THE BIG DEBATE: Session 12 | India needs stronger leadership, not democratic leadership

Panelists:
Mr. Kanwal Sibal - Former Foreign Secretary
Dr. Bibek Debroy - Indian Economist
Mr. Surjit Bhalla - Chairman, Oxus Investments
Ms. Smriti Irani - Member of Parliament, Rajya Sabha
Mr. Sitaram Yechury - Indian Politician, Communist Party of India

Moderator:
Ms. Shereen Bhan - Delhi Bureau Chief & Executive Editor, CNBC TV18

India witnessed a paradigm change in its economic growth during the decade of 2000, with an average growth rate of 7.2 percent, the highest growth in the last five decades. Among other factors, this was enabled by the big bang reforms of the 1990s that not only addressed the key economic issues at the time but also underlined its strong political leadership. Since then, several articles have been published crediting India’s strong leadership for their contribution to the Indian economy. Thus, given the current economic slowdown, when India is projected to record a decade’s low growth of 5 percent in FY13, the Indian leadership is expected to tread the same path. More so, because India has the potential to grow at over 9 percent given its large working age population, high domestic demand (rising urban class and untapped rural markets) and low cost of production. However, a wide wedge has been created between this potential rate and its current growth rate owing to a host of domestic and external factors.

Ironically, India’s political leadership that has been credited till now for introducing the Big Bang reforms and placing the economy on a higher growth pedestal is now being criticized for its policy inaction, resulting in an economic slowdown. The divided opinion on reforms and lack of strong leadership has only postponed implementation of crucial growth supporting measures.

This is evident from long-stalled bills such as the Land Acquisition Bill, the Companies Bill, the Banking Bill etc. that are awaiting Parliamentary approvals. Likewise, there are several other crucial policy measures that are either on the sidelines for lack of consensus on future action (such as the Labour reforms) or for lack of implementation [the Goods and Service Tax (GST), the Direct Tax Code (DTC)].  This is not all. Even the World Bank in its 'Doing Business in India' study has placed the country among the last of ranks on several key parameters. Of the 185 countries under study, India has been ranked at 184th position for its effectiveness in enforcing contracts, at 182nd position for its effectiveness in dealing with construction permits and at 173rd position for starting a business. For a foreign entity considering venturing in the Indian market, these ranks may act as deterrents instead of facilitators. Even worse is the government neglect on these parameters.

Thus, poor leadership, economic slowdown and a deteriorating fiscal deficit position, led to a credit rating downgrade for India (to BBB-) by Standard & Poor’s in 2012. Though the Government of India (GoI) did announce some policy measures in September and October 2012, these have been only piecemeal with short-term effects, while the threat of a further downgrade to junk investment grade still looms. Thus, the GoI is required to announce some effective and far reaching measures for placing India on a 9 percent plus growth trajectory. It implies that a hike in fuel prices or relaxation in FDI caps or ban on exports of some commodities should not be rolled back due to opposition from concerned stakeholders. Besides, the central government may draw some learning lessons from the state government of Gujarat that has strongly positioned itself as a leading investment destination in India through its pro-active policy support.

To sum it up, the issue lies not in democratic leadership but in lack of strong leadership.

Session 10 | Quality healthcare for all —pipedream or reality?

 Panelists:

Dr. Gurpreet Singh Wander - Chief Cardiologist, Hero DMC Heart Institute
Dr. Ashok Seth - Chairman, Fortis Escorts Heart Institute & Cardiology Council
Prof. Gerard George - Director (Rajiv Gandhi Center), Imperial College, London
Dr. Naresh Trehan - Chairman & Managing Director, Medanta

 Moderator:

Ms. Shruti Mishra - Producer & Anchor, CNBC TV18

As India aims to become a global power, the country has to lay particular focus on the health and well-being of its citizens. However, the healthcare system in the country has to go a long way to reach the global standards.

Compared with other countries in the world, the healthcare system in India shows a dismal performance on almost all parameters ― be it access, affordability, quality or capacity. In India, the estimated number of beds per 10,000 people is 9, compared with the global average of 30. Further, the country has only 7 lakh doctors to serve a population of 1.2 billion; and if one considers the specialists available, the number is even lower. Moreover, urban areas, with a population of only 30 percent of the country, account for about 67 percent of the healthcare infrastructure. This has led to an acute supply shortage to sub-urban and rural areas, which account for about 70 percent of the country’s population.

Another detrimental factor is healthcare expenditure. The government spends only 1.1 percent of the country’s gross domestic product (of a total USD1.1 trillion) on public healthcare, and an additional 3.7 percent is privately financed. Consequently, 75 percent of healthcare expenditure is borne by the people. This makes the country one of world’s largest consumer-focussed healthcare markets. Further, healthcare insurance penetration rate in India is one of the lowest in the world, comparable to some of the underdeveloped countries such as Nigeria, the Dominican Republic and Bangladesh. Owing to low public spending and poor insurance penetration rate, people in these countries have to spend a lot more on healthcare than their counterparts in developed nations. The dismal performance of public healthcare system has led to the growth of the private healthcare system in India. Today, the majority of the Indian population prefers to seek private healthcare facilities.

Responding to the need of the hour, the Planning Commission of India, in early 2012, drafted a proposal on the lines of the ‘managed care system’ followed in the US, wherein the role of the government is diluted from that of a provider to a manager. This proposal aims at streamlining the healthcare system to help the patient become the prime benefactor. This will likely help the government efficiently deal with major healthcare issues and achieve the ultimate goal of universal health coverage (UHC). According to the proposal, private players will need to service patients at the lowest possible costs agreed upon with the government. Further, service providers are expected to be reimbursed for each medical prescription.

The proposal is seen as a step toward revolutionising the Indian healthcare system by adopting various best practices prevalent in the US. However, it has expectedly created ripples in various relevant stakeholder circles. Although, with this proposal, the government has taken a step toward developing the healthcare system in the country, it has a long road to travel. It is still not clear whether we  will be successful in expanding hospitals beyond cities, building speciality facilities, increasing the penetration of medical insurance and leveraging technology to come up with innovative healthcare solutions or will quality healthcare always remain a distant dream in India.

Session 9 | India's new sports leagues: money over matter

Panelists:
Mr. Viren Rasquinha: Former Captain, Indian Hockey Team
Mr. Neeraj Bharadwaj: Managing Director, The Carlyle Group
Ms. Sonali Chander: Sports Editor, NDTV

The sixth season of the Indian Premier League (IPL) is round the corner. The success of the earlier five instalments of the tournament has raised people’s expectations from this year’s tournament, which promises to be bigger and better than ever. The IPL has proved to be a great platform for everyone —players are able to display their talent and build a good career for themselves, investors get a chance to cash in on the popularity of the sport and audience gets to watch a high-energy cricket tournament and cheer for their favourite teams and players.

The IPL’s success can be gauged from the various titles that have been bestowed on it so far. Forbes magazine called it the “world’s hottest sports league” while cricketers generally regard it as the ‘godfather of T20 cricket’. The cricketing franchise’s brand value, in just six years, is estimated to be about USD3 billion. Approximately USD723.59 million was given in reward to the original eight participating teams and the tournament recorded a viewership of more than 160 million in 2012.

However, the IPL’s instant success has also raised some eyebrows. The critics of the franchise have often expressed their concern over the business model of the IPL. They wonder how the franchise has managed to generate so much money in such a short span of time. Above all, they are disappointed at how the IPL has allegedly glamorised the gentleman’s game. The IPL has also invited several controversies, especially those related to sport fixing, doping and corruption. While the Board of Control for Cricket in India (BCCI) took swift and appropriate action against the five IPL players who were found guilty for spot fixing last year, the franchise is yet to come clean on several other allegations of irregularities in its functioning.  The question, therefore, is if the IPL is really the way forward for cricket? It’s interesting to note that the T20 format did not find support from cricketing experts, players, audience or the media until a few years ago. Broadcasters as well as advertisers, too, hesitated to invest into T20 tournaments, as they were not profitable. However, the success of the first IPL season in 2008 forced its critics to change their opinion on the franchise model. Today, six years since its inception, the IPL has become one of the most watched sporting events and its success has been acknowledged by critics and experts alike.

If there is one question that the supporters of the IPL haven’t been able to answer to everyone’s satisfaction yet, it is this — Is the IPL more about money and less about cricket? The answer to that is that there are no clear answers. It is unlikely that this riddle will be resolved anytime soon either. The T20 format is definitely different from the One-Day International (ODI) and the Test formats of the sport. The organisers of the IPL hope that just as people developed a liking for — and got addicted to — the limited over format after labelling it as the ‘Test killer’ in the 1980s, they will also embrace T20 cricket in the coming years.

The bigger question that no one has asked so far is if the IPL model can work wonders for other sports too? Can an IPL-like business model give others sports in India a leg up? For that to happen, the IPL needs to first convince pundits and audience that it is as much about cricket as it is about money and that the franchise-based model is the future of every sport across the world.

Session 8 | Towards SAFTA: Only give and no take?

Panelists:
Mr. G. Parthasarathy, Former Diplomat
Mr. Salman Bashir, High Commissioner of Pakistan to India
Ms. Jyoti Malhotra, Journalist
Mr. Rajiv Pratap Rudy, Member of Parliament-Rajya Sabha

 India emerged as one of the prominent players on the global trade scenario in the last decade. Its global trade figures stand at USD795.3 billion by FY12, a CAGR 18 percent improvement from 2008 when this figure was USD 414.8 billion. India's trade with South Asian Association for Regional Cooperation (SAARC) is worth only USD13 billion even though its global trade has crossed the USD750 billion mark. Indian companies have invested more than USD100 billion outside India and more than 90 percent of this investment has been made outside South Asia. The country has got investment worth around USD10 billion from SAARC nations. Moreover, with a total population of more than 1.5 billion, South Asia has more people than any other regional blocs in the world. Even then the SAARC’s contribution to bilateral trade with India is a mere 2 percent.

The volume and the value of India’s trade with SAARC nations reinforces the need to create a more conducive investment climate, which will go a long way toward strengthening ties among all the participating industry bodies and integrating South Asia as a major trading bloc.

In order to achieve these goals, the Government of India is stressing on liberalising trade under the South Asian Free Trade Area (SAFTA) agreement, which came into force in 2006. India is committed to building a unique South Asian identity for all the countries in this area. Keeping up with its commitment, India has reduced the number of trade items in the sensitive list for SAARC's non-least developed countries (NLDCs), such as Pakistan. This move is likely to further expand trade in the region.

The Cabinet’s approval to reduce 30 percent — or 264 — of such items for NLDCs and a unilateral reduction in its sensitive list for the Least Developed Countries (LDCs) to 25 items while allowing all other imports at zero basic customs duty reiterate the fact that India is leading from the front in harmonizing the SAFTA framework, which is central to developing a vibrant economic community. India’s decisions have so far benefited Pakistan, Afghanistan, Bangladesh, Bhutan, Maldives and Nepal.

While India is committed to the cause, it’s disappointing to learn that other South Asian countries are yet to reciprocate in a similar manner. Some of the member nations are yet to lower trade barriers and help Indian companies give more business opportunities. A case in point is India’s lowering of peak tariffs for imports from Pakistan under SAFTA. By delivering on its promise, India decreased peak rates to 8 percent by January 1, 2012, and to 5 percent by January 1, 2013. However, Pakistan hasn’t reciprocated the gesture so far and it is also yet to live up to the commitments it made to SAFTA.

The time has come for South Asia to take note of other bloc economies, which have adopted a ‘regional economic integration’ policy for an equitable and balanced growth of the region as a whole. For that to happen, all South Asian counties will have to work together as a cohesive unit. Otherwise, India will be left with no option but to look for alternatives for regional associations in South East Asia.