You are currently browsing the monthly archive for November 2009.
The sessions continue to be informative and vibrant. As some of the brightest minds from around the planet ponder the future of India and her role in the new world order, it is impossible not to be impressed by the optimism radiating out from this conference. This is in stark contrast to what I’ve been hearing in the western world for the past eighteen months. Some of the comments I’ve heard either in conversation or from their speeches:
C.K. Prahalad from University of Michigan’s Ross School of Business and ranked by Fortune magazine as one of “the world’s best minds” had this forecast for India in fifteen years – “India will have 500 million skilled workers and become one of the major knowledge bases for the entire world. She will be home to 30% of the Fortune 500 and 10 Nobel prizes will have been awarded to Indians.” Impressive and if proven true, astounding.
Predictably, a lot of conversation has ensued about the aggressive GDP growth projections. Ashok Jha, Chairman of MCX-SX said that disinvestment in the profitable public sector enterprises will help reduce the fiscal deficit substantially from the current 6.8%.
Tejpreet Singh Chopra, CEO of GE, India expressed concern for the 300 million people that are expected to join the workforce over the next few years. The service sector growth has flattened a bit and there is only so many jobs that the agricultural sector can add. Therefore quick investments are required in manufacturing, infrastructure and power to provide meaningful employment to this massive new workforce.
Kapil Sibal, the Union Minister for Human Resource development in India added another perspective. He said, “sixty three percent of those who pass high school go to college in the US. That number is fifty percent in Europe. In India it is an abysmal 12.5%. We have to increase this quickly to sustain the 9% GDP growth we all talk about.”
Raghuram Rajan, Professor of Finance at the University of Chicago’s Graduate school of business had a different kind of prescription. He used the example of the iPod to illustrate it. “The iPod costs around $200. Of this amount, $50 goes to China for manufacturing. The remaining $150 rewards innovation, design, advertising, financing, etc. India should focus on these services that envelope the core cost since the ROI is greater and more sustainable.”
The leaders were not shy about speaking about obstacles. Kamal Nath, the minister of roads & highways said, “We are not only the world’s largest democracy. We are also the rowdiest.” Although the government has a publicly stated goal of laying 20 km of new road per day, he said that they have only achieved 10% of that but the streamlining of processes and the cutting of red tape has significantly increased that pace and he was confident that they will achieve the stated rate by the middle of next year. “I no longer measure my life in hours and minutes. I measure it in kilometers”, he joked.
The 2009 WEF was inaugurated this morning in New Delhi by the Prime Minister of India, Dr. Manmohan Singh. Dr. Singh, the primary architect of the new Indian economy was very upbeat about the prospects of the Indian economy in 2010 and beyond. He felt that India responded to the economic crisis better than most other countries. If there is a normal monsoon next year (the Indian economy has a direct correlation to these seasonal rains), he expects GDP to grow by 7% next year. His medium term objective continues to be 8% to 9% growth per annum. Since the domestic savings rate is an astonishing 35% of GDP, he believes that this is a feasible target. “India looks to the future with confidence and hope. We are better placed than any other time in the recent past to push reform forward. I hope to see India as one of the leading economies of the world”.
In “The India Competitiveness Review 2009″ released especially for the WEF, N Ramesh Rajan and Jairaj Purandare of PWC India report that “Indian CEOs’ optimism extends to the country’s broader economy as well, with nearly two-thirds expecting recovery, defined as stable and steady growth, by the middle of 2010. Indeed, more than one-third of CEOs believe their industry and the country’s economy have already recovered or will have by the end of this year.
“Indian chief executives expect their greatest international competition in global markets during the recovery to come from China (34%) and the EU (15%)…. And the US, headquarters for 140 of the Fortune Global 500, was only named by 6% of Indian CEOs as their greatest international competitor”.
Over the next couple of days I plan to spend my time with these CEOs to ratify these statements.
