New Delhi: India is on the move like never before. The reform process started with the liberalisation of the economy in the 1991 is bearing fruit today. And the most significant consequence has been the emergence of a new face of entrepreneurship. At CNN-IBN, we call this the birth of a Young India.
Sixteen days before the Union Finance Minister rise to present the Union Budget 2007, things have never looked better. The economy is growing in about 9 per cent, the industry is scorching at a growth rate of about 11 per cent, and in the second week of February, corporate India has sealed up deals in excess of $25 billion.
In that context, CNN-IBN's Shirin Bhan spoke to a large group of representatives from the Corporate India's GenNext on CNN-IBN’s Special Show Rising India: Corporate India's Generation Next to find out where they see the economic blueprint of India in the next the couple of years. It was the largest congregation of corporate leaders in Indian television history.
Has the reform process largely favoured the rich and corporate India?
In the spot voting, 70 per cent voted "yes it has favoured the rich and corporates", 22 per cent said 'no' and the rest 7 per cent opted for 'can't say'. But what can be done now to achieve equitable growth?
According to Ratul Puri of Moser Baer, "It takes time for reforms to trickle down. So, it's a part of what we would expect. We can't say it has not percolated down fully. But I am one of the people who say it has percolated down because certainly there is increased prosperity. Yet, there is much more that can be done. The government needs to focus on education — primary education as a critical area. The government needs to focus on infrastructure and basic healthcare. There are many such areas that the government should be focusing on."
But has it favoured the rich?
Veneet Bajpai, CEO of Magnon Solutions "disagrees with that." "Today, you see hundreds of entrepreneurs who have come up in the last 10-15 years. There has been fantastic growth. There have been stories like Infosys, they were not rich people when they started. I was not a rich man when I started my company. So, I really think that the post-reform phase has not favoured the rich."
But don’t you think the way the Indian entrepreneurs flourished actually had more to do with their entrepreneurial spirit, per se, and an open economy, not so much the way the government has looked at it?
"Maybe it is," accepts Veneet Bajpai. "But why didn’t that drive happen before 1991 and why is it that a lot of people find it far easier to raise money, to get funding today. It is an overall framework, which has become very positive. And I really think the government has given a real push to entrepreneurship, which is lot of these."
Sunny Bhatia, CEO of Colour Kraft, says: "I firmly believe that it has definitely favoured the rich. The moment we go to a bank for the finance of any project, the first question they ask is do you have a property to mortgage. And that's the only condition you get finance on."
How can we bridge the urban-rural divide?
Rahul Munjal, CEO of Easy Bill offers a solution. "I think you can target the rural, you can target the masses and you can make business models out of it. We have done it in Easy Bill. The more services you see coming and targeting the masses, the better it will be and the growth will be inclusive."
We have talked a lot about public-private partnership, haven't seen it work very well in a lot of the sectors. Can we look at beyond a CSR model, can we look at a sustainable model on how corporates can actually help bridge the divide and partner with the government?
"One of our clients has been doing it for some time," claims Abhijeet Virmani, Director of Positron Advisory Services. "It's a case study which everybody knows about. It's the E-Choupal project of ITC. That model has started working, the procurement works beautifully. They have been distributing to farmers everything right from motorcycles to insurance products to fertilisers. There is a model, which has started to work. And they have shown the way, other companies need to follow," Virmani argues.
Since corporate India doesn't really need much help in terms of what the government policy should do as long as the government stays out of business, should social sector spending be the big idea for Budget 2007?
As many as 72 per cent said 'yes', 28 per cent said 'no'.
Anurag Mehta, Director, Positron Advisory Services, however disagrees. "I think it's a fallacy to believe that the right channel for spending money in social sector is the government. In fact, the government is the most inefficient allocator of resources. It's not about the outlays, it's about the outcome and they have never got the outlays right anyway. The government needs to create an enabling environment, in which other mechanisms work and not actually start collecting taxes and funds," he reasons.
Supposing that the delivery mechanism is not with the government, who is going to fund this?
"The government can do funding directly. But what they need to do is actually create an environment in which private enterprises thrive, the self-help groups thrive and the NGOs thrive — or by definition, the non-government sector can do a lot. But the enabling environment is not there," Anurag observes.
According Pooja Jain, Executive Director of Luxor Group, "It's good to say we will put X-hundred billion dollars on this. But how are they actually going to actually execute that is the issue. The concept of public-private partnership should actually work like our companies. They should actually hand that over to the entrepreneurial set-up, which is actually accountable for registering profitable growth, putting up people together and not bureaucracy running it."
Anuj Gupta, CEO of Final Quadrant, says: "I believe charities and grants don't build businesses in countries. If you look at the Gramin Bank projects in Bangladesh, in one of the speeches he said, I am going to replace the traditional cow with the phone. And he said communication leads to connectivity leads to dependence, specialisation and productivity. The broad thought from the Indian landscape has to be on not giving grants, it has to be building independent centres of excellence where people can find a certain way of working around the unit, the gadget, the centre and looking at that as a revenue model for themselves and creating a decentralised self-contained force in itself."
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