India Needs to Think Big

I wrote an article for the India section of The Wall Street Journal website. Here it is.

The verdict is in. A new United Progressive Alliance government is expected to take charge of India next month. With it comes the promise of a change for the better. The new government has the opportunity – and the challenge – to outline a bold vision for India, a vision that fires up the imagination of its people and the vitality of its entrepreneurs.

The new government has to credibly signal its commitment to addressing the major challenges facing India and enlist the support of the private sector in creating innovations for achieving goals that are big, visionary and bold. In the past, whenever allowed the freedom to do so, the Indian corporate sector has risen to the occasion and helped India’s development. It is time once again for the Indian government to present corporate India with a set of truly transformational challenges.

Here is a small set of inter-related broad areas where change is urgently needed and which, with proper government support, Indian entrepreneurs and corporations will eagerly participate in.

  • Education: India needs a radically different education system as the current one is dysfunctional and largely irrelevant in the modern context. In a world of rapid and accelerating change, the foundational skill is to learn how to learn. The education system has to produce life-long learners, which the current setup does not permit. Fortunately, a radical re-engineering is possible through the use of powerful tools presented by the revolution in information and communications technologies. To achieve this, institutional reform of the type that encourages private sector participation in education is necessary.
  • Energy: Any economic activity, like all processes in the universe, depends on energy. Today’s developed nations achieved their level of prosperity on cheap fossil fuels, an opportunity not available to India’s 1.2 billion people. Fortunately, India is large enough to be able to leapfrog the fossil fuel stage by investing in the development and use of renewable energy sources such as solar and wind. The required investment cannot be raised without leadership which convincingly articulates the vision.
  • Urbanization: India’s economic future depends on India’s success at urbanizing its immense rural population. No economy has achieved even middle-income status without being mostly urban. What India needs is to make its agriculture more productive. The labor released from agriculture has to be provided training and opportunities in manufacturing and services sectors. It is important to distinguish between the development of rural areas and that of rural populations. The former is neither necessary nor sufficient for development; the latter is indispensable and can be achieved most effectively by urbanizing them. This challenge is the creation of new, livable cities that would lead the urbanization of the population needed for India’s transition to an industrialized economy.
  • Transportation: India is a large country with a large population. For the economy to prosper, people and goods have to be efficiently moved over large distances. India is approximately ten times as densely populated as the US. It therefore cannot afford the solution that works for the US for transporting people, namely, air travel. What India needs is a land-based system and more specifically a rail-based transportation system, both for goods and people. The technology exists for super-efficient, super-fast rail systems. India has to seriously invest in that and replace the century-old current railway system. Furthermore, within cities, India needs to have an efficient public transit system and not take the unsustainable, car-centered approach.
  • Digital Infrastructure: Although India has one of the world’s cheapest and extensive mobile networks for voice communications, its data networks are quite inadequate. India needs to make serious and large investments to upgrade its digital wireline and wireless networks to create a high-speed, ubiquitous envelope of data connectivity across the nation. This is what will spur the creation of the next-generation of entrepreneurial outfits creating world-leading applications and services for the domestic market.
  • Governance: India has to make judicious use of its financial capital. The problem is that the current leaky system does not allow the most effective and efficient use of those resources. What is needed is to leverage technology in better governance though citizen participation. Technology can enable citizen oversight of public spending and enforce accountability. Innovations such as smart national ID cards and eVoting can increase participation in democratic processes.

India has a limited window of opportunity for getting its policies right so it can participate successfully in a globally very competitive world. It missed many previous opportunities but cannot afford to miss this one. The time has come for government and corporate India to come together to Think Big and drive the disruptive innovations that India so urgently needs to move rapidly up the development ladder.

33 thoughts on “India Needs to Think Big

  1. The unemployment rate is increasing in a sky scrapping rate and the only way to slow down it by creating awareness among the citizens of India for paying taxes.A big thing the ruling party should focus on is the tax payment by the Indians.The only way to increase India’s economy.

  2. I agree with Rutumbhara. IMO we should focus on exports. One way to increase number of tax payers is from huge export revenues. Bring $$ in country and pay tax from it. Internal rotation will also help but not upto that extent.

  3. Good points Rajesh.
    Education is the key. India needs to get its people
    educated so that they have good chance to use the market and grow it.


  4. There might be an attractive “fringe” alternative possible, for not only India, but other many developing countries and even developed countries (perhaps more so).

    We are all fast becoming members of the Generation-E (Environment, Energy, Equity, Enterprise and E-commerce). There are both threats and opportunities presented to us. It is also the major reason why we should “Skill-up and Power-down” in the not-too-distant-future. The following article might be relevant for our deliberations:

  5. Hi Rajesh,
    This is YP from your IIT days, you may not recall.
    Living and settled in China, and occasioanly facing teh suual dismissive comment from Indians “Yeah, but we are a democracy and China is not”, I tend to keep pushing something I see here. Building our backyards of Rural areas via a combination of education, agriculture, industry and more importantly, ethnic-driven cultural enterprise, be it tourism, arts and crafts industry, single crop agriculture is key. Excessive urbanization in India has led to an uncontrolled migration to Tier 1 and 2 cities and ignores the harsher realties of our rural areas. In China, migration is highly controllled via Fukou or residence permits and this is combined with a geo-cultural enterprise. For example, Zhejiang focuses its community on world class tea, southern China focuses on world class tourism , eco tourism etc and east coast urban centers provide the indistrial engines with Shanghai / Beijing/ Guangdong provding the juggernaut export economy. Even if you travel to China Tier 2/ 3 cities, you see world class highways, a rural poor that aint so poor, literacy driven by fiat and cleanliness. Even my so called home town of Pune , known to be a growth city, does not compare. We need to combine our democracy with a benign dictatorship in some areas like Bimaru states and do some things by fiat. Democracy comes with rights and does not absolve one of responsibilities. I don’t know what would be the evhcilce to get tjis accomplished in India but I have not doubt that it can be done.

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  7. Mr. Kamal Nath is the answer, build roads and bridges to connect hinterland to main cities.

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