Debating India's place in the world: Nasscom ILF 2011

by Abhinna Shreshtha    Feb 08, 2011

Nasscom ILF 2011The Nasscom India Leadership Forum 2011 kicked off with a high-profile panel discussing India’s place in the changing world.

The first session of the day boasted of an august speaker lineup including Raghuram Rajan, Eric J. Gleacher distinguished service professor of Finance at the University of Chicago and honorary economic advisor to the prime minister of India, KV Kamath, non-executive chairman of ICICI Bank and Swaminathan Aiyar, consulting editor of the Economic Times. The session, which included a panel discussion on ‘are global economies showing a sign of healing?’ was chaired by Kris Gopalakrishnan, founder & CEO of Infosys Technologies.

During his keynote address, Raghuram Rajan opined that the time had come to scrupulously clean our macro economic policies with the key being tax reforms and fiscal policies. India needs to get rid of inefficient subsidies and start thinking about real disinvestment, he said. “We have far too many people stuck in agriculture. It is high time that we move this class of workers to other sectors like services and industries. We need to create jobs in these sectors and along with it build infrastructure to compliment the agricultural growth. We cannot afford to be late to the emerging market party and they are not going to wait for us,” he argued.

Education and proper re-distribution, according to Rajan, is the way this change is going to occur. In fact, almost every speaker in the sessions today, highlighted the need for a proper system of education that would be available for everyone in the country.

K V Kamath too, talked about the need for structural changes on the business front and the huge opportunity lying with rural India. “Technology will distinguish the change that is happening in India,” he said. “Growth has normally been led by the service sector with manufacturing always playing catch up.” To give an example, he talked about the economic reforms that took place in the early 90’s and how it has led to development today.

The last panel member to share his thoughts was Swaminathan Aiyar who gave his arguments on why India has a lot of potential for growth on a global scale. According to him, the US is bound to lose its current economic lead in one way or the other. He highlighted China’s domination of commodities, as well as the rise of Asia and other geographies like Africa and Latin America to support this view. He also opined that the European region’s political instability would also hamper its growth and this will only create opportunities for us in the future.

“There is a material intensive demand. We need to have domain knowledge of other countries. The emphasis today is on alternative energy sources, for example, natural gas has a huge potential,” he said. However, he cautioned that to take advantage of the changing global scenario, India Inc. would need to focus on workforce and skill set development. We also need to prepare ourselves for a high inflation era, while creating a flexible manufacturing policy, he added.