the existing size,” he said.
India's green obsession makes Rajan see red
Shyamal Majumdar / Davos January 28, 2011
Raghuram Rajan, honorary economic advisor to the Prime Minister, today said India should not follow the US “blindly” on environment.
“Environment protection is important, but the question is whether you can stretch it beyond a point. At this stage of its development, India needs factories as well,” he said at a session on ‘How will India grow faster than China?”
The comments of the Eric J Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Booth School of Business are important in the context of the controversy surrounding the environment ministry’s rigid stand on giving clearance to many industrial projects.
Referring to Rajan’s concerns on pushing the environment agenda too far, Planning Commission Deputy Chairman Montek Singh Ahluwalia said opinions like these are welcome as India is seeing the early stages of debate on sustainability issues. On one side are non-government organisations (NGOs) who think environment protection is a costless exercise, and on the other is the opinion whether India is being over-protective and pushing the environment agenda too far. “You can expect transparent policies after deliberations,” he said.
In this context, Ahluwalia talked about the use of technology and innovation which can go a long way in environment protection. Giving the example of Chotukool, a nano refrigerator developed by Godrej & Boyce for the rural markets, Ahluwalia said such frugal engineering is the way to go. Chotukool is compact, cheap and it does not use electric power. Responding to the constraints of reliable power in India’s villages, Godrej created an easy-to-use, energy-efficient, battery-operated refrigerator.
Essar Group Chief Executive Prashant Ruia did not refer to the environment ministry’s stand, but said while he sees a long runway for India’s manufacturing sector, India Inc’s accessibility to natural resources is a big concern. “You need domestic sources of raw material ad hence access to the country’s natural resources is a necessity,” Ruia said.
The discussions were moderated by Martin Wolf, chief economics commentator, Financial Times.
Responding to questions on the other key challenges that the Indian economy faces, Rajan said the fiscal deficit, mounting debt, quality of spending, archaic laws and inflation threatening to touch double digits were the danger signals. “We must take corrective action to ensure that the economic growth rate doesn’t slip back to the Hindu rate,” Rajan said at a session on “How will India grow faster than China?”
He agreed with Ahluwalia’s view that some corrective actions are required to avoid a situation where Brazil found itself in. “History is replete with examples of economies hitting a brick wall after sustained stupendous performance. Brazil’s economic growth, for example, touched 2 per cent after sustained double digit rates,” Ahluwalia had said.
Rajan said talent shortage — not necessarily at the very top — is another huge area of concern. “We’re running out of electricians and plumbers because our education system is not keeping pace,” he added.
On his part, Ahluwalia said these are important issues, but he was confident about India’s economic growth staying on course. While admitting that India has to get its act together on infrastructure, Ahluwalia said he expects half the investments in infrastructure projects to come from pubic-private partnerships in the next five years. The share last year was just 13 per cent.
On inflation, Ahluwalia said that is the “least of his worries” as he expects inflation to come down to 7 per cent by the year-end, a sharp decline from the double-digit levels last year due to unseasonal weather.
On his part, State Bank of India Chairman O P Bhatt said a comparison between India and China is not fair as the latter started its industrialisation drive at least 15 years before India’s. “China’s infrastructure is already 10 times bigger than us, and yet they are talking about investing at least two times our outlay,” he said.
Bhatt wondered whether India’s growth rate is sustainable at a time when the rich is getting richer and the poor is getting poorer, and advocated quick action in areas such as agriculture as 40 per cent of the produce is still getting wasted.
He also talked about the need to increase the size of India’s banks so that they can take part in the growth story more meaningfully. “We need to be at least five times bigger than the existing size,” he said.
Sunday, January 30, 2011
The short view from Davos - India and the future of change - Part 2 of 2.
After the resounding success of the “How will India pass China” panel, with attendance exceeding capacity, the organisers Amit Shahi and Sudhir JohnHoro from theIdeaworks were keeping their fingers crossed before the start of the next session the following day. There were several events going on that Friday afternoon in Davos.
However, the discussion on design, innovation and entrepreneurship in an emerging India, which featured panelists Paola Antonelli, Wilfried Aulbur, Bill Rusitzky, M P Ranjan, S D Shibulal and K R Shridhar, as moderated by Tim Brown, drew a very strong audience.
The topic on ‘Design, Innovation and Entrepreneurship – Change Drivers for India’s Inclusive growth’ was a vibrant discussion on innovative design and ‘out of the box’ creativity to reduce the costs of India’s growth and frugal engineering making the benefits of this growth accessible to a wider swathe of its people.
Paola Antonelli started off by comparing India’s position as similar to that of Italy after World War II. India, she said, has a vibrant sense of life, living and a culinary culture and is well placed to utilize its talents to reduce the ecological costs of growth.
M P Ranjan spoke of the challenges faced by his design students in finding acceptance for their designs, a lacking ecosystem and among other things, creative initiatives from the Indian Institute of Craft and Design such as the use of bamboo in large scale fencing in Tripura.
Wilfried Aulbur cited Tata’s Nano car to make the point about India having the necessary innovation skills and capabilities. He believed however that an ecosystem encouraging constant and quality innovation was lacking.
K R Sridhar picked on this point as one of the reasons, along with the availability of capital, for him locating his company in Silicon Valley rather than in India. He also spoke later on about the need to develop rural connectivity and infrastructure to reduce migration to the cities, which he felt was, was unsustainable.
However, S D Shibulal countered with the view that the ecosystem was being built and of paramount importance at this stage was investment and access to relevant education.
Bill Rusitzky spoke of issues such as (lack of) intellectual property rights and piracy hampering innovation.
Towards the end of the session, J.N Godrej, who was in the audience was asked to speak about Godrej’s new refrigerator - Godrej is using innovative technology and materials to build a refrigerator tailored to meet the requirements of a rural population and run on limited infrastructure.
The discussions continued even after the session was over. Through two panels over two days at Davos, enlightened thoughts on India’s development had been aired and debated upon with Indians, expats and foreigners joining in with equal enthusiasm.
Nilav Bose is an MBA student of the London Business School. This blog represents his own views.
Photos available at INDIA Future of Change's Facebook site.
However, the discussion on design, innovation and entrepreneurship in an emerging India, which featured panelists Paola Antonelli, Wilfried Aulbur, Bill Rusitzky, M P Ranjan, S D Shibulal and K R Shridhar, as moderated by Tim Brown, drew a very strong audience.
The topic on ‘Design, Innovation and Entrepreneurship – Change Drivers for India’s Inclusive growth’ was a vibrant discussion on innovative design and ‘out of the box’ creativity to reduce the costs of India’s growth and frugal engineering making the benefits of this growth accessible to a wider swathe of its people.
M P Ranjan spoke of the challenges faced by his design students in finding acceptance for their designs, a lacking ecosystem and among other things, creative initiatives from the Indian Institute of Craft and Design such as the use of bamboo in large scale fencing in Tripura.
Wilfried Aulbur cited Tata’s Nano car to make the point about India having the necessary innovation skills and capabilities. He believed however that an ecosystem encouraging constant and quality innovation was lacking.
K R Sridhar picked on this point as one of the reasons, along with the availability of capital, for him locating his company in Silicon Valley rather than in India. He also spoke later on about the need to develop rural connectivity and infrastructure to reduce migration to the cities, which he felt was, was unsustainable.
Bill Rusitzky spoke of issues such as (lack of) intellectual property rights and piracy hampering innovation.
Towards the end of the session, J.N Godrej, who was in the audience was asked to speak about Godrej’s new refrigerator - Godrej is using innovative technology and materials to build a refrigerator tailored to meet the requirements of a rural population and run on limited infrastructure.
The discussions continued even after the session was over. Through two panels over two days at Davos, enlightened thoughts on India’s development had been aired and debated upon with Indians, expats and foreigners joining in with equal enthusiasm.
Nilav Bose is an MBA student of the London Business School. This blog represents his own views.
Photos available at INDIA Future of Change's Facebook site.
Friday, January 28, 2011
The short view from Davos - India and the future of change - Part 1 of 2.
This afternoon (1/27), India Future of Change organised a panel discussion in Davos on the sidelines of the World Economic Forum. The panel, moderated by Martin Wolf of the Financial Times, featured heavyweights from the Indian and international business community including Dr. Montek Singh Ahluwalia, Dr. Raghuram Rajan, O. P. Bhatt, Doug McMillon, Beth Comstock and Prashant Ruia. It was attended by more than 100 eminent business personalities and academia from India and abroad.
The discussion revolved around the theme of 'How will India grow faster than China? - What can government and business do to make that happen?' was quickly broadened by Dr. Montek Singh Ahluwalia to what the Indian government is and will be doing irrespective of the path taken by China. He spoke about some of the issues that currently occupy the thinking space of the Indian government and policy responses. Taking a cue from this start, O. P. Bhatt spoke in detail about the sustainability and quality of current Indian growth rates. Challenges, he said, exist in areas such as the relevance and focus of the current education system, the waste generated by growth, inflation, and the size of the Indian banking system. It was interesting to hear the head of India's largest and most important bank declare that Indian banks do not have the size or the critical mass for the economy to sustain 7-8% growth in perpetuity.
Dr. Raghuram Rajan was very focused in his comments— stating, he believed, that there is no comparison with China, and that the current perception of the India’s 'Hindu growth rate’ risks falling back to the 3% levels of the 1980s if structural changes in the fiscal system are not implemented in time. India, he stated is 'running out of time'.
Prashant Ruia spoke about the vibrancy and positive outlook of the Indian manufacturing sector. His views were unique as being the only panelist to have a direct interest and background in Indian manufacturing.
Doug McMillon spoke of the importance of India to Walmart, the venture with Bharti, some of the current initiatives such as talent hiring and training, and some of the obstacles faced by foreign retail due to current policies barring FDI in the sector.
As a business school student invited to attend the conference, it was heartening to see seasoned executioners from the frontlines cut through the hype that frequently surrounds the Indian growth story and to provide critical insights into issues affecting policy, business, execution and sustainability. We now move on to Day 2 and our next theme on innovation, design and entrepreneurship.
Nilav Bose is an MBA student of the London Business School. This blog represents his own views.
Photos available at INDIA Future of Change's Facebook site.
Photos available at INDIA Future of Change's Facebook site.
Wednesday, January 26, 2011
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