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[Music]
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the 2009 Wharton India economic Forum
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titled India the road ahead took place
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in Philadelphia and brought together
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CEOs of leading Indian companies
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investors heads of nonprofit
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organizations Sports celebrities and
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Bollywood stars to discuss where India
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is headed in an age of economic
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uncertainty Indian knowledge at Wharton
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brings you one-on-one conversations with
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these leaders thank you very much an for
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that very kind introduction uh Nandan
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welcome to uh Warton India economic
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Forum very happy to have you here thank
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you mul it's great to be here uh so
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before we start talking about your book
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which is 531 Pages we'll try and cover
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it in 20 minutes uh I just wanted to
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tell you a small incident that happened
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the first time that I visited infosis I
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had come to meet one of your colleagues
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MH and it just so happened that the week
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before I came to Bangalore I was in
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Bombay where my mother lives and one day
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as I was walking about at night I
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stepped into a pothole and I fell
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down and as you know I'm not a very
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light guy so I I fell on my hands and
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fractured my Wrist all right so when I
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came to infosis and met your colleague
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he saw that I had a cast on my right
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hand he said what happened to you and I
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said I fractured my
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wrist how did that happen said I said I
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think it happened because the world is
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not
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flat I asked him to pass on that message
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to you I don't know if he did he didn't
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mention okay all right all
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right anyway uh from uh Thomas
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freedman's book to your book uh I I I I
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I should start by saying that it's I I
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really really enjoyed it very much oh
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that's great uh but I was very curious
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about one thing you know when normally
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when company CEOs or chairman or
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co-chairman write books they tend to
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write either about their biggest
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deals or they write about their
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perspective on management Theory or
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philosophy you wrote a book about India
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why well uh you know I I I wanted to do
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something different and uh you know my
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role in the last several years has been
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going around the world and uh uh you
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know projecting India in in global
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forums and all that and uh you know I
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was not able to answer a lot of
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questions that people would ask me they'
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ask me why why is it that you have uh
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such beautiful campuses like infosis and
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such large slums why is it that there
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are so many billionaires and so many
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poor people why is it that uh you have
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all these educated people in technology
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and the world's largest elited
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population you know why is it that you
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you guys seem to coexist in the 17th
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century and the 21st century at the same
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time so that s of and I was not able to
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give very convincing answers so I felt I
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needed to get down to the bottom of why
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why why are we the way we are the other
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important thing I felt was that uh uh
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India was you know at a very small
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window of opportunity it had this huge
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demographic dividend and this young
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population but uh you know that
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demographic dividend could well become a
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demographic disaster if we didn't make
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the right investments in our human
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capital and I felt that window of
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opportunity was ebbing by so I felt the
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need to put it down and say hey guys you
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know we have this beautiful opportunity
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let's not mess with it and also I found
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that a lot of books on India were
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written from a particular perspective
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and E Economist view or a sociologist
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view I felt that to really get give
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India its due you had to take a much
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more holistic look at it which is why I
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looked at it from all these angles I
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interviewed 126 people wow including
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people from IC Bank mhm and uh uh it's
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really a sort of a composite of all that
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right well uh well it clearly shows uh
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one thing I wanted to ask about the
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introduction is you say that the most
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important driver for growth lies in
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expanding access to resources and
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opportunity as you just said now what do
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you see as the major barriers that block
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this access for millions of Indians and
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how do you think they can be removed
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well one one clear barrier to access is
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education I mean if if you you know the
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the opportunities for somebody say who
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lives in Bangalore and goes to an
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English medium school and goes to IIT is
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dramatically different from a young
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child in a Bihar Village who doesn't
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have a school in his village and
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therefore access to education and
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providing good education in the public
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Space is really very important second is
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access to English you know we have
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really practiced very hypocritical
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policies on English we have denied
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English to Our People and therefore they
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have not learned English and English has
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become the language to participate in
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the global economy or it's access to
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roads you know if if you live in a
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village and you need to go to go to
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school you need to have a road to go to
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school or you need lights at night to
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study very simple things so if you deny
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people these basic instruments of
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Education Health infrastructure jobs
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then you are bound to deny them access
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to building a better life I think I I
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agree with you completely you know
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knowledge at w is a Chinese Edition and
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uh once when I was in China I I met
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somebody there who has a very fast
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growing business teaching the Chinese
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English I was happy to know he was a
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Barton Alam right uh the uh uh well uh
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coming back to the phrase you used the
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uh ear a little earlier the the
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demographic
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dividend uh it's very interesting that
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in the' 60s the India's population was
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seen almost as a burden uh but now you
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use the term human capital uh you know
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to to describe uh India's population uh
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how do you think that uh the Democrat uh
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the demographic dividend divides across
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the country is is it in the same Pace or
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are the regional differen there are
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three or four things here one is that uh
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you know we have you know a demographic
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dividend is typically a point in a
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country's history when the bulk of its
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population is in the working age of 15
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to 65 and therefore they have a very low
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dependency ratio in other words they
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support less people and have more people
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to work and that's typically the Golden
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Age of Any Nation because you have more
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people working you have more creativity
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and so on and India is very fortunate to
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be having its demographic dividend now
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and it's the only country in the world
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which will have its demographic dividend
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so it's not only a young country with a
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dividend it's a young country in an
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aging World which opens up even more
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strategic possibilities uh but actually
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India's demographic divid is not one
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curve there are two curves there's one
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curve which was in the South and the
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west of India which is almost fully
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absorbed by 2015 the South and the West
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will start uh aging and there's a second
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curve which is in Middle India the
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central states of up Bihar chhattisghar
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orisa all Madia Pradesh and that is
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going to be the real demographic the
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next the next demographic bubble so
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unless we address very fundamental
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issues in that region of education and
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access and all that that that's really
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going to be a big challenge because
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today you see for example so many
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problems of uh migrant workers coming to
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Mumbai and and the reaction to them what
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you're seeing is really a small part of
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what will happen if we don't address
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this very quickly because in the years
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from 2001 to 2025 only 12.6% % of the
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new population in India is going to be
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in the South 50% is going to be in the
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northern states so there's a huge you
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know difference because fertility rates
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in Kerala today are like a West European
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country you know it's some onethird of
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what it is in utar Pradesh so we have to
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understand these nuances of what's
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happening to really think of what we
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need to do and how do you think the
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second bubble can be addressed you know
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it has to be addressed by expanding
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access to that young population uh it's
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about you know improving the quality of
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school it's about better infrastructure
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it's about job creation there as opposed
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to job creation by migration and uh you
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know all these things we don't have much
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window we have window of maybe four five
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years to pull it off right because
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otherwise the pressure of uh the
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disparities will will go up even further
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right you know very much like the issue
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of the population where there's almost
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been a sea change uh in the way the
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country has t about this issue which you
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address in the first part of your of
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your book uh the other issue like that I
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felt was the the assumption that was
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made soon after Independence that India
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needs a democratic socialism you and and
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you you say in your book that there has
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been a similar transformation in that
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thinking with much more accept
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acceptance of business friendly policies
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and and and capitalist policies uh but
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now when you come to a place like the US
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and you look at the mess that's going on
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out here MH and people talking about
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nationalizing ing Banks like City Bank
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and Bank of America do you think this is
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the kind of capitalism what kind of
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capitalism does I think the the message
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in that is that uh you know I think what
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we need to find the right balance
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between markets and regulated Society
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because if you have markets which are
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unregulated and untrammeled and then
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they it can lead to a situation where
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they create you know the kind of
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challenges we have in the US and then
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you have the reaction to that which you
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are seeing today so I think the the
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challenge is to find the right balance
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and I think uh India has the opportunity
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to find the right balance because we had
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wear too much to to one side it doesn't
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mean that we wear too much to the other
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side but strike the right justos of uh
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entrepreneurship business and the
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markets because at end of the day you
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need Market forces and entrepreneurs to
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create jobs to create Innovation to
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create new products and services to
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improve productivity to improve the
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quality of life and so on so you know
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you can't do that with the state but you
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need the state to create a regulatory
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and other Frameworks and rule of law to
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ensure that businesses play within
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within the same play pen so I think
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that's the message from what's Happening
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Here and I think in India India is very
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fortunate that it has I believe the
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largest array of entrepreneurs anywhere
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in the world except the US you know we
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have uh large companies uh in the uh in
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the family sector we have large
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companies in the public sector we have
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large global companies and we have
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thousands of young entrepreneurs so it's
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a very diverse and Rich uh base that we
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need to take advantage of right
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absolutely uh you the other really
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fascinating part of your book uh that I
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found was how you talk about the the
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impact of technology in transforming
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different Industries and also the growth
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of India's it sector uh in providing IT
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services and BPO services to the world
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now amid all this success story Along
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Comes satam which probably happened
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after your book was done what sort of an
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impact has that had is a specific case
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of fraud it happened to be somebody who
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was in the it sector who also got into
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some real estate activities so it was a
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case of fraud I don't think it anyway
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takes away from the enormous uh success
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of what technology has done to Indian
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economy and Society now Tom fredman in
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the blur to your book calls you the
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great explainer what I'm what I hoping
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you will explain to me because I don't
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understand is is how such a huge fraud
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could go on for such a long time uh and
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and when you talk to your clients do
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they see this as an isolated instance or
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is Indian business being T no I think
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absolutely it's seen as an isolated
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instance because uh it's a case of one
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uh one uh entrepreneur going erant and I
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think uh I think it's I guess it's all
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part of what happens in in in in a
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bubble in some sense I mean Bernie mov
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$50 billion scam nobody seemed to know
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about it and some very very influential
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and knowledgeable people seem to have
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put money there so you know it's
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difficult to say where where you draw
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the line on these things right so I
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think uh it was an unfortunate episode
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because we have been trying to project
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India's entrepreneurs as the new phase
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of India and this this incident you know
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took us back because the whole argument
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was predicated on the statement that
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these were you know good honest
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entrepreneurs so it was definitely a
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very uh you know sort of setback for the
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Indian image you want to build but it's
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defitely very much uh an isolated
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instance I think uh you know we we have
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excellent companies today in India which
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are and I think the technology story is
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huge because you know people tend to see
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the technology story as the stuff which
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is to do with Outsourcing which is a h
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achievement but how technology has been
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used within the country is an equally
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compelling Story I mean the fact that
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you have an election coming up next
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month with 700 million voters and 1.1
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million voting machines which are all
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electronic there's no other country in
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the planet which has has gone to
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completely electronic way of voting you
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know what people like IC Bank have done
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using technology I've given many case
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studies in my book they transformed the
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way the common man gets access to
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banking because the poor can go to an
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ATM and withdraw money and there's no
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Clerk and there's nobody who can come in
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the way so I think technology has played
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a huge role not only in the ex external
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side but also
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domestically now
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uh uh I'm very glad you brought up the
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election because towards the end of the
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book you focus on the big issues of the
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environment Health Care education and
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for all this to continue the you you
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need government Buy in to to to make
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these uh goals succeed uh based on that
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what's your prediction about what's
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going there's an election coming up in
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April uh who what do you think is going
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to happen and will India move ahead or
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will India fall back well I have no clue
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what will happen in the elections
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so you must be think have some scenarios
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in mind if if uh Congress wins a BJP
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wins a mayavi becomes prime
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minister well you know even if I have
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scenarios I don't think I'm going to
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talk about them in this forum fair
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enough we'll but but I think I think the
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basic thing is that you obviously are
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going to see a continuing Coalition and
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and this confusing environment and
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that's why and my point is therefore the
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only way to drive unity in this is to
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have a Unity of ideas and that's what
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I'm trying to do that's why I call my
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book a safety net of ideas if you can
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get more people to bind to these basic
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ideas it doesn't really matter what
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combination comes into Power you know
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the the infrastructure section of your
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book is also really interesting and
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there the question I thought about was
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there's so much to despair about as far
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as infrastructure goes but in
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telecommunications infrastructure has
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worked extremely well are there any
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lessons from the Telecommunications
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experience I think I think couple of I
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mean Telecom is a huge story I today we
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talking about 8 million mobile phones a
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month 99% of the mobile phones are
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prepaid which means they're being taken
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by people who don't have a credit
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history and 40% of the prepaid charge is
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less than 10 Rupees a pop which is a
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phenomenal achievement of really
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creating a mass movement I think part of
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it was you know the regulatory
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environment being uh changed I mean
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there are some challenges there but
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still it it is trying to create a
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playing field between both public and
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private money and also I think
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technology played a big role because you
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know you had a huge M law kind of thing
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operating there
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and uh uh but I think there other
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sectors too where infrastructure I mean
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uh airports are coming up the Bangalore
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airport has come up the Hyderabad
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airport has come up Bombay and Delhi are
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getting redone the highways of course it
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did slow down a bit but there's been a
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lot of movement on highways it's I mean
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I the challenge we have it's nowhere on
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the scale and scope of China so we tend
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to compare but I do see a lot of
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improvements in
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infrastructure uh I'd like to ask one
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last question and then turn it over to
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the to the audience uh since your book
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is imagining India
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what kind of an India would you imagine
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for your grandchildren and their
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children well I think you know my point
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in this book is to say that India is at
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a strategic opportunity it's combination
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of its demographics its entrepreneurs
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it's its technology press it's uh
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democracy the fact that the world is
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aging while we are young uh the fact
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that we have English as a language all
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these are very unique attributes that
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there's no other country in the world
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which has those
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and if we make the full use of that I
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think it can become a role model for the
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21st century because you're talking
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about a billion people reaching
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Prosperity reaching uh you know living
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in a peaceful manner in a democracy
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handling extraordinary diversity I mean
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the whole issue today of so-call clash
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of civilizations India has daily you
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know all those civilizations are all
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coexisting so I think the ability to
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show this combination of development
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diversity democracy will really make it
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a very very successful country if you do
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it right but it can also go the other
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way because the same demographic
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dividend if you don't harness our people
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well their aspirations have been
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Unleashed and as they become more
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disgruntled and disaffected by lack of
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jobs and lack of economic growth they
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can also become a huge source of
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violence and divisiveness so we are on
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the razor's Edge whether we go this way
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or that way well it's definitely very
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compelling argument and you make it
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extremely well
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