25th July, 2014
WASHINGTON, D.C. — The Carnegie Endowment for Peace engaged a senior panel of CEOs from the Confederation of Indian Industry (CII) to understand the sentiment of the Indian private sector towards the recently elected BJP led government in New Delhi. All five CII panelists shared an overwhelmingly bullish outlook on the new government’s effect on business and industrial activity in India.
Chandradip Banerjee, a career staffer with the CII and its current Director General:
- Objective of the delegation’s U.S. visit is to interact with government, industry and opinion shapers about business sentiment in India post the Indian general elections of 2014.
- US-India business relationship is a mutually beneficial two-way street at primarily the B2B (business-to-business) level. Its not a one way street — the U.S. does not do any favors to India.
- CII looks forward to collaborating with various U.S. State governments to increase business ties.
- Indian industry optimistic with change in Central government in India.
- (Editorial note: I almost felt the event was a precursor to the Modi-Obama bilateral meeting in the US capital in September 2014. The delegation was scheduled to meet US Treasury Department officials post this panel).
Ajay Shriram, President of the CII:
- Extremely positive about the newly elected government in India.
- Indian election won by BJP and allies on a campaign of growth and development, an unprecedented feat in modern Indian history.
- Overwhelming young demographic in India cause for that change: Modi captured hopes of young Indians’ desires to lead lives of higher standards.
- Expectation of the Modi administration is high from Indian CEOs.
- Budget is visionary: Eg., agriculture policy, sanitation, education and taxes.
Naushad Forbes, VP of CII and CEO of Forbes Marshall:
- Need for reform of higher education in India
- Hopeful of market’s ability to deliver quality higher education.
- Emphasis on equity of access — loans to finance higher ed.
- Integrating research universities with educational institutes like the US model.
- Higher ed should broaden offerings to include social science and humanities.
- Made comment on previous Government’s HRD minister (possibly referring to Shashi Tharoor) who “had a lot of energy but could not get things done”.
Vikram Kirloskar, Owner of Kirloskar Group:
- Emphasized importance of manufacturing industries in India.
- Policy landscape has so far held Indian manufacturers from achieving potential. But hopeful new government will change that.
- Indian suppliers, despite the policy handicap, have led the world in shop-floor innovation. Quality of goods produced in India is world-class. Gave example of his own automobile company and the quality of defect-less products he receives from his suppliers.
- Hopeful and positive about increased co-operation between educational institutes and pvt sector would result in more innovation.
Rajan Navani, MD of Jetline Group of Companies:
- Optimistic about Indian youth, new government (and its ability to harness and utilize the young talent)
- His Thailand based company has moved main business base to India.
- Extremely optimistic.
Questions and Answers:
- A U.S. government official urged caution to counter the optimism shared by the panel; he reminded that this kind of optimism has often lead to disappointment. He asked if the mandate won by Narendra Modi in parliament will be enough to sustain economic transformation of India.
Shriram responded pragmatically saying that
1) Any transformation will result from both people’s will AND government (not one or the other); and
2) Even if government can deliver on 60% of its promises in its first term will be a job well done. (Editorial note: Hah! This guy was clearly biased)
- Someone asked about health care in India.
Kirloskar replied that the private sector offers world class solutions in health care in India. Gave example of his wife’s hospital. Also spoke about cottage industry of health care tourism being run by entrepreneurs.
- World Bank economist asked about corruption.
Panelist responded saying that Modi’s emphasis on use of technology to provide basic government services will reduce human intervention in these processes and therefore also stymie corruption.
- Another World Bank economist asked about impact of manufacturing on urbanization (and its negative ramifications).
Forbes responded that most urbanization will happen in tier-2 and tier-3 cities which will provide opportunity, in the form of time, to plan for negative impacts beforehand.
- Questions asked (and answers by panelists in parenthesis) on US-India nuclear issue (issue still has to be resolved), social justice (it is a problem), NRI sentiment and services, Small and Medium Enterprises innovation, Emergency response services and energy deficit in India.
On the whole, the panel was extremely positive about India’s economy, given the recent change of winds in the central government corridors, and gave answers that reflected that optimism.