The Economist Events’ India Summit convened more than 170 business leaders, entrepreneurs, leading academics and the foremost experts for a full day of fruitful discussions.
Under the theme ‘Setting course for sustainable growth’, the event put the spotlight on how India is performing on socio-economic issues from attracting investment and supporting agriculture to tackling unemployment and reforming energy policies.
The day kicked off with panellists taking a hard look at some of the concerns that need to be addressed to prop up a slowing economy. Sanjay Jha, national spokesperson for the Indian National Congress, reckons, “The government has blown an opportunity and lacks vision. For all the talks of ease of doing business in India, there is a lot of regulatory cholesterol.” What was more worrying for Prachi Mishra of Goldman Sachs was the “consumption slowdown that predates the non-banking financial crisis.”
“The government has the right intent,” said Hemant Kanoria, chairman of SREI, “But at the same time, it should take a practical approach to make things happen.” For instance, “if a person has a pain in the stomach, he is put in an ICU. You can’t have every missed payment classified as a non-performing asset,” citing the growing number of assets that is being slotted as ‘stressed’.
Panellists across the board agreed that grooming talent to make India future-ready was critical. “Talent will be the biggest challenge for technology. There is a need for re-skilling in technologies like artificial intelligence and machine learning,” said Rajesh Magow, co-founder and chief executive at MakeMyTrip. The role of technology in a changing business landscape was reiterated by Padma Parthasarathy, senior vice-president and global head, consulting and digital services at Tech Mahindra. “The pace of change is faster now. Customer demands are no longer based on just their IT specifications. Instead customers come to you to help them solve business problems,” she said.
Also, if “India has to become a $5tr economy, the banking sector has to step up in terms of credit growth,” said Zarin Daruwala, chief executive at Standard Chartered Bank India. But it is not all doom and gloom. For instance, “The cost of labour has gone up in China. A lot of countries are looking for alternatives,” she said. ”India can step up and grab that share. In China, the largest garment manufacturer has a $25bn turnover. In India, we don’t have one (manufacturer) that is one-fifth (of that amount). That’s a big opportunity.”
Despite rising in the ranks of the World Bank’s “Ease of doing business”, India still has a lot to do to cut red tape and bureaucracy. “The transportation and logistics cost as a percentage of GDP is between 12-14%. In efficient economies like Hong Kong, Singapore and many European countries (this statistic stands) between 5-8%. There is a need to bring it down to single digits,” said R S Subramanian, country manager at DHL Express India.
Lastly, economic development cannot come at the cost of social development. “Tackling inequality is the biggest challenge. Last year nine people had more wealth than 50% of India’s population,” said Amitabh Behar, chief executive at Oxfam India addressing the growing divide between rich and poor. “There is an immense amount of discrimination based on caste,” said Paul Divakar, founding member at National Campaign on Dalit Rights, as he highlighted the deaths of Dalits cleaning sewers in India. Vivek Anand, chief executive at Humsafar Trust shared a grim statistic: “65% of gay men drop out of school because of bullying.” There won’t be easy answers to fix such problems overnight. Sound policy and solid implementation will be a small start.