BY SAPAN GUPTA
Last Sunday, the India Conference at the Harvard Business School brought together experts on India and individuals interested in the country. India’s booming economy has enhanced its commercial attraction, and the publicity campaign at this year’s World Economic Forum in Davos has achieved the aim of its slogan, “India Everywhere.” President Bush’s visit to India in early March has also showcased that nation’s emergence as an increasingly important member of the global economy.
Since last year, service industries, making up half of India’s economy, grew at a robust 9.1%, while manufacturing rose 8.4%, and agriculture grew 3.4%. Services have attracted the most attention, as Indian outfits have taken advantage of telecommunications advances, and the population becomes more proficient in English and plays a growing role in the global outsourcing boom, including software, finance, and call centers.
However, the immediate challenge is to ensure the growth of agriculture in India and the availability of products and services to rural India. The problems faced by Indian agriculture are of fragmented land holdings, geographically dispersed villages, weak infrastructure, various intermediaries (unorganized lenders), and excessive dependence on the rainfall. The panel “Rural Markets: Reaching 700 Million Customers” discussed how India is finding a way to transform its rural base. Brigadier J.S. Oberoi of ITC Limited educated the audience on ITC’s Internet-based rural project e-Choupal (a village gathering place), a business initiative which was awarded the World Business Award for support of the United Nation’s Millennium Development Goals to eliminate poverty. Under this initiative, farmers know the sale price for produce even before leaving the village through online real-time information. Over the next decade, the e-Choupal network will cover over 100,000 villages, representing 1/6th of rural India, and create more than 10 million e-farmers. Additionally, Mr. P.H. Ravikumar, MD & CEO of NCDEX, India’s largest commodity exchange informed the crowd that India is planning to introduce weather indices to allow hedging of crops by farmers.
Dr. Amartya Sen, Nobel Laureate in Economics and Professor of Economics and Philosophy at Harvard University, was one of the keynote speakers at the event. Commenting on democracy in United States and India, he said, “Democracy gives a constant source of critic.” On Indian economic growth, he cautioned that celebrations should not blind India to future challenges. He shared his experiences with the Pratichi Trust, which he set up from the Nobel Prize money to address literacy, health care and gender equality in India and Bangladesh.
The panelists on “Private Equity and Hedge Funds” discussed the recent surge of private equity funds in India. India’s chief advantage over countries such as China is that it offers investors better trained managers, corporate transparency in the private sector, well regulated stock markets, easy exit from the market, and the rule of law. Sanjay Bhatnagar, CEO of THOT Capital Group, said that Indian markets are not attuned for hostile takeover as compared to US markets and one of the main reasons is the single family dominance in the shareholding.
Speaking on the panel of “Real Estate and Infrastructure,” Mr. Arun Shourie, a former Union Minister of the Government of India said that “building large scale infrastructure is one of the challenges for India.” In order to create an adequate provision of various public goods, the Indian Government has changed its role from direct producer of public goods and focuses on facilitating and encouraging public-private partnership, including foreign direct investment. However, China scores over India in infrastructure and India still has to go a long way in infrastructure.
Other panels included “Media and Entertainment”; “India Entry Strategy: A Blueprint for Corporations”; “Building a Career in India- Perspectives of MBAs”. Vishal Rao, one of the conference co-chairs, was rightly elated by the success of the conference in developing a better understanding on how to improve conditions for all stakeholders in the Indian destiny story.
After fifteen years of opening up and liberalizing, India’s economy is still relatively small by global measures. With 17% of the world’s people, it accounts for less than 2% of global GDP and 1% of world trade. The path to economic growth, thought many at the conference, is through market reform, which will provide jobs and a better life for a growing segment of the population. There is a euphoric expectation that at last India is reclaiming its rightful place both in the world economy and the global balance of power. This is India’s decade, crow the optimists; India’s century, echo true patriots.