A safety net of ideas

Updated: Dec 1 2008, 05:17am hrs
An insiders look into the complexities and opportunities that make up India today, Nandan Nilekanis Imagining India: Ideas for a New Century is the latest, and arguably the most comprehensive in a series of books exploring the psyche of a nation. Describing himself as a mercenary reformer, this still very much an IT giant says his book is a timely one as it comes at the end of the period that saw India grow almost on a global liquidity steroid, and the withdrawal of which will force the nation to look at growth fundamentals.

Dividing the book into four parts, he goes from ideas and concepts that India has by and large accepted from the need for democracy to English as a ticket to a better life, on to ones that are still contested, energy and environment presenting passionate arguments for his case. He makes a strong case for reforms and remains optimistic about India, with its unique strategic advantages being able to meet the aspirations of a young population with growing desires. His safety net of ideas include a wide range from inclusive democracy to low carbon economy, and a immense world in between. Pragati Verma and Suman Tarafdar met him to understand how they can be part of the transformational changes sweeping India.

Your book is comprehensive in the way it has looked at the challenges facing the country. Which are the biggest challenges

The first part of my book has ideas which are recognised. There is no debate on them. In the next part, the critical element is implementation. We make a lot of noise and promises, but things dont get done or get delayed. That is endemic to our situation, though there have been exceptions. The third section is a little more difficult as that is where we argue. Thats because our fundamental mental models are different the way we view caste, and reservations as a way to make up for injustice done. Then it is about higher education, which is completely mixed up. We have licence permit raj square in this space. Thats a debate.

Labour reforms is another issue. There is no point in having 93% of our workforce in the informal sector as we have made our laws so bad that everyone tries to ensure that they do not have permanent labour. It suits everybody to do this the unions like this model, the businesses like them. We have to introduce labour reforms and create government programmes. These ideas have to be quickly resolved. And then they have to be implemented also. If we implement this part, then growth will happen. But is not enough to have the economy growing, as we have to look at other problems. And in this section I dwelt a lot at what has happened in developed countries. We have the advantage of looking at their development cycle and taking care that we do not want to repeat those mistakes. In health, there is no point in going from hunger to heart disease. The pension system is a challenge, and then we have the energy issue. We need a low carbon model of growth as we are not going to have all that coal or oil. Water situation is in a mess. Our procurement methods have created disincentives to grow anything but wheat and rice. The whole thing needs to be thought through very strategically.

The state could, perhaps should have done all this. Do you think the state could have done more

The state has done a lot. The creation and sustenance of democracy etc are remarkable. This is my safety net. If a large number of people read it and endorse it, that itself becomes a safety net. I hope this will guard us against inadequate political leadership. We have a young population. The voting dynamics will change. The younger generation is far more exposed. They have huge aspirations and will make the change happen.

But not you You have called yourself unelectable in the book. Are you frustrated

Not at all. I have tremendous respect for politicians. There are a few bad apples, but most work very hard. They are working within the limitations of their system. My book is a sort of unifying book. We can always play up our divides. We have to have framework of hope and aspiration, and I have given that. My view is that if Indian political entrepreneurs are smart enough, someone among them will take this as their mantra.

Do you see Bangalore as a major power centre

Bangalore is at the cutting edge of what is happening in India. The whole issue of urban renewal started in Bangalore. Karnataka was the first state to vote after the recent delimitation. An organisation called Janagraha is asking everyone in the IT sector in Bangalore to vote. It is Indias most globalised city. More people from the city have travelled abroad because of the nature of the beast. You can get by speaking English in the city. It is a meritocratic city. It can be the role model for urbanisation in India.

How do you see the IT sector grow globally

Global crisis will have an affect on IT. And it will affect growth rates. But the fundamental long term value proposition and long term abilities that firms like Infosys have in India will only get better. I am optimistic in the long term, but certainly the next few quarters will be very challenging. But I also make the point that technology can be used in the transformation of governance. There is a need for information infrastructure identification of citizens, land records, financial accounts for every citizen. This is fundamentally structural, and will allow you to leapfrog and give our democracy a competitive advantage.

Has the Indian tech sector adequately focussed in these

Thats not true. IT has made the automation of the banking sector in India possible. Stock exchanges are done. The electronification of domestic election system has happened.

Will the domestic market become more important, especially in the near future

Certainly. We are basically focused on banking for the last 20-odd years. Now we are looking at other sectors. But it will not be a substitute for global markets.

You have played a major role in building the India brand. Is India still a disruptive force

Oh, absolutely. The disruption has happened. That is why multinationals located in the West are expanding so fast here. Now we need to see how to use this disruption to provide better transformation.

Is the current slowdown a hindrance for the IT sector

In the short term the companies are in a freeze mode. In this environment, nobody is taking a decision about what to do in the next few weeks. But its a matter of time before this crisis gets over. The problem will get fixed, and then the value proposition will again start growing.

You mention in the book about how the crisis of 1973 propelled sectors like biotech, electronics and IT to come up. Will the current crisis too have opportunities

Technology and innovation will have a major role to play. There has to be a judicious mix of the market and the state. The state should define the boundaries of operation, within which markets will operate. That boundary is defined as regulations, rules, incentives, laws. The big things are going to be in energy, for one. A low carbon economy will require extraordinary leaps of innovation. In health too, the old model is not going to work. We will have to build a new paradigm of hub and spoke. Infosys is also working on such projects.

Are the challenges facing the world and India similar

We cant say let us grow without caring about environment. We cant say baad mein dekhenge. Thats not going to work. There will be resolution on environment issues with Obama coming in. Obama has said he will work on it. Europeans are ready to move if the Americans will. India has already committed that its per capita emissions will be below that of the developed countries. India too has to ensure a low carbon strategy. A global deal should not be used for local arguments.

How do you see Barack Obama in respect to the outsourcing industry

Obama is a pragmatic person. The thing is to continue to create value to ensure that there is demand for our services. For offshoring, we have to look at how we will grow in this environment in the short term. For long term, the fundamental strategy continues to be unabated.

What are Indias current strategic advantages

Our strategic advantages currently are unparalleled. A young population, entrepreneurs, English as a language of global business, technology savvy population, deep democracy, extremely well placed globally. We shouldnt mess it up.

Going ahead, where do you see India in the fraternity of nations

Global crisis is a turning point in the rebalancing of global power. That the recent meeting was G-20 rather than G-8 was because they realised that the latter was no longer a representative grouping of power. Institutions we created 60 years back are archaic. UNSC, IMF and World Bank need to be revamped. The short term solution is to fix the global economic crisis, but in the long term we have to articulate and implement the rebalancing of global power.

How do more Indians feel part of the mainstream

Middle India is where the problems are high population growth, low infrastructure and jobs, politics of revenge. The Green Revolution was a remarkable achievement. After the initial success of the Green Revolution, after reaching self sufficiency, we took the eye off the ball. UP and Bihar missed out on the Green Revolution, and the ones that followed in milk and IT.

Will change come as people are becoming more aware

Peoples aspirations are rising. English is a good example of that. Many states abandoned English teaching over the years, but are coming back to it. This has not happened because politicians said we should learn English but aam aadmi said he wants to learn and would do it anyway. People discovered that by knowing English, income went up four to five times.

Are more reforms the way forward

Reforms should happen. For a labour rich country, it is a bit daft to look for capital intensive solutions, but laws regarding labour are such that nobody wants to get into trouble. There is this confusion that reforms are for the rich, are pro-business. Reforms have been happening and nobody is taking credit for all the reforms that have happened. Reforms are about improving access, and that is very pro-people. Reforms need to be carried out in their entirety. Markets, urbanisation and education are still the best way to solve issues. Markets allow us to dissolve caste.

Would you have preferred if this book had come out a year earlier

This book is much more relevant today. The reactions have been pretty positive, though there have been a few quibbles.