 Carnegie Endowment, and it is my great pleasure to welcome all of you here today, and a special pleasure to welcome India's Finance Minister, Moon Jayapur. One week ago today, I was in New Delhi for the launch of Carnegie India, our Endowment's Sixth International Center. We could not have asked for a warmer welcome from the President, Prime Minister, and our many other friends and partners across India. And we could not have asked for a stronger endorsement of the logic and purpose of our new endeavor. The logic is fairly straightforward. In the 21st century, no region will be more consequential for global order than Asia. India's rise is an extraordinarily significant feature of that new landscape. The same is true with a strategic partnership between India and the United States, a partnership between the world's two largest democracies, two of the world's largest economies, and two countries that, for the first time in history, have a deep stake in each other's success. India plays a critical role in nearly every region and issue of consequence, from the future of democracy to nuclear non-proliferation, great power of politics to climate, and the impact of technological innovation on international affairs. Having India's perspectives will be essential to meeting these and other challenges head-on. Carnegie India's purpose is equally straightforward. It is an Indian institution, led by a prominent Indian strategist in Rajamohan and staffed by the most promising young Indian scholars and practitioners. Together, they'll focus their initial efforts on three areas. India's political economy of reform, its foreign and security policy, and the role of innovation and technology in India's internal transformation and international relations. In each of those areas, Carnegie India will benefit from the perspective of other Carnegie centers, just as our other centers will benefit from Carnegie India. Together, the growing Carnegie platform can help thinkers and doers alike make better sense of an increasingly disordered world. The theme for the Carnegie India launch was India as a leading power. In a country where there are even more opinions than there are people, and there are a lot of people in India, there is one proposition that goes undisputed. The essential prerequisite for India's success abroad is its economic dynamism at home. One of the people chiefly responsible for delivering that dynamism is Minister Jaylain. When he assumed the finance portfolio in May of 2014, India's economy was defined by slowing growth, large deficits, and high inflation. Two years later, the picture has changed considerably. Under the leadership of Prime Minister Modi and Minister Jaylain, India is today the world's fastest growing major economy. Inflation has moderated, and the government has remained committed to an ambitious deficit reduction plan. Just weeks ago, Minister Jaylain presented his third budget since taking office, a budget that seeks to ensure that India remains on a sustained trajectory of high and inclusive growth. The minister's task was significant, especially at a time of fierce global economic headwinds, fierce regional headwinds, and the equally fierce political headwinds that are the mark of any large and complex democracy. While the challenges are indeed significant, the opportunities for India's economy are vast. I'm confident that if India builds on progress to date, the opportunities for India as a leading power and partner in the region and in the world are equally vast. I'm hopeful that Carnegie India can play its role in helping India seize these opportunities, and I'm grateful that Minister Jaylain has kindly agreed to share with us his views on the road ahead. So please join me in welcoming Minister Moon Jaylain. Ambassador Burns, Ashli Talit, half of the Carnegie ladies and gentlemen. Let me at the very outset, congratulate Carnegie for opening its office in India, your most recent expansion. I'm sure we'll see more of you in India, because I do believe India also has an important story to tell. You rightly mentioned two years ago when the present government in India had taken over, the situation with regard to India looked quite challenging. And since then, the global situation has never been helpful. It's in this adversity that India really has to chalk out its own plan for growth and to stand out itself. When I look back, besides the global factors, I think two areas where we did in the recent past before the government took over, the government was considered at that time not to be decisive enough. Enthusiasm with regard to India was waning off because policy changes which could have been possible. I think in the political model at the time which the government had adopted were not fast enough. The direction was not clear. And when I say the direction was not clear, it was really concentrated in terms of going back to where India was in the 1960s and the 70s, where you started concentrating on distribution or redistribution of the existing resource rather than concentrate on increasing productivity and improving upon India's very potential. And therefore I think even before we've completed our first 24 months, we've been in office for a little less than the 23 months, the key emphasis I think have been three. The first has been decisiveness, the second has been consistency in terms of policy direction, and the third important one has been transparency in functioning. Now if you elaborate on each one of them, which I'm sure in the course of the interaction I'll have a greater opportunity of explaining, I'll just confine myself to a few brief comments in the opening. There are a series of steps consistently which the government has taken one after the other. But the most important point is that all these are aimed in one direction. All governments commit mistakes, but in terms of the economic direction, this government is yet to commit its first major economic mistake. In terms of not having reversed the direction, having maintained the direction, column writer, the editorial comments can always say is a big bang idea, not possible. And if you look at the totality of various policy decisions which have been taken, I think India is passing through one of the most significant phases in history. And I would say if 1991 was perhaps the most critical one, next only to that phase, the kind of decisions which have been taken, this becomes the most important and critical phase. We've opened out and opening out in an economy where there was a conventional resistance to opening out, I think has been significant. The second important aspect of that opening out has been that there is a very large body of politics and popular opinion in India which supports this reform process. Normally in democracies which have a very large population still living in poverty, the resistance to reform is very high because a large number of people have not benefited from them. But I think we are at a phase where public opinion also is getting restless, they want things to move faster. So if we see sector after sector, the economy has opened out, it's opened out to international investment. Some conventional conditionalities which used to be there have all been removed. And I think the most important aspect of this has been that not at one stage has there been any resistance or even a sectoral protest from any section of people. And I think that's the high point. India had a reputation for not being the easiest place to do business in. Now this was contributed because of several factors. And I would suggest that three important factors in this which were holding us back. One, we had a bad image because of corruption. Two, our procedures were too long-winded. And three, even if the government of India wanted to reform, the actual business activity had to be in the states. So some of the regions were not cooperative enough. I think there are the significant change which has taken place is, one, a lot of transparency has come into the system and every decision has been in the direction of eliminating governmental disclosures. And therefore, you have a government which is operating, which is now free from any kind of needless controversy, is a government where decisions are not questioned for being for collateral reasons. And I think the second important aspect is that most state governments, the pace may be different, are now competing with each other to make sure that the first right of investment comes into their states. So it's not only the central government which is in the processes. You don't have to wait for investment clearances or environmental clearances now for years. It comes within a matter of weeks, you don't have to follow up permissions. The regions also, the regional governments also are competing with each other. And therefore, there is a kind of a competitiveness between the states. I've been almost visiting every alternative state in India which now tries to move global investors through investment meets. I think that second hurdle also is gone. The procedural hurdles, I think this is work still in progress. How to shortcut those procedures? Have we completely overcome it? The answer clearly is no. But I think there's a great movement in that direction which is going on. Central government has become much easier. State governments are trying to cut short their procedures like single window, etc. And I think the movement seems to be in the right direction itself. Elimination of government discretions, I think the courts, the other democratic institutions which are washdog institutions have also had a lot of role to play in this. And therefore, the tendency of governments not to hold power in themselves and allow market mechanisms to take decisions. Allocation of resources, natural resources. I think this is all a movement where discretions are an area of the park. And therefore, nobody can now come and try and even make a suggestion. Because the political establishment really hasn't kept that power in its own hands at all. The global situation not particularly helpful, and therefore, impacts on currency markets is always there. But of course, one aspect which has helped us, and I think which is very significant has been the oil prices. And therefore, India has intelligently used that resource which came into our hands. We didn't pass on the entire benefit to the consumer. Instead, keeping environmental reasons in mind and also reasons of public finance, the government kept a significant part of it in terms of revenue. And even therefore, in an adverse global situation, our revenues available with the government saw a significant improvement because of this. The resources saw, and most of these resources have been diverted towards the social sector and infrastructure creation, as I will just explain. Taxation, we have two kinds of parallel approaches which is still work in progress. The direct taxes, I think we are rationalizing a lot of them. India had earned a bad name for institutions like the retrospective taxation, I think these are all issues of the past. And with every reform which is taking place, we are bringing the taxation downward, our personal taxation rates are probably one of the most competitive ones in the world, so that taxpayers have a lot of extra money to spend. Additionally, as far as direct taxation, corporate tax is concerned, I have already announced that I am in the process of implementing, in some limited areas it's been implemented, to bring down corporate tax down to 25% while phasing out all discretions and exemptions of the government. One of the big major indirect tax reforms, the goods and services tax, is still held up in the upper house. I think the numbers are changing and I'm trying to be in touch with the only party which is in opposition to the proposal in its present shape, not opposed to the idea itself. And I do hope to see it being cleared very soon. Subsidy rationalization has been a great unsung reform which has taken place. And now this has, it's moving from sector to sector. And the direct cash transfer, which is now supported by the recent legislation which we passed, is enabling us to target the subsidy only to those who need them, leave out the leakages and save a lot of revenue so that it can be directed towards the sectors of the population which really deserves it. The two main gaps in our economy, one was the agricultural sector. And last two years particularly saw a very bad monsoon, a weak monsoon. And therefore while other sectors were doing relatively okay, the agricultural sector had suffered. And this impacted on rural economy which impacted on rural purchasing past which in turn impacted on the overall growth rate itself. Our 7, 7.5% growth rate range of the last two years could have been significantly higher but for this inadequate monsoon in the last two years. Hopefully I've seen in the last two, three days the prediction seemed to be much kinder to us this year. And if that were to happen, we are capable of doing significantly improving upon our growth rates itself. And therefore one of the important emphasis has been to divert a very large part of our resource into agriculture itself. So areas like building rural roads, irrigation, electrification of every village in India, a huge provision for rural housing, interest, subvention for farmers, crop insurance, very radical crop insurance scheme for the farmers. These are various ways of empowering rural India. And I think realizing that that's one weaker segment of the economy itself, this priority spending is going to probably remain over the next few years itself. Infrastructure, I think to make use of the current economic situation and improve upon India's infrastructure because our needs for infrastructure spending, some of people have calculated them as to a phenomenally high amount over $400 billion requirement, a kind of resource which we don't have. So a very large part of the public resource is being put into infrastructure. Our national highway program which had almost was paralyzed when the government took over 23 months ago, I think has started moving again. It's again turned into a big success story. And our target slowly is moving towards what was an incredible target of building 30 kilometers of highway per day. Today, I checked up the figures, we have about 230 odd highways actually under construction. We've crossed the 20 kilometer a day mark and I'm sure we are moving towards that direction. For rural roads we've allocated between the center and the states this year, three times the kind of resource which we were allocating in the past because this is one area where private sector doesn't invest and therefore public spending itself has to take place. Indian railways has a very significant amount of capital expenditure, a modernization plan. It's a very large railways, a very large number of people use it and therefore the capital expenditure into the railways itself is going up. 25 new airports in the regions to be created. You already have some 60 to 70 operational airports. We have some airfields which are not used and therefore some belonging to the state government, some belonging to the airport authority. We all initiated again, some by the kind of resource our airport authority has, a private sector participation also in the airport sector is taking place. Corporatized ports with a lot of private sector and international investment, smart cities, power sector. Now these are all areas where we've been concentrating on. One big challenge of the slowdown of the past has been that some sectors not only slowed down but they left an adverse impact on the balance sheets of the banks itself. And now this is, and this in its turn curtailed the ability of the banks themselves to lend for growth and therefore besides recapitalizing the banks, professionalizing their management, it's a process which is on. I think addressing each one of those sectors, so therefore the highways, the infrastructure, the steel, textiles, power elaborate steps have been taken. I'm not going into them in the opening statement if somebody has a clarification about each of the sectors, what we've planned which we've been doing. Now dispute resolution in public contracts. Now as a result of a very large number of public contracts remain paralyzed because of pendency of disputes, escalation of cost. And unless an institutionalized mechanism could be brought in, this required amendment to a series of laws which also has India's judicial system very powerful, very independent but awfully slow. And therefore that had to be expedited. So we've amended some of the laws. The arbitration act has been amended to provide for a fast-track arbitration. Every high court in the country, the law has been amended to provide for a commercial division which will be there in every bench, which will be a special bench in every high court to resolve the disputes. You have the insolvency laws is almost in the final phase and I hope to see it being legislated in the month of May itself. Resolution of disputes of large public contracts. Empowering the banks to be in a position to commercially settle disputes. Now there are several other laws which require a significant change and that exercise itself is on. We've significantly empowered the states. So Indian regional governments, which are also very close to the people because they are the ones where the economic activity has to be carried out, a significant amount of resource. Additionally, the restructuring of governmental finances has taken place. So more money now goes to the regions that is available with the central government and I don't grudge it because their ability to spend both in the social sector and otherwise is also significant. I think what's before I conclude besides the normal campaigns the government takes up. I think the financial inclusion program of a government which includes bringing in and preparing India for a larger social security system which was erstwhile absent. We are in the initial stages. I call it the initial stages because when the government took over 23 months ago, most of India was not even connected to the banking system. So our financial inclusion to include the 42% not connected to the banking system has been extremely successful. So everybody virtually has been connected to the banking system. That was a campaign which succeeded. Offering them low cost life insurance policies, accident policies to people to make them aware of this, particularly the poorest in India, I think the numbers itself are staggering. You have almost 20-21 million people who are connected to the banking system. You have about 11-12 million people who are, I'm sorry, 110 odd million people, 210 who are connected to the banking system, 110 who are connected to these insurance policies. We've started funding the unfunded sections of the society because the system to give jobs to all. I think in terms of micro and a slightly higher than micro financing, the first year itself has been extremely successful and we are relying on this experiment considerably. Concentrating on social sector for health schemes for the weakest one third of the Indian population, crop insurance for the farmer and I think overall how does it look like when I see the global situation and India in that global situation. First year we grew by about 7.2, 7.3%. This year hopefully it looks like 7.5, 7.6. With a better monsoon prediction for the next year, we could improve upon that. Fiscal deficit, we have taken up this additional expenditure stuck to the targets and I think that's something which has been globally recognized and well appreciated. A country which had 5.5, 6% fiscal deficit down now this year targeting 3.5%. Current account deficit very well under control, inflation under control, interest rates going downwards. So each one of the macroeconomic parameters has its own story to tell. How do I see the, what are the variables and that's the last point I have to make. I think amongst the variables the first of course will be is growth going to return to the rest of the world or not and that of course will determine whether the wins are favorable as far as our own economy is concerned. Are they helpful or do we still have obstructive wins ahead of us? Which way do the oil prices at what prices oil stabilizes I think is a second variable. Monsoons this year is an important variable and hopefully if we have a good monsoon as is being predicted then urban demand in India has moved up that will significantly push up rural demand and presently the growth driven by public finances, public spending, foreign direct investment, record high, urban demand and some sectors in the private sector areas. Telecom has been doing well, pharmaceuticals have been doing well, auto sector has been doing well, the IT, the startups have been all doing well and I think if rural demand improves we could see that impacting on other sectors of the private sector also because the private sector is still a little overstressed and once that stress dilutes itself, I think India could hope to better its present growth rate which currently is around seven and a half and I do hope any of these variable factors moving in a favorable direction we could see the much better next one or two years as far as Indian economy is concerned. Thank you. Thank you. Well let me join Ambassador Burns in welcoming you again to Carnegie. It's always wonderful to hear you speak and today you provided an incredibly comprehensive overview of the Indian economy. I want to congratulate you actually for the two years of quite remarkable domestic economic management. As you've pointed out many have argued that India success in the last two years has been a function of a favorable international environment, low oil prices, low commodity prices and so on and that's true but that the same could be said for many other countries in the world which haven't done as well. So if India has actually managed to sustain its growth rates despite what has been a universal benefit to all then there's obviously something that you are doing right and I hope you keep on doing that. I'm going to open this conversation to people in this audience because I know they are very eager to talk to you but I want to start off by asking two or three questions which I think might set the stage for the discussion to follow. You emphasize quite rightly that the reform program today has reached the stage in India where there is no sectoral resistance, that people see the merits of reform and are willing to support the government in the efforts moving forward. But it appears to me from the outside that one of the impediments to sustain reform is still politics that very often the opposition to reform now is less on its merits and more because of a political resistance to success. We saw that very clearly in the case of the GSD even though as you and even there were specific issues in contention. When you look at the next two to three years how do you see the political landscape in India and how does that landscape offer you opportunities or constraints? Well I think it's also will depend on the kind of discourse and the direction to the discourse and its quality that we are able to get. So far I haven't seen in terms of politics serious challenges in terms of which force or rethink. I don't think that's happened and even in the GST while there is of course an impatience as far as government is concerned and those supporting the GST is concerned. I can tell you politics is working the other way. The only group which is creating an obstruction faces daily criticism for having opposed it and they are on the back foot to rationalize why they are trying to suggest oh we are not opposed to the GST we just want one assurance we just want one factor change. So they're searching for arguments. I think the difference between 1991 and 2016 in India is that in 1991 what does opening out mean India had not foreseen the advantage and if I put it bluntly in political terms having grown in a Nehruvian regulatory environment we only understood the benefits of regulation and it's post 1991 when India started feeling the benefits of under regulation and now we've gone through 25 years of that the body of public opinion that supports reforms is much larger than the one which opposes it and therefore even in states erstwhile held by left parties and others I can see a change in vocabulary I can see a change in idiom I can see a change in the virtues of inviting investment simplifying procedures. Don't forget actually that not a single law in India has had to be abandoned because of political opposition. As a democracy you have your own pulls and pressure which takes times some get delayed more so today this is the only one which is hanging for some time and I can tell you it won't hang for too long. So would it be safe to say that as one looks you know over the years to come that economic liberalism as a worldview as an agenda is now the dominant philosophy of managing the economy in India. Well I think I'll partly amend what you say there would be an element of liberalism there would be allowing people unleashing their energies and allowing them to grow but because there is a principal object of even reducing and eliminating poverty the entire economic planning will need a social conscious and therefore you will have to always keep one fact in mind does it create jobs does it help India's villages does it help in and therefore is the new resource being used for the underprivileged and therefore the element of compassion or a social conscious will have to temper whichever way the economic planning helps and I think that that will be always particular of a model for a country which started with a very large population below the poverty line. When we were in Delhi for the celebrations surrounding the launch of Kanagi India Jan Sena made the point that the government is moving in the direction of being simultaneously pro-poor and pro-market and it's a theme that obviously has a great deal of resonance for those of us who live in this country because the history of this country has been the progressive triumph of development through the market. See and I you see when I when I made an opening comment about what went wrong you see what happened in India in the 1970s the Indira Gandhi days the government of India concentrated on redistribution of existing resources whether it was able to even do that or not itself is a question but it didn't concentrate on increasing productivity and therefore while India happily grew at 2 to 3 percent which you used to refer in this part of the world is the Hindu rate of growth and we thought by just slogans of redistributing that resource could be very popular politics and that's why I've always called the 1970s and 1980s as the wasted decades of India's economy and that's where we've learned our lesson and therefore post 1991 when you started concentrating on increasing productivity, increasing more resource, generating more wealth and then trying to redistribute it the model is not that it'll redistribute on its own the enrichment of the state then has to be passed on to a particular section and I think that's a particular of the Indian model itself. So let me ask you two questions so you are suggesting that there are really two tasks at one level you have to increase growth in order to sort of enlarge the pie which the state then has to redistribute to the deserving sections two questions there one does the state as you see it have the institutional capacity to undertake the kind of targeted redistribution that is meditated that's question one and two does the state today have the capacity to undo some of the mishaps of previous years? I think I think if you saw a connect between what I said and that precisely answers your question what does the entire rationalization of subsidies remains now look at what we've done petrol diesel linked to the market cooking gas the rich get eliminated the poor are we and now you have about almost 140 million get that cooking gas subsidy directly into their bank accounts so we've been able to save about 25 percent by a more transparent process which was coming being wasted on leakages we've been able to eliminate a number of people now the number of people we are eliminating on the top this year in the budget I've announced that five crore which is 50 million families in India which is almost 20 percent of India the lowest 20 percent of India who still depend on the traditional cooking mechanism of a chula you burn wood or you burn coal and environmentalists and health experts have indicated that using that mechanism is as bad as smoking 400 cigarettes and therefore we've used that saving by eliminating the top layer to gift the more modern equipment to the weakest 20 percent now that's a part of the budget scheme so you are taking away the resource from top which was being wasted which was an unfair subsidy and you are now subsidizing these people so it's targeted secondly this entire emphasis on spending in the rural areas what are we doing we've selected 18,000 villages in India which don't have electricity and we've given a target till 2019 that each one of the villages will have electricity out of 18,000 we've already crossed five five and a half thousand and I speak to you so the number is far reduced and we are probably we'll do it ahead of that target now we are making sure that by 2018 every village in India is connected with a regular road the next by 2022 you are creating a provision from the the resource that people get housing what is after all this clean India Swachh Bharat campaign that the prime minister has launched to make sure that every village home has a toilet the farmers get interest sub vented now this is these are various instrumentality or the crop insurance which is substantially supported by for the small farmer by the state itself now these are various instrumentalities we have created because that's where one of the big bits in the economy is and therefore what we are now saving from the oil prices I could have been a reckless populist and said well everything is passed on to the consumer and the consumer of oil is normally a wealthy person by Indian standards so rather than pass it to him I've passed on part of the the advantage to him he's got part of the advantage the other part we've taken out and just put it into this area and I thought that was much better in terms of the economic model that India needs and it satisfies both the economic requirement as well as the social requirement but let me ask you the other part of the question which is as you are trying to undo the legacy issues that you've inherited what about the huge challenge of disinvestment the enormous pool of public enterprises that may not be as productive as rationalized as their counterparts in the private sector now you've set yourself some very ambitious disinvestment targets for the coming year what is your own sense about the market's ability to generate those kinds of returns that we're looking for you see this is an area where we run into challenges not because of any kind of for political resistance but because of the global economic situation for instance in the first two years in terms of sheer volume of what we've disinvested and don't forget these were two years where the markets were extremely volatile and therefore you have to be very careful I can't sell at very low prices we've still managed to divest more than what most governments have done it in the past in fact the best model came in the watch pie government and in these two years I've already in terms of quantity raised more money from divestment than the ones which we raised even during that six year period but that's not enough you see there would be some strategic disinvestments in some cases in the budget this year we've said we may have recycling of assets taking place you can segregate an asset and sell it what has held us slightly back last year was a number of companies which were on our disinvestment plan are in sectors which were globally doing very badly and therefore when the global markets are not in the best of health as far as those sectors are concerned it was probably not the right time to divest I'm going to end my conversation with you in a minute because I want to give others a chance but there is one last question which arises from what you just said when you look out a decade or so from now what role do you see trade and India's integration into the global trading system paying in terms of vision for long-term growth we have Fred Bergstein in the room here whom I'm sure will ask you some pointed questions on the subject but when you think of India's opportunities with respect to the external sector how do you see India fitting into the evolving trade regime and what is that impact on India's own growth but I think that's also an area where the Indian mindset is evolving you see for two good reasons there was a time let's say even two decades ago where we always looked for shields to guard us against any form of opening out and otherwise the fear of the unknown was very vital for us I think over the last few years not necessarily the last two years even before that as Indian economy is becoming bigger and bigger I think India has now evolved its own role and therefore to be a world player whether it was the environmental meet in Paris or otherwise to find solutions to the current two issues of impasse which do come up there are sensitive sectors like agriculture in India which will still remain a little sensitive but I think India's FAMO open and FAMO globally integrated I think and you saw that and what's worrisome if I may say so is not economies like India becoming protectionist it's it's it's the world's powerful economies becoming protectionist I think this is where two will tango right I'm going to open the floor just identify yourself and keep your questions as precise so we give the largest number of opportunities sadhana and just wait for the microphone please thank you thank you and welcome back to Washington minister thank you for that comprehensive overview my question is not about the change in India and it's more about change in the thinking of the BJP as you're aware for a long time the BJP was a party that had some ambivalence about foreign investment there was a very strong Sodeshi lobby but we've seen that one of your government's big successes has in fact been attracting a very large amount of FDI could you speak a little bit about the changing thought process about FDI within the party that has allowed you to do this you see I think it's not necessarily within the BJP but across in the political spectrum from right center left you've always had this tendency to initially think that well your own economy must do well and that created all these what I referred to as the fear of the unknown phenomena if you if you read memoirs of different people in relation to what prime minister Narasimha Rao and then finance minister dr. Manmohan Singh did the biggest resistance then came from within the congress party in fact in one of the meetings of the congress working committee dr. Singh found himself virtually without any support and he had to really tell them that I'm taking the country to a much better path and he couldn't convince anyone to which it's curiously reported that the only person who supported him at that time was Manishankar Iyer I still don't understand the reason why did that or if it is true now having said this I think there is a big realization as we evolved and that's what when I answered Ashley on the issue of trade the starting point for any economic activity is investment and and in a developing economy like India there are inherent limitations as far as availability of that investment is concerned and therefore look at look at look at look let's look at a sector which is benefited greatly from foreign direct investment the auto sector in India now we've seen an economy a closed economy pre 1991 where we had to do away with those two or three old-fashioned car models in India and then suddenly when you opened out you've had India becoming a manufacturing hub Indian industry itself at least near Gurgaon near Pune near Chennai now all these auto hubs coming up hundreds and hundreds of companies making parts coming up lakhs millions of jobs being created in the sector and I think these success stories also not only have they brought a political realization in the political class but I think they've also helped us in safeguarding against any possible political opposition and a case in point in recent years is insurance the sector was investment starved and therefore you had objections coming from one group or the other and eventually everybody opened up I remember when during Mr. Vajpayee's government some of us suggested opening up the defense sector it was like opening out a sector which what are you doing and then finally we started communicating this time and I increase the FDI limits in the defense sector I had to simply communicate in parliament and say would you prefer buying 100% of your defense requirements from foreign governments and foreign companies or you'd rather have a company manufacture it in India with foreign equity participation and foreign technology and we didn't have any opposition and I think Indian politics is mature enough to eventually accept some of these arguments and now the states are saying please come to my state and set up a defense unit yes it's okay it's okay it's okay Mr. Dave Sutton from Lockheed Martin you mentioned in your comments in fact I think it was the ambassador in a small group I was in was discussing for instance Australia population about 20 million and India has 20 to 25 million births per year so that every year India gives birth to an Australia so a substantial of substantial challenge that still lays ahead that's always going to be there and you mentioned I'm sorry so my question basically is are there you've mentioned 7.5% as a growth rate is the are the low sevens enough and if that's as much as you can prudently count on for instance or assume are there other areas of their efficiencies you mentioned in your three points that processes is certainly something you're focusing on are there some of those or are there particular areas on those that you're focusing on to further this opening up so that these you know foreign defense manufacturers for instance or anyone can come partner and continue to grow so that that underprivileged class can participate not just in redistribution but in actually further growth you see on seven and a half percent by world standards or by global standards in the current situation are we doing well the answer is yes but by our own requirement standards are we doing well enough I think we can do better and that's why in an adverse global situation probably you've settled for that rate but hopefully if any of these variable factors growth returning to the rest of the world at some stage a better Indian monsoon continued favorable environment of oil prices now these are variables and I think the impetus of policy directions in India if the reforms go on because the world has also become apprehensive where they keep their fingers crossed how long will they go on or will Indian politics obstruct and that was actually the first question and I think if we are able to cross these hurdles our ability to do much better would be there is the seven and a half percent satisfy either the Indian government or me or the prime minister or let's say India's political opinion the clear answer is no I think by our own yardstick we have we realize we have a potential in a helpful environment to do better gentlemen who's microphone I accept Sunil Sharma from the IMF for a for a leading power and what I would say an inspiring leading power India has very few universities in in the top 200 to think about total factor productivity in India is also among the lowest in Asia the question I have is that you mentioned very little I know you were concentrating on talking about macro stabilization issues and on the current budget could you say something about human capital development because this sort of speaks to both in terms of growth possibilities it's a quality of growth a very legitimate question this is something which is repeatedly mentioned even within India and though some of our institutions by our own standards are doing well the IIT is the IIMs the Institute of Science the medical institutions but by global standards a lot has to be reached and this year therefore in the budget we've announced an initiative which the concerned departments are going to look at that to 10 government and 10 private sector educational institutions to be selected on merit and then prepared to actually become global institutions in terms of quality I think a legitimate question and a legitimate concern an area which was not on the agenda we were satisfied that the IITs are very good by Indian standards but are they amongst the world leaders they produce some of the best students and therefore for the first time this year a special provisioning we've made let's start with 10 private sector and 10 governmental institutions and take them in that direction I'll give you the last question absolutely briefly because I know the minister has to leave Mr. Minister it's a pleasure to see you again Fred Berkson from Peterson Institute I'd like to try to maybe wrap it up by pulling together a couple of things that have been raised actually raised the trade question you suggested that attitudes were changing positive attitude toward reform you mentioned at the outset find that area as well and now suggested the need to get the growth rate up even further question is whether you have seriously considered trying to get that additional boost to growth from new trade initiatives because that's been a tried and true strategy elsewhere China did it here did it Taiwan did it Mexico did it and particularly to get the kind of increase in manufacturing output that you need almost surely is going to require a sharp increase in exports into a hopefully more hospitable world market so as you think about rounding out your strategy getting now those extra dimensions is that something that commends itself and something you think could be added in the politics of what we know in this country as a contentious area and is always difficult to carry forward I think it does I think it does and the fact that in this otherwise globally adverse environment by putting some domestic policies in place using our investments and surpluses cleverly we managed to sustain some growth one of the biggest areas of worry has been the declining exports both value terms and volume terms I think the global situation has impacted on that and therefore I'm sure to us in the political system in the government what you've indicated now makes a lot of sense sense on behalf of all of us we the the minister has a very hard stop because he has to go to a series of meetings of the treasury but on behalf of all of us mr jetty I really want to thank you for clarity and candor and you have always been very welcoming of us we've come to them Carnegie and me personally and I want to invite you you have a podium here anytime you want to come back delighted to see you and I want to wish you and your delegation all the best for the discussions in the next two days thank you all