OPEN FORUM

New Delhi, 30 November 2007

Managing New India

TURN CHALLENGES INTO OPPORTUNITIES

By Dhurjati Mukherjee

India is in focus. It is emerging as an important destination in the international arena: not just in the political sense but so also in economic, trade and other sectors. And in recent times, this is getting more pronounced. The phenomenal economic upsurge, rapid scientific advancement and a vibrant democracy have all combined to give India a special status.

However, while the country is being looked upon as an emerging super power, it has enough problems which need urgent attention. These include: a sizeable population below the poverty line as well as one which is struggling for a dignified existence; a backward agricultural economy with low yields in most States; indebtedness of the farming community because of non-recovery of production costs; lack of adequate public infrastructure in rural areas and an uneven economic and social development.

The country, therefore, faces enormous challenges, which need to be converted into opportunities. The big question is: How to manage the ripple growth? And whether it would turn into a wave and re-invigorate the society, the polity and the economy?

People from all walks of life, politicians, industrialists, economists or planners, are assiduously debating the pattern and strategy of inclusive growth to manage the challenges of a new India.

Additionally, there is a school of thought amongst development economists and social scientists which is severely critical of the present growth strategy that ignores the interest of the poorer sections of society in its bid to ensure high growth rates. The present privatization and liberalization may have some positive effects, benefiting the upper echelons of society but the poor and the deprived have not gained in any way.  

In such a situation, one cannot deny that with a growth rate of over 9.3 per cent and an investment amounting to over 33 per cent of the GDP, India is the flavour of the world, with all attention focused on it. This was evident recently at the 34^th convention of the All India Management Association (AIMA) held in Kolkata in association with the Asian Association of Management Organization (AAMO).

The country came in for praise from delegates representing management associations of Philippines, Hong Kong, Malaysia, Pakistan, Singapore, Mauritius, Japan, New Zealand and Sri Lanka. Various speakers spelt out what “Managing New India,” would need.   

The tone was set by the former CMD of ONGC and AIMA President, Subir Raha, who focused on three distinct drivers of growth --- the need for managing change, managing global aspirations and managing hope. He emphasized the potential of Indian companies to grow internationally and gain importance, without any appendage to MNCs.

The Government of Hong Kong’s (Special Administrative Region) Secretary for Security noted that India is the second fastest growing major economy in the world. Apart from its thriving IT sector, the country has shown growth in its cultural progress, which has truly caught the eye of the world. 

Similarly, a senior global adviser of the MNC PWC International lauded India’s growth and development, especially in the past six years. “We have seen acceleration in FDI in emerging economies and India is not just receiving FDI but Indian companies are also investing in other markets,” he observed.  

According to some, post-merger integration would be a key driver of growth in the country, given the increasing trend among Indian corporates to enter the global M&A (merger and acquisition) scene.

The biggest challenge faced by the Indian companies in this field would be in the area of soft issues involving people’s resources. Another area where Indian companies need to build up strengths was communication. And here too the future is encouraging.     

A head of another Hong Kong-based company was all for cooperation between India and China and the role Hong Kong could play in it. He felt that both the countries had a great potential in their respective fields and should learn from each other to excel in different sectors.

A professor from the Seiki University of Tokyo saw the most important challenges for India lying in the sphere of population, poverty, illiteracy, corruption and over-regulation. He suggested that for long-term growth, India should look at the global market and work on becoming an export-oriented country. That the country is destined to become a global economic power was echoed by all speakers.

The fact that the Asian giants --- China, Japan and India will be among the top five economies is well known. Trade pacts are being negotiated among these three countries and the ASEAN to create a pan-Asian market of over three billion people. Thus, if one is looking at growth, the focus has to be obviously on Asia.  

In addition, there is need for more Indian-Chinese cooperation as also between India and other Asian countries. It is being felt that even though presently India is running a substantial trade deficit with some Asian countries, including China, it would need to be corrected at same point.     

Inclusive growth is another issue which needs to be addressed. For example, the SAIL CMD, S. K. Roongta, sought that education and literacy should be continuously enhanced to support India’s growth.

In a similar vein, the Ministry of Statistics & Programme Implementation’s Secretary, Pronob Sen, regretted that only a small portion of Indians are enjoying the benefits of growth. There was need for corporate India to have the vision to look at rural and tribal India as partners for their own success, rather than just consider them as mere sources of resources.

Another proposal mooted was to have a common minimum programme to revamp the whole political system. Not only do the democratic institutions have to be strengthened but also better quality people need to enter the political arena. This is evident from the recent SEZs policy, which was not being implemented in the right manner. There was neither any land use pattern study nor any rehabilitation strategy.

Importantly, building a new India calls for not just corporate growth but also an integrated approach whereby urban, rural and tribal India and its population could benefit from the fast pace of development. Though there is no definite strategy, it was heartening to see corporate bigwigs talk of development of the rural areas, an area which they exploit for its natural resources.

Regrettably, there was virtually no talk about corporate social responsibility and what the corporates intended to do to develop social infrastructure of the country. Recall, the recent announcement by Prime Minister Manmohan Singh of the ten commandments of social responsibility. Wherein he asked the corporate world to share a part of their profits for the poor and deprived sections of the society.

This was necessary to ensure a balanced growth in the country, to uplift the lower segments of the society from poverty and squalor and enable them to lead a human existence.

In sum, there is need to ensure that the poor are not deprived in the quest for industrialization and urbanization along with maintaining a high growth rate. In managing new India, it would be imperative for the private sector to take up at least some social responsibility. --- INFA

(Copyright, India News & Feature Alliance)