Tuesday, August 14, 2007

India is the place to be

Young, vigorous and creative at 60

From The Statesman

Last week, the Wall Street Journal carried a front-page story about how Kishore Biyani adapted India’s culture of order-in-disorder to transform his company Pantaloon Retail (India) Ltd. into the largest retailer in the country.

Biyani’s shopping malls are crowded and Indians love them. Unlike Americans, Indians prefer crowded places where they can hear and smell each other. India has reached the tipping point, a state of collective will when the forces of economic growth have begun to dominate society. The call of the marketplace is trumping everything else, including religious and ethnic communalism.

The way to prosperity is not through OBC but through entrepreneurship. For quite some time, India has been exciting the world’s imagination and many investors have begun to have a fresh look at the country and explore its potentials.

Many global investors in fact are excited that there is another avenue of growth and diversification where they can put their resources to productive uses instead of putting all their hopes in the Far East.

International investors want growth with protection for their shareholders and India seems attractive because its legal system, including property and contract law, is well developed. Tata Consultancy Service, Infosys Technolgies and Wipro are not the only companies for which India has become a world leader.

There is the growing field of biotechnology, petrochemicals and pharmaceuticals, where, for example, Dr Reddy’s Laboratories Ltd., Ranbaxy, Reliance Industries Ltd. and others have become international brand names. These companies are creating a global buzz, an image of India that it is full of talented young people, who can perform competitively. India’s self-esteem is rising and so is the motivation to excel.

Today a young Indian with a PhD from an American university may want to work for Chevron but soon he will find that Reliance Petro is much better. He will return to India as thousands of others are doing.

The sentiment that India is the place to be is spreading. India has entered a new threshold of knowledge economy and is gradually emerging as a global hub for specialised knowledge processing for global corporations.

Knowledge economy depends upon extracting and creating new knowledge from data bases and is in a sense value-added outsourcing. Although India is far from becoming a full-fledged knowledge economy, this is an emerging trend, apart from other growing fields such as auto, genetic engineering, and high-tech healthcare that will hasten the transformation of India in the next decade.

Probably the most exciting field of growth is healthcare, which, according to a Confederation of Indian Industries (CII) study, will add 7-8 per cent to GDP and create nine million jobs by 2012. But much more needs to be done to sustain India’s 9 per cent plus growth than giving the industry fiscal incentives by setting up special economic zones.

One of the biggest hurdles for rapid economic growth in India, according to several observers, is the red tape; it takes myriad forms, such as expectations of illegal gratification, fear of the loss of bureaucratic power due to privatisation and apprehensions about foreign direct investment, as the recent protests against the entry of Wal-Mart shows.

The primary goal of rapid economic growth and its ultimate measure is poverty reduction by generating opportunities for employment, especially for the rural population who mostly depend upon agriculture. For millennia rural India has been held hostage to nature’s vagaries, but it need not be so. Technology can break nature’s stranglehold and break its curse on the poor.

Don’t be surprised if the little chirping thing, cell phone, might bring about a rural revolution in India.

Most of the rural workers should be absorbed into agro-industries, manufacturing and service industries, and that again will necessitate massive investment in building new infrastructure and modernising the existing one.

That is why the coming of global retailers like Wal-Mart into India is so important.
Let Pantaloon and Wal-Mart compete for the Indian shopping cart.

Growing prosperity in India and rising expectations abroad “that India can do” are creating compelling conditions for the government to put its act together. India must get out of the political inertia, upgrade its clogged roads and overcrowded airports, eliminate frequent power outages and scuttle the red tape.

India is becoming an integral part of globalised economy and is clearly thriving on the synergy between multinational corporations and its indigenous strengths, which come from a high quality of education from its top universities, democratic institutions that create transparency, and the ingenuity of its people for innovative solutions to complex problems. Ingenuity means transcending a system’s limitations by finding an alternative route to reach the same goal. A creative and ingenious mind becomes restless when he hits a wall and asserts, there has to be another way; and he improvises by transferring intelligence from one application to another. But individual entrepreneurial ingenuity has its limitations.

Bangalore could transcend the limitations of its poor infrastructure, power and transportation by building captive power plants and satellite communications to reach its outsourcing clients in the United States and elsewhere. Now the challenge is whether India’s ingenuity can be applied to undertake collective action to build reliable highways, ports, railroads, power plants and airports. Corruption is a serious problem in every society.

The source of corruption is unaccounted exercise of power, of course. Elected officials can be removed, though one might say cynically, only to be replaced by another bunch of corrupt people. But democracies do have methods of dealing with corrupt people in high places. There is a two-fold solution to the problem. Public accountability through media exposure, especially the Internet and television, as the American experience shows, is a strong corrective. Secondly, privatisation could act as an antidote to corruption because it takes power away from bureaucrats and gives it to entrepreneurs and corporate leaders. But they too, as the American experience shows, abuse power.

Nevertheless, if laws were enforced rigorously, the corrupt would find their rightful place in jails as many American CEOs have discovered. Fighting corruption is a never-ending process, as is the case with poverty. The responsibility of the Indian government is to create conditions that encourage risk taking and reward entrepreneurship.

It is only through free spirited entrepreneurship that India can meet the challenge of becoming India that the whole world can look up to.

(ND Batra is professor of communications and diplomacy at Norwich University. He is the author of Digital Freedom)

1 comment:

  1. Unlike Americans, Indians prefer crowded places where they can hear and smell each other...

    what rubbish!!