India - US ties will shape economic policies globally
November, 17th 2010
This years India Economic Summit is being held immediately after the historic visit of President Barack Obama. The US Presidents visit has set the stage for the Summit. In his speech to the Indian Parliament, the President emphasised that India will be an important global economy of the 21st century and the US-India partnership would be decisive in shaping global economic policies. I would like to highlight five priorities that, in my opinion, we would need to act upon if India is to realise its potential as a global economic power.
The first priority is governance. When we speak of good governance, it needs to stretch across the entire fabric of the country and be embraced at all levels political, business, social and cultural. The Right to Information Act is one of the most significant pieces of legislation enacted in this country. It has resulted in greater accountability by the government and has empowered citizens in a meaningful way.
The next generation of political leaders in the country has also begun to emphasise good governance by giving administrative responsibility to persons who are clean, capable and who can deliver. On the business side, CII, the countrys leading industry association, has played an important role in formulating a model code of conduct and urging member companies to commit to best practices in corporate governance. The issue of governance is both complex and critical but it is a challenge that we need to confront across the board. While we have made a good beginning, there is still a long way to go.
The second issue that we will need to deal with is that of growth and development. Rapid economic growth is an imperative for India and it can be enabled only through fast infrastructure development. We have a serious infrastructure deficit and this gap needs to be closed urgently. We need more roads, railway lines, airports, seaports, electricity, urban infrastructure etc.
The resource constraints for creating such massive infrastructure can be addressed through public-private partnerships, including those with foreign participation. Because of its sheer size, the infrastructure opportunity in India is one of the most exciting in the world today and has the potential to attract very large investments. Our challenge is to keep our policy framework simple, transparent and hassle-free to give investors confidence to make long term investments in the country.
The third and fourth issues are interconnected and relate to inclusiveness and education. Growth and development would result in large employment opportunities in the country. These can help in mainstreaming a large number of people and integrating them in shaping a new India. However, a large majority of these people need to be equipped with modern skills and capabilities, which is possible only by bringing education to their doorsteps. The government has earmarked considerable resources for education but the challenge is so immense that it will need participation from all segments of the economy. My personal experience in running an Industrial Training Institute (ITI) in rural Maharashtra, in collaboration with the state government, has been very satisfying and the model that we have created is now being replicated in other parts of the country.
The fifth issue pertains to sustainable development. We are committed to meeting our commitments regarding the environment by taking steps to reduce carbon footprint and other deterrent measures to control pollution. The automotive industry, for example, has been quite proactive in leveraging indigenous innovative capabilities to develop hybrid vehicles. My company Bharat Forge has tied up with KPIT Cummins and we are now fairly close to introducing a transformational hybrid solution in the market. Several other companies in the automotive sector and various other industries have taken similar initiatives and the results would gradually emerge. However, these efforts need to be encouraged and incentivised by the government.
The World Economic Forum has been one of Indias staunch partners in facilitating Indias integration with the global economy. My company is honored to be a Foundation Member of WEF for the past 25 years. We are confident that as the Indian economy moves to the next stage in its evolution, WEF will continue to support us in our journey.