 We have with us today, as I said, a distinguished panel. You've heard Geeta Gopinath, Professor of Economics at Harvard University, Paavan Munjal, Chairman, CEO, MD at Hiram Otakop, Dr. Narshaad Forbes, President of the CII, and Mr. Vinit Nayar, Vice Chairman of Tech Mahindra. We're going to have a free-wheeling conversation for about 40, 45 minutes, after which I'll throw it open to all of you for questions. 25 years after economic liberalization, India is on the threshold of another inflection point. Where do we go from here? To discuss this and more, I'm joined by a panel of experts, Geeta Gopinath from the Harvard University, Paavan Munjal from Hero Group, Vinit Nayar from Tech Mahindra, and Dr. Narshaad Forbes, President of the CII. Many thanks indeed for joining us, all of you. Geeta, let me start this conversation by asking you about liberalization. 25 years, we've done well for ourselves. We've got a $2 trillion economy, fastest-growing economy in the world. What do you think is the next big idea that can sustain this level of growth for the next 20? So that's a great question, because the question is, how do we actually sustain this growth for the next two decades? So among the things that needs to be done is, one, is to continue the emphasis on reforms that have happened over the last couple of years. So we've seen improvement in the ease of doing business, improvements in competitiveness, that has to keep going on. The infrastructure problems have to be solved. At the same time, we need to care about outcomes in education, in health, and in skilling. If we can keep a consistent pace going with all of these different sectors, and if we can somehow manage not to trip up around election times, then I think there is the hope that this will continue. But again, inflection points are best viewed in the rearview mirror, so we should wait before we call this an inflection point. Mr. Forbes, are we at an inflection point, and what can be the next big idea? So I think it's not going to be one big idea. I think the reforms of the last 25 years have really brought us to where we are now, and I think the best is yet to come. If you look at countries that have developed over the world, countries have over many, the countries that have really progressed rapidly, South Korea and Taiwan in the 60s and 70s, say, or China since the mid-80s onwards, they've grown at rates of close to 10% for 20 years. We need to do the same, and when we do the same, then we will actually lift large numbers of people, millions of people who have been lifted out of poverty. The remaining millions who are still in poverty will be lifted out from that kind of growth trajectory over the next 20 years. But it involves a whole lot of changes, and it involves especially a lot of institutional reform where we start working on sectors that we haven't touched that much yet. So sectors like education, sectors like healthcare, sectors that do indeed involve greater numbers in the growth process. This is what's going to drive, I think, and be an engine of growth for the next 25 years, and I think the best is indeed yet to come. Mr. Majal, liberalization, the idea of it really was about unfettered economic growth, ending license, Raj, allowing foreign competition, bringing in capital, there was a paradigm to that, and the paradigm was we will do whatever it takes to make it interesting and attractive for foreign investments. That meant focus on fiscal discipline, keeping rating agencies happy. For the next 25 years, is there a new paradigm? I mean, I haven't done this for a long time. Let me go back 25 years and say that I have not gone to Udyog Bhavan in ages. So we've seen that shift already. Going forward to my mind, while they've both talked about what kind of reforms are required, I think they are happening. I think in the background, a lot of work has been going on in these past two years with the current government. We have not yet seen it come about, but one by one, it's all going to roll out. And I'm very confident, I'm an optimist. I believe that the next 25 years are going to be India's years. Okay. Mr. Agar, one of the critical analysis of liberalization, one topic, one point comes across all the time with that, has liberalization been, has it offered equitable distribution of opportunities? Has this growth been equitable? Has this trickle down really worked? It's obvious it hasn't. The trickle down hasn't worked. There are certain sectors, including the sector I represent, which have had dramatic growth and are now seen as leaders in technology, not only in our country, but almost globally. On the other hand, there have been sectors which have been completely neglected. Clearly agriculture has been one of it. Our traditional engines of growth have sputtered and come to a stop, take, for example, textiles and garments. We are now in a situation, we are Bangladesh, which is half the size of West Bengal, exports twice as much of garments as we do. Have we asked ourselves a question, what has happened? Mr. Manjal is very optimistic as I should be, because both his industry and our industry have done well. But the fact is, we are an exception rather than a rule. The growth has been patchy. And in fact, people who are the most underprivileged have had no participation in this growth. Yes, you will give us indices that, look, the transportation, better roads, bit of green revolution, but in terms of real income, the disparities have grown to a point where they should in a democratic sector be unacceptable. Do you want to comment on this? The trickle-down effect is something debated by economists quite aggressively. Just to get the facts straight, it's certainly the case that we've had many people come out of poverty in terms of our measures of the poverty index. So there has been an improvement in income across the board. What we have also seen, though, is a bit of a tilting. So there has been an increase in inequality. While everybody's done better, some people have done a whole lot better than the others. So this obviously needs to be addressed. And the only way this will happen is I strongly believe, besides the fact that we focus on creating jobs in manufacturing and improving the productivity of agriculture, is to improve the quality of education, improve the scaling in India. I mean, if you look at some measures, I mean, the only measures I know that exist on educational outcomes and learning outcomes, they've actually deteriorated over the last four to five years. Exactly the question I was asking, right? So what can be the big idea that can replace this? The reason why I'm saying this is, again, when you critically analyze liberalization, the criticism is the state has retreated and withdrawn from areas like primary education, health care, social protection. Look at this panel today. Successes are all led by private sector. By when do you think effective governance will keep pace with efficiency of markets? I mean, the reason that you said that the people have withdrawn from the government education is a choice that people are making. People are voting to move out of government schools because they want good quality education and you no longer get it and people realize there are high returns to having a good quality education. So that has to be a focus and really hope, just like we have the ease of doing business and we measure outcomes and we measure what the ease of doing business is, we really should have good measures of what are the outcomes of education, what are the outcomes in terms of health care. And so that in the next many years, while we improve the business environment, we also improve, we see clear improvements in education outcomes, clear improvements in health outcomes, clear improvements in skilling outcomes. In fact, skilling is one area where we've been talking about skill India, but the outcomes are not where they should be. First of all, on the trickle down question. I mean, by any metric, trickle down has worked in the last 25 years. We've taken more millions out of poverty in these 25 years than at any other period in our history. So it has worked. It's worked in terms of reducing the proportion in poverty and it's also worked in terms of reducing the absolute numbers in poverty in the last 15 years. So I mean, trickle down has delivered. The question is not has it delivered, the question is how do you make it deliver better? And you make it deliver better by actually enabling more people to participate in the growth process. And that requires two things. It requires that focus on primary education that Geetha spoke about. And it requires also creating good jobs. And that will come back to the question that Vinit mentioned about the garment sector. Why is the garment sector so important? It's important because it creates millions of good jobs. We have created in India millions of jobs. We have not been so successful at creating millions of good jobs. We've created huge numbers of jobs, millions of jobs in informal services. My favorite example is drivers in Delhi. If you run the numbers of the number of cars that have been added to Delhi's roads over the last 20 years and the proportion that are chauffeur driven, Delhi has created over the national capital region, has created over a million jobs in drivers alone over these last 20 years, that's a lot of jobs. They're not particularly good jobs. The question is, how do we actually create millions of good jobs? Good jobs in manufacturing, jobs where there's potential for productivity, improvement on a consistent basis, that's the challenge. I'll come to that. Sure. Back to health and education in the private sector you were talking about. Not that the private sector can take on health and education for the whole nation, but look at how it's exploding in the private sector now, both health and education. But of course we do need an environment and ease of doing business there to really do a much better job. Let me shift this conversation to us. One of the stated objectives of liberalization was also, in a sense, putting an end to corruption. Ending of license permit Raj was exactly that. The image of putting an ending license permit Raj was this government official taking a bribe. Today there's another form. It's crony capitalism. It's corruption in a three-piece suit, right? Isn't that timing growth? It's hampering growth, for sure. But we've seen corruption go out of, the big-time corruption really go out of at least a lot of the senior position, senior levels. Of course, down the line, as we go down the line, it's not vanished. It's still there, and it is hampering growth. The understated part of this conversation is that what has really come down is governance. Governance. Governance has come down. Why is education not good enough? In fact, it's pathetic. I mean, we are somewhere, you take your choice between second and third worst country in the world when it comes to education. It is not that we are not spending enough money. Huge sums of money are being spent under right to education, and otherwise. Sure, but our schools, government schools, municipal schools, their management has become hugely poor. There's corruption, which we try to put under the carpet. The actual teachers who are getting significantly decent salaries are not teaching. They're subcontracting. Add to that the fact that when the exams come, how do you show your performance? You allow cheating. So these are the understated facts. Why is private sector coming into education? Essentially to fill a vacuum, but private education also is not great at places. I think I am possibly from one of the older generation. I have studied all my life in government schools in remote areas of Punjab and Haryana. It used to be very well executed. It's gone. So that is an issue. How are we going to change it? That is a tougher question. Let me also turn this discussion to another aspect. Geetha, we've seen from an agrarian economy in the last 10 years, India's largely business services-led economy. In the next 20, will services continue to lead it? What do you think is going to be the greater quantity? In terms of numbers, services will remain a big driver. I mean, that's just how economies evolve and that's how India will be. But that doesn't mean that there is no room for improvement in agriculture. There has to be big improvements in productivity. It's still very much the case that agriculture, most of the employment is still in agriculture. The number of bodies working in agriculture is disproportionately high relative to their contribution to growth. So there has to be a way to move those people into other better-paying jobs. And so services is a big part of the Indian economy. Now, manufacturing, kind of more high-tech manufacturing, maybe. I'm a big believer in textiles and the fact that textiles can be a source of big employment for people moving out of agriculture. But yeah, services is a big player. This much agriculture, as Dita points out, is the biggest employer. And it's an important market for automobile companies. Does it worry you that people are not farming anymore? I mean, the primary sector is declining. The contribution is declining. How concerned are you about it? Yeah, I'm concerned because 50% of our sales are in the rural sector, in small towns and rural sector. But I'm not worried people are not farming. I wish there's more mechanization, just like in manufacturing, that we are going in for more and more mechanization and more and more robotics. But the point still remains that 50% of the body's work in the agri sector, while only 14, 15% is contributed to the GDP, we really need to move a lot of those people into manufacturing. Manufacturing contributing much more than the agri sector and manufacturing needs to contribute even more, bring more people into manufacturing from the services too. So my concern is the manufacturing sector, yeah. A question about the manufacturing sector, you know. The theme of manufacturing in the last five, seven years has been one of a, either overcapacity, corporate indebtedness, balance sheets being stretched, demand not being there. Do you see that changing? Do you see the ability of manufacturing to create those jobs? So it's changing now. It's changing as a part of the demand cycle turning. More and more companies in India are reporting good demand on the back of a good monsoon this year, but also on the back of a turn in the overall economic cycle. It's also on the back of good investment in infrastructure by the state. I think all of that is driving an improvement in demand. What hasn't improved yet is private sector investment. And we would expect in CI, we expect that if demand sustains and demand growth sustains through this year, by the end of this year enough capacity would have been absorbed that the investment cycle will also start to turn. And that's the one last remaining piece in terms of having everything pointing up in the right direction. Now, going forward, where do we see the real opportunities in manufacturing? We see opportunities at both ends of the spectrum. We see opportunities at the mass manufacturing end of the spectrum, the textiles and garments and food products and rubber goods and everything, toys and so on, that can create millions of jobs. That requires significant changes in our factors of production, in skilling, in labor and labor reform, in land availability for mass industrialization. But we also see great potential at the other end of manufacturing through much greater investment in innovation by companies. And we're starting to see this now by more and more companies. As more and more companies increase their investment in R&D as they connect better with institutions so that you have greater pull on the research system, we're starting to see that increasingly emerge from more and more manufacturing companies with many Indian companies starting to become multinationals in their own right where they're starting to now build proprietary technology bases that they can then operate with around the world. What about the button there? You need more optimists who continue to invest during these bad slow cycles. What about the technology sector? You've had the technology sector is going through a dramatic transformation. Your sector was responsible for creating millions of jobs in India in the last 20 years. Will it continue to create the same kind of jobs in the next 20? Difficult to say at this point of time. You're seeing two trends which are going in the opposite directions. Clearly, the per capita use in IT industry is going to come down and come down dramatically. On the other hand, the areas which technology will touch is huge and large part which is not there unexploited yet. So it is going to be all pervasive which will require technology which will add to employment. But if I was to make an intuitive call, I would say that we have seen about the highest number of people which this sector will employ. I hope I'm wrong. But you are going to see a dramatic reduction in the employability per million dollars or just think this is going to happen. Sorry, if I could just push that point a little further. So if the skill set is not there, skill sets required for the future is not available, do you see anticipate job losses? Well, people will skill. I have complete faith in the intellectual capability of Indians. We started as basically we used to write code. Today, we are at the most sophisticated level. We have evolved. And that is why Indian IT industry is doing what it is at this point of time. Can I need you, Vanit? Yes, please. I love the idea. Which is, if you take the top 10 IT companies, the top 10 software companies in India, invest 1% of turnover in R&D. The top 10 software companies in China invest 11% of turnover in R&D, right? There's a huge gap there. If you look at the software companies in India, they all say, look, we'll pay software services, businesses, right? But where is the actual technology investments taking place in the sectors? Taking place in startups, right? And I don't see it yet adequately taking place from the major software companies. And I think when the major software companies start investing in R&D and start connecting with the startup companies that are also investing in R&D in a very substantial way, I think we can actually reach a new paradigm of 20-year growth for the software sector, including in employment. You have a point here, and I think all of us are learning lessons. All of us are now funding startups. The nature of startup is such that we don't want it to be drowned in the huge, humongous size of our companies. I mean, for example, we employ more than 100,000 people who are actual engineers. We don't want that to be drowned in that. So that is happening. Perhaps we didn't do it voluntarily, but we see, if we do not move in that direction, we see extinction, and everyone wants to preserve himself or herself. I'm going to shift the focus of this conversation to interest rates and inflation. That's another important debate if you're analyzing the economy. We have seen a new RBI governor, a new monetary policy committee coming in evaluating interest rates. Is the trend for the next five going to be about declining rates and declining inflation? I think I'm going to wait until the minutes of the monetary policy committee come out to make sure that I can use that to predict what's going to happen over the next several years. It's not completely guaranteed for the following reasons. One, because, I mean, one of the reasons that the RBI was able to cut rates is because inflation is behaving itself. But if commodity prices start going up, where, you know, that's not an impossible scenario, it's not going to go back up to where it was before, but even if the trend is that there's an increase, then that feeds very quickly into inflation. The weather still plays a very important role in India. Food inflation, which the RBI has very good control over, has an effect on its headline numbers. So there is no reason to, at this point, think that there is a clear downward trajectory in interest rates. We are discussing the possibility of a rate cut when the world is discussing negative rates. Do you see this sustaining, this debate sustaining, and would India continue to receive the kind of capital flows that it has in the last five years? If there is, if there is the world's highest raising rates? Yes. So yes and no in the following sense. The expectation from the Fed is that while they will very likely raise rates another round before the end of this year, it's not going to be a big jump and it's hardly going to signal that this is going to be a big increase, continue to sustained increase. Secondly, the rest of the advanced world is still very much on an expansionary monetary policy path. I mean Europe and Japan and Japan is trying unconventional monetary policy in ways that pretty much nowhere else in the world is being tried. So there's going to be, I think the world economy is going to be flushed with liquidity. Now there's a huge demand for safe assets in the world. People want to put their money where you're guaranteed to get very safe returns. If India can signal it's one of those countries where somehow these are now safe assets, then the Fed raising interest rates will have minimal impact on the Indian economy. Mr. Majal, when you talk to investors globally, are you seeing the interest to invest directly into India? I mean FDI. The government is doing whatever it can to sort of attract that. Are things changing on the ground? Yes, to my mind, positively, they are changing. And on the interest rates and inflation here, the signaling, at least the signaling is quite positive. And a lot of us believe that going forward, we will see both of them coming down, which in other words is going to bring in more investments. There's no pressure on the RBI. I think we're seeing sustained interest around the world in investment in India. Covering services sectors, manufacturing sectors. Manufacturing is relatively recent. It's a reflection of the Make in India program. Where we're starting to now see interest also is in labor-intensive manufacturing, which is a first. With large electronic assemblers setting up plants in India, I think that's a first. And that's a very productive first for the country. I think going forward. On the inflation and interest rate question, I think the last cut in interest rates two days ago was really a continuation of policies that have been in place for the last almost two years. And I think we should see it in that light. We should see us as a country that is transiting to a low inflation, low interest rate regime. And that transition will lay the foundation for 20 years of growth. Geetha, you alluded to commodity prices. India's fiscal arithmetic looks good purely because oil has been where it is. And even 20 years ago, 91 happened, the balance payment crisis happened because in 90, you saw a huge spike in oil prices. What if oil turns around? And how significant a risk that is to what are we talking about? It's certainly been a plus for India, the fact that commodity prices have come down both on the fiscal deficit and on the inflation end. If and when commodity prices go up, I think that there is some more time before that happens because there's still slowing growth in the world. I mean, with low demand, I don't know where the source for price pressures are gonna come up. But if that turns around, that could have an important effect. But to the extent that there's been moving away from patrol and diesel subsidies, the fact that the government has tried to mark to market at this point, the prices, it should not be as severe as in the previous regime. If there is a turn around, do you think India's better positioned to handle a price shock? So I agree, I think that if there's a, I think I don't expect anything imminent. I think it's a couple of, at least a few years out. And I think in that time frame, we have to have all of these market-linked pricing in place so that it doesn't then start affecting government finances. Will that then have a really adverse effect on the economy if it happens, say, five years out? I think if we've properly connected pricing with the market, it will have a minimal effect. Sure. My views on this are theoretical. I think our interest rates have been way too high to encourage capital formation. Making 10% on business as earnings is a miracle, at 10 or 11% rate of interest, where is the capital formation going to happen? And that is why you have been seeing right through that our actual investment in industries has been coming down. Interest rate has been a very substantial part of it. And let me tell you the way the kind of vicious circle which has been generated, our inflation is low, money moves in, even after converting it, you get a return of nine to 10%. And even if there's a depreciation is two to 3%. So your foreign exchange has remained, the reserves have remained high. But it is basically largely on basis of money which is flowing in into the country, purely because our interest rates are high. I was involved, I was working for the World Bank and involved with East Asia when the Asian Tigers were coming up. I used to head that group. Basically, interest rates, they brought it down. Look at Korea. Their growth was based largely on low interest rates. China, they can determine anything and that is, so that is what encouraged capital formation and increased productivity brought down inflation as is. Now that is one way of going it. We have been going the other way, which is a monetarist way. I don't know what comes out in the wash, but as I said, I am bit of a outsider on the normal discussion, which talks of tiny margins, quarter percent here, quarter percent there. That ain't gonna solve our problem. We are directly impacted by oil and commodities. I think that discussion would be more relevant in October 17 or October 18. Right now, we are pretty much safe. So I'm worried. From now to, let's say, the end of the tenure of this government, what can be the government's priorities? GST is done. Do you think the government will take land and labor reforms head on? I wish they would. Again, for industry, for manufacturing, both are very, very important. And right now, both are hindrances. For expansion, it's so difficult to get land. For expanding, again, your manufacturing, your capacities, labor is extremely, whatever mechanization you do, we still have very large numbers employed. There are lots of issues all of us have. So these two are very, very important, and I wish all of us in CII can push for those with the government. Do you see the government taking on labor, I mean, labor reforms as an issue? So I think the government's position on land and labor reforms is clear. They've said, look, it's politically very contentious, and they find it very difficult to move on land and labor reforms at the central government level as of now. But what they've said very clearly is that, look, we're encouraging the states to move on land and labor reforms. There are now six states that have moved on the labor reform side. There are three states that have moved on the land reform side, some quite fundamentally in their changes. And I think the expectation is that there should be about 10 states in the country that move significantly on labor reforms, 10 states that move significantly on land reforms. And if you have that, you're pretty well done because then you could either say, we will recognize this centrally, or you could simply say, well, okay, all the investment is gonna go to those 10 states and you're still done. So I think that's really the approach the government's taken. I think it's a perfectly effective approach. Okay. Gita, we're gonna have a budget in about a couple of months time. What do you think should be the priority for this budget? I'm asking the context of, the government has gone ahead and done away with the railway budget. There is a view that perhaps we should shake a few things up. Would that change priorities? I don't think this changes priorities. I still think a good budget is one that signals fiscal discipline, that signals transparency, continuity, that there's not gonna be any surprise taxes that retroactively take place. Those would have to be still the main goals of any budget. I hope that there will be a great focus on health and education in the budget. I mean, the GST is a big game changer. So I think at least in the near future, there is some uncertainty about what's gonna happen to the central fiscal deficit because with the center guaranteeing revenues to the states for some period of time, they are taking on all of the risks. So it would be interesting to see how that plays out. Well, last on a question to all the panelists before I open this out to the audience. Risks, we spoke about oil as being a risk. If you look at your businesses for the next 10 years, what are the external risks that you worry about? Well, oil commodities are clearly a risk. Put a huge amount of pressure on industries like us, where pricing is so very key for the consumer. Lack of infrastructure development for my industry is a big one. I mean, I cannot move around in Delhi today. We talked about one million drivers coming on the road. They have come to drive cars and motorcycles. Takes half my day on the road, getting from one place to the other, which is not very productive. Coming back to the budget. Personally, I would want to see a road map and not worry about the budget year on year on year. Every time, it used to be February, now it's going to be January, so we say then wait. What's going to happen in the budget? The customers stop buying, because they are expecting either cars or increasing prices or whatever. I'd rather have a road map for the next five years or 10 years and not have to worry for the budget. Of course, I want to see infrastructure, I want to see scaling, I want to see employment, and a whole lot of other things. Gita, we're also talking at a time when there are rising tensions with the neighbour. Do you think that can become a threat to the growth? Not with the neighbour, not the problems that we're having with the neighbours. I think there are other headwinds that are there in the global economy. The IMF came out with its numbers and said that global growth is going to be lower. I think for the last five years, IMF has been actually more optimistic than the true numbers are. Usually growth turns out to be even lower than the IMF has predicted. There is a real risk to global growth. There is still a whole lot of uncertainty, but what's going to happen in Europe, what's going to happen in the United Kingdom, what's going to happen in Japan? There's no way to insulate India completely from that. While it's true that growth will come from domestic demand, but you can't completely insulate India from it. So there is that particular tension that comes from international markets, and then of course there is a question of what's going to happen to interest rates in the US and its consequences for the Indian rupee. So those risks exist, and those I think are much bigger than the current geopolitical tensions, at least unless they don't escalate much further. What are your mind-key risks right now? I have every confidence that we will do the right things within the country to keep our growth rate sustained at a high level for the next 20 years. We will perhaps do some things later than we should in a more muddled way than we should, but we will do them and do them right. The key risk to me is actually external. I'm very troubled by all of these noises that you hear coming out from around the world that's making the world somewhat more inward-looking, worrying about globalization, worrying about internationalization. And I don't hear any powerful political voices internationally speaking up in favor of globalization. For example, in the entire Brexit debate, all the arguments were, look at the dangers of Brexit. There was no argument in favor of remain. What was the positive argument in favor of actually integrating with the world, in favor of immigration from around the world, in favor of free movement of goods and people? And I think I'm not hearing that voice internationally. And I think if we don't hear it from the West, then we should become that voice in the country. And we should become that voice that's in favor of international markets, that's in favor of globalization, that's in favor actually of us playing a much more significant role in the world in a very, very benign, supportive, integrated, and inclusive way. Well, insofar as our industry is concerned, clearly technology is under continuous movement, whether we will be able to keep up with that and continue to be the provider of technology to all the global economies. That's going to be a challenge. I'm frankly quite confident that we will be able to maintain our primacy globally because this is one industry which has, where India is now being considered as the prime mover in providing these services. Other than that, I completely agree here that, yes, it's a very, we are passing through a very inward looking phase in the world and the current candidate for presidency in the U.S. is no accident. There is a feeling... There will be an accident. If we do that. There is an increasing feeling of vulnerability. But remember that again is a result of technology. The gap between the rich and the poor is increasing. The jobs are disappearing in the U.S. at a very fast pace. And if technology continues at the same pace, you're going to see a huge social upheaval because ultimately the accounting profession is already under huge attack and is diminishing in the U.S. You are going to see the same in medicine and God bless you in the legal profession. Dr. Watson can do in three seconds or five seconds which seven lawyers can do in seven days. So you are going to see the middle class jobs going away. I mean that's the blacker side of technology and that is already happening. I don't know how it will evolve over a period of time. Add to that the fact that longevity of life is increasing. So the productive and the nonproductive segments will see a huge distortion and the quality of life of what we want to do will disappear. Every human being wants to feel useful. Will I feel useful serving hamburgers and McDonald's as the issue? Or that ominous note. Can I open this out to the audience? I'd see far fewer lawyers in the world as great progress. Yeah, that's right. God bless us. Please pass the mic. I think it's a very interesting debate. I'm from La Eco, Atul Jain. I just have one observation which is I'm seeing for the last 20, 25 years. A lot of agrarian society is moving to a lot of digital society which is what is happening. We seem to have leapfrogged what should have been a very natural step to manufacturing and moving towards a big, large SME and large basis. Now that we have become a digital society it's much more chance for government to encourage a lot of manufacturing in India which will actually enable a lot of jobs to be created which Mr. Nair mentioned and Mr. Pavan also mentioned. I think that's somewhere which government has started a bit on the Make in India campaigns. But if it can be energized a lot more you've got global marketplaces now available. If you make something it's much more easier to reach out to the consumers which the digital world has allowed you to do. But can we increase the mid-path? Can we increase the manufacturing where millions of jobs can be created and skilling can actually help which Gita mentioned. Skilling which is acquired but skill a farmer to be able to work in a factory but rather than skilling him to be able to work in a call center. I think that's what I'm trying to say that that step is what we are missing in India. That's my observation if the panel has anything on this I would be worried. I agree completely but I also want to make a broader point which is that sometimes we have in a discussion we like to make it sound like government policy is something that the government has to do. I think we should recognize that the government has no advantage relative to the private sector and picking which industries are going to be the leading drivers of the world economy. They have no special advantage in picking which technology is going to be the one that's going to succeed. So they should really stay out of that business and they should do the basic things which is infrastructure, ease of doing business, land, labor. If you can fix those problems everybody who has a good interest has their own self-interest and will pick the right industry. So we should not phrase this as what should the government do, which industry should it pick, which sectors it should encourage. Yes sir. My name is Amrath and my question is to Pawanji. In the morning John G. Reyes of GE spoke about having a digital copy of all the locomotives which it is going to produce across the world. My question is in the context of changing paradigm in the manufacturing across the globe. People are talking about Google and Apple are talking about making cars. People are saying that engines will be replaced by motors. As Indian manufacturing, are we ready for such changes? How long do you think it's going to take? Good question. Well, many of us are already started to move on that path. As we speak tomorrow Friday when we have our leadership team meeting, one of the two topics is digitization in manufacturing. So if John Reyes is talking about digitizing every locomotive, we are talking about doing our own stuff here. We have taken the first steps and the way a lot of us are in Indian industry, Indian manufacturing, I think it won't take us too long to get there. Whatever the Google and the Apple are doing. Just a follow-up question. That is more coming from the part of financials. I mean, you can go out and buy technologies and stuff which is available. But as far as the skills are concerned, are you happy? Are you content with what you've got available in the market? Well, we've all been talking about scaling. There's a huge gap in scaling. But again, it's not up to just scale India, not just up to the government organization to be able to scale. We have to put our own efforts, our own investments into scaling and some of us are doing that. Even before we set up a manufacturing, we first set up our gurukuls to start scaling people who are going to work in our factories. So I wish many more corporates start doing that and we'll be scaling people sooner than later. Yes, sir. Hi, my name is Arsh Suresh. I'm from the executive search industry. My observation over the last two and a half decades where the reforms have set the pace in India is finally wherever there are good things, like airports have, whatever said and done, improved. The power sector, many places the power has now has wheeled to the grid. The roads and highways have come in in some measure. The underlying phenomena or the model has been the public-private partnership. I'm not saying it's worked nine on ten, but it certainly worked wherever. The private sector is working with government regulation and given a concession for operating an asset for a few years and transfer, that seems to be working. Now, that model needs to be applied to wherever we are ailing, particularly in urban infrastructure. Now, my question to the panelists, the urban services, be it water, be it air quality, be it sewage, be it anything, public education, health, government has to go off. Whatever be the government's great governance and achievement lately, but that's where entrepreneurial quality of India has to come. My question is to the panel, can it not be legislated like that or is there some thinking where bureaucracy has failed? Let's admit the service quality of our urban life is so poor. I can go on and on and we all know that. All of us have examples of how we lead our lives. If I can just paraphrase, you're basically saying the state should exit and the private sector... The state should be regulated. The state should partner. The state has a very legitimate role to play in different sectors of the economy, but it should focus on those sectors. So it does have a role to play in primary education. It does have a role to play, if you ask me, even in higher education in certain sectors, for example in the liberal arts and social sciences, which would otherwise tend to be somewhat underfunded. It has a role to play in those sectors. It has no role to play in airlines. It has no role to play in hotels. It has no role to play in a bunch of sectors where the state by legacy has been active in our country and where it should be inactive. It should exit those areas. Now, we've approached this by letting private companies come in, either by the Indian companies, foreign companies, it doesn't matter, and be active in those sectors and essentially replace the public sector provider of the hotel room or the airline seat. And that's fine. That's a little bit of a fungible solution, but it works, and that's sort of how we've approached it. But the post-crypt is that this government has not talked of privatization at all. I mean, it's a huge source of funds. Why does it the previous one? And it is going to give you a quantum jump in efficiency, but nobody's talking about it, and that's a legitimate question. Why? If I can just take off from what you said, and Keith, perhaps you can answer this. What about areas where, you know, the private sector will not step in because it's not profitable and there's no money and where the state has to be there? How can this... No, primary health care. How many primary health care centers in this country are run by private sector? There are commercial models. There's always a commercial model. Those just get discovered. Okay, I think that's a proper point. I think there is an optimal mix. I think it's very clear that India probably is too much where the public sector exists and shouldn't be in. But there is obviously in matters of defense, in matters of public roads and infrastructure, certain roads and infrastructure in terms of primary health care, primary education. You know, there is an important role to play. But I mean, I agree with also the point that the government's role to a big extent has to be regulated, which is allow players to come in, but make sure that certain standards are met. We may have time for just one last question. Yes, sir. My name is Kumar. Just a question. We of course heard always about socialism and capitalism. Now we say, are we capitalist or a socialist? What is the role of the government in terms of we had mixed economy in between as a way to go? So the question about what government has to do, malnutrition, health population, health problems, pollution, there's a lot of things that needs to be solved for, equality of opportunities for all. So what is really a government's role, as it's getting redefined now, capitalist, socialist, mixed economy, where is it going? Do these labels matter? No. They don't matter at all. The idea is to get the job done, whatever it is. We'll talk about pollution. You know, people like us have to take the owners. Now we are setting up green factories. We are investing huge sums of money. You talked of nobody, no private sector coming into primary health care, etc., because they're not profit. There's no profit for me in setting up green factories. So we have to do it, whether it's capitalism or socialism. It's the onus is on us. Many years ago, Deng Xiaoping was asked how he squared what he was doing with being a communist. And he said, you know, who cares what color the cat is as long as it catches mice. Okay. One last question. Anyone on this side? Okay. Yes, sir. Some good things during the, from the morning. If you could take the mic, please. Thank you. Since the morning, we are hearing very good things. The top leadership is good. Reforms are coming. Direction is right. Confidence has happened and so on and so forth. I believe the biggest bottleneck is the executive, the bureaucracy. In all that we have been talking about, I think bureaucracy has not changed according to me. Bureaucracy has still remained slow, inefficient, unwilling to change its mindset. And that, I believe, is going to be the biggest challenge in whatever we do in terms of reforms, in terms of progress. Thank you. I mean, you know, I'm not sure I buy that. You know, Pawan mentioned that he doesn't have to go to Odiog Bhavan now. I mean, you know, I'm one of those private sector fellows who's never gone to Odiog Bhavan. Right? And I've only been going, there's a part of my CI role this year. And I have to say that one of the things that has impressed me has actually been the quality and impressed me very pleasantly has been, I think, the quality of our senior bureaucrats. I think it's been, you know, they're committed. They're knowledgeable. They know what needs to be done in many, many ministries. Yeah. Right? And so I think, you know, it's an issue of actually finding those right roles for the state and ensuring that we focus our management bandwidth, whatever it is, on those right roles. And do not end up dissipating our efforts on a whole range of different things that are less important and less relevant for the state to play a role in. And I think we're moving in that direction as a country. And some of it is happening by design. Some of it is happening because the private sector simply comes in and essentially eclipses a public sector provider. At the end of the day, it doesn't matter how it happens as long as it happens. May I, as a former civil servant? Yes, I mean, I insist on responding to this question. I think what you said and what he said are both right. Civil service. You are a former civil servant. Yes. I'm not going to say it. Yes, believe it or not. And that was the most enjoyable job I ever did. You are right in the sense that civil service still attracts some of the brightest and the most dedicated people. But there are a large number of things, including public accountability, which slows the process down. Civil service is and will remain critical to this country. But it has also to be understood that civil service is not meant for doing business. So the answer is not to do with the civil service or get a different civil service. The answer is to take away from them tasks for which they are neither recruited for nor it is their competence to do it. And then we add it all with stupid things like saying if your decision ever leads to a loss, you are guilty of corruption. Who will take a decision on that basis? I know three of my colleagues who are the most upright people facing CBI because of this. So let us face things as they are, accept that and then move business. Banks, airlines, hotels, you name it. They should all go out. But my issue is why are we not talking more about it? Why is this not an issue? Hey, what happened to privatization? All right. On that note, many thanks to my panelists for joining us on this conversation. Thank you all for joining us as well.