India recently went through major upheaval when the government launched a sudden demonetization exercise last November and overnight rendered Rs500 ($7.40) and Rs1,000 notes as illegal currency. The move was aimed at curtailing tax evasion, counterfeiting, terrorism and corruption in the country. This, in turn, is expected to stimulate long-term economic growth. But not everyone is convinced, and strong camps have emerged in favor of and against the move. The effectiveness of demonetization remains to be seen.
Meanwhile, India’s successful transformation to a 21st century knowledge economy will depend on how well it performs in diverse areas such as technology, education, health care, urbanization, innovation, manufacturing, entrepreneurship, skill development and job creation. At the 2017 One Globe Forum in New Delhi, experts tried to zero in on actionable insights which could help overcome India’s myriad challenges and boost the country’s journey towards becoming a knowledge economy. “We are running out of time. We need to address our challenges boldly and decisively if we do not want to fritter away opportunities that come rarely in the life of a nation,” said Major Dalbir Singh, chairman — organizing committee, One Globe Forum, and senior advisor, Forum of Federations, Canada.
Take manufacturing. The government’s ‘Make in India’ initiative launched in September 2014 aims to take manufacturing to 25% of the country’s gross domestic product (GDP) by 2025 from around 17% at present and create 100 million jobs. There have been similar efforts earlier. In 2004, for instance, the government set up the National Manufacturing Competitiveness Council. Two years later, this council came out with a national strategy for manufacturing with an objective to raise the share of manufacturing in GDP to 30%-35% by 2015. The needle is yet to move.
In a session titled “Make in India: creating a 100 million jobs by 2022,” moderator Mahendra Bapna, senior advisor at the Indian Institute of Technology (IIT) Jodhpur, observed that for manufacturing to take off, India needs to “move beyond rhetoric and create a clear strategy and favorable policy environment and improve the ease of doing business.” He listed five important steps for the government: stop “tax terrorism,” improve infrastructure, reform labor laws, invest in technology education and skills development, and ease land acquisition. According to Bapna, the sectors of defense, electronics hardware, construction, health care and agro industries need to be topmost priority for policy makers.
Building on this, Makarand Chipalkatti, managing director of Dr. Chips Consulting, added that it is critical to also improve the ease of starting and closing a business. “This helps to de-risk decisions and results in faster setting up of manufacturing units.” According to C.V.R. Murty, president of IIT Jodhpur, a strong technical education system is an absolute imperative to boost manufacturing. “It needs to be run professionally and has to be student-centric and outcome-based, and not the current faculty-centric model,” he said.
“We are running out of time. We need to address our challenges boldly and decisively if we do not want to fritter away opportunities that come rarely in the life of a nation.” –Dalbir Singh
Ashok Atluri, chairman and managing director of defense industry technology firm Zen Technologies, gave a different perspective. Citing the example of Apple’s iPhone, he pointed out that the value of any intellectually intense product is in its design and development, and not in its manufacturing. Atluri noted: “Unless we move up the value chain and focus on design and development, we will be in trouble. Our policies need to be driven towards encouraging companies to focus on these two aspects.”
In a discussion on artificial intelligence (AI), robotics and jobs, Vikram Chachra, CEO and managing director of investment firm Eight Capital, cautioned that as AI and robotics enter manufacturing, there will be a major impact on jobs. “The blue collar jobs will be the first to go,” he said. In the future, even India’s IT services industry could be at risk, he added. “At the end of the day, you are using a lot of logic to write code, so if AI becomes smart enough, then it can easily replace all these people [in the IT services industry]. One could see many different jobs across industries completely wiped out.”
Through a New Lens
Urbanization is another area which needs strategic rethinking. In 2008, around 340 million people were living in Indian cities. This number is expected to grow to 600 million by 2030. How can Indian cities equip themselves to meet the demands of such rapid urbanization, especially given the current dismal state of urban infrastructure?
Raghav Chandra, former chairman of National Highways Authority of India and currently secretary of the National Commission for Scheduled Tribes, pointed out that in India the focus has primarily been on developing rural areas. As a result, cites have largely been neglected; there is inadequate governance and short-term master planning. Chandra said: “Master planning is done at the whims and fancies of political masters, whereas it is such a technical task that it requires a fulltime, dedicated authority which will look at all technical parameters and all aspects of master planning purely on merit.” Chandra also noted that historically the country’s education system has been focused more on architects and not on planners. This needs to change. “We require many more planners, and we also need schools for project management,” he added.
In the area of public health care, experts suggested that even as India builds its capabilities in curative care, it needs to focus more on basic hygiene and preventive care. Vidur Mahajan, associate director of Mahajan Imaging, pointed out: “We put in a lot of money into the latest technologies and treatments and training, but all this is negated by open defecation.”
Mahajan argued that India must start using artificial intelligence-based technology in health care. According to him, around 20% to 30% of the work that a general physician does can be easily done by robots. “Why not look at health kiosks run by robots and trained community health workers, especially in rural areas where there is an acute lack of general physicians?” he asked.
Indian IT firms “are seen as being very good at following [instructions]…. We need to position ourselves as problem solvers, as people who can predict the future.” –Jagdish Mitra
Harpal Singh, mentor and chairman emeritus of Fortis Healthcare, a chain of specialty hospitals in India, noted that public health goes beyond just health issues and needs to be viewed in terms of livelihood and productivity. He suggested that the government think of “public wellbeing” as a completely separate area. This must include aspects such as sanitation and waste management, city planning, transportation, etcetera. “The skills needed for this are beyond what is taught in medical schools. There is a total lack of experts who understand the various aspects of public wellbeing. We need to build both the requisite skills and also the political will to bring about this transformation.”
New Business Models
Discussing the future of India’s IT services industry, Som Mittal, former president and chairman of industry association NASSCOM, stressed that with rapid changes in technology like digital, Internet of Things, artificial intelligence, automation and robotics, and also the protectionist measures being