Sudipto Dey:
‘It is possible for India to grow
at over 10%’
The
economic reforms are a journey for a better standard of living for all citizens
of the country, says Sunil Kant Munjal, joint managing director, Hero MotoCorp and
chairman, Hero Corporate Service. Edited excerpts from an interview:
Q. At a time when the government
is gearing up for elections, and business sentiment just about seems to be
entering positive territory, what are your biggest concerns as an industry thought
leader?
The
canvas of the MindMine Summit is not only about industry, but much larger. This
year’s theme -- ‘Today’s India: Economics or Politics?’ -- ends with a question
mark. We are posing a question to expert speakers and audiences -- where does the
balance lie for us? Both are important -- economics for a nation with a very
large number of people living in poverty, and politics for good quality of
governance. The issue here is: how do you strike a balance, so that politics of
the day recognises that economics is good and necessary to run social
programmes. In a country with diversity like ours we need to do both things. We
need to allow free enterprise and free markets. But there is certain section of
society that that does not have access to opportunities. For them we need the support
of the government and therefore strike a balance between the two.
We need
higher revenue, higher taxes and higher liquidity in the system to create a
virtuous cycle. As more people become prosperous they will consume more goods
and services. Companies and businesses that produce more goods and services
will create more jobs, thus creating a virtuous cycle. Our attempt has been to
reach that Utopian situation, so that poverty continues to go down and we are
able to eradicate it. So we need high growth for spreading prosperity and for a
long period of time. Ideally, it is possible for India to grow above 10 per
cent, if one looks at the fundamentals of savings, consumption and population
demographics. But we also have weaknesses in our system which cannot be covered
in a day.
So
reform is a process -- a journey for a better standard of living for all
citizens of our country. In this journey some people will do very well and some
will not do well, which is a fact of life. When you open up to the free market
not everyone will do well, and not everyone will do badly. The challenge for us
is how do you create enough freedom and growth, and thereby revenue, for the
government to use intelligently in creating infrastructure and a framework for
law, managing the currency of the country, managing its foreign exchange
reserves, ensuring free and fair quality of life for each of its citizen. I am
not being Utopian. Other countries have done it. Some of them are small
countries and some are large ones.
Take the
example of Singapore. From a fishing village in a short period of time they
became one of the most progressive states. They made good laws and very good
regulation of laws. They have continued to improve on freedom and civil liberties.
They have tried to balance the best of both worlds. We have a similar challenge
for us but our scale is much larger than most countries. One of the largest
populations of poor people live in India. We also have extreme diversities
across the country in terms of culture, language, taste, preferences. We are
like a continent. Our biggest weakness, the diversity, is also our biggest
strength.
At the
MindMine Summit we are addressing the subject of economics and politics from
multiple dimensions in different sessions. In each session we have opinion
leaders from different walks of life -- government, business, politics, civil
society, performing artists, think tanks, academics who are addressing subsets
of these big theme and create a dialogue. We discourage speeches and
presentations. Each session is interactive and engaging. We are leaving it to
the audience to find the question themselves. Questions are being raised and
debate is enacted in each session. The final decision is not given out. We have
a feed-back loop after the Summit for relevant government departments and
industry associations.
Q. Do you see a realisation
seeping in among the political class that sound economics is important for
sound politics?
In the
way the five-year government system in our democracy runs, politicians are
naturally concerned about how I am influencing my constituency to ensure that I
can come back next time around. When a new government gets set up, there is a
period for them to settle in. But
towards the tail end of the government’s (tenure) their behaviour tends to
change. Interestingly, in the last few state elections, a number of states have
demonstrated that actual performance -- from the citizen’s point of view -- has
started to become more important than it used to be.
If
citizens have seen better infrastructure, better service, better law and order,
more economic growth and job creation, they have started to re-elect the same
governments. The earlier formula of caste background, etc has not completely gone
away, but this is a new dimension that has got added. When they give (poll)
tickets out there is lot of number crunching in terms of the population mix in
that region, who will be a potential leader acceptable with that kind of
background of caste or creed.
My own
desire is that should become less important. Hopefully, at some point of time
in India it should be based on merit and understanding of the needs of that
constituency and the ability to address those needs -- not take short-term
action on what you can do in two or three years, but also lay the foundation
for long-term benefits to society, things which take 10-15-20 years to
fructify. I am glad today we have started talking of a large backbone of road
networks across the country, large knowledge management system, like the Aadhaar
project or civilian use of nuclear power. These are all long term projects and
have long term benefits.
But
there are many long-term issues pending which have not been addressed, such as
implementation of GST or reform in labour (laws), or full taxation reforms not
only in rates but also in administration, land reforms, and agriculture
reforms. A host of them are still pending and sometime we make them difficult
with the understanding that it may not be seen well by our constituency. At the
same time it is understood that it is in my constituency’s long-term interest.
I think our leadership needs ways to communicate to the constituency, the
opposition and the allies why some of the programmes that they want to implement
are good for the system. And why they need to be supported in Parliament,
including by the opposition.
Q. Given the general public
disenchantment with politicians, do you think Indian industry is now likely to
get more deeply involved with governance and politics?
Governance
is certainly important but it is less about politics. Frankly, politics is a
whole different field and best left to politicians. Industry only wants to
concern itself with industrial activity. Increasingly, more and more a demand
is being put on industry for societal support as well. The government in the
last 50-60 years has not been able to provide quality healthcare, quality
education, clean drinking water, and so it is asking industry to get involved.
Some
industries are doing this willingly and some unwillingly. It is clear industry
will get involved now. Some companies have been doing it for a very long time,
as it is an “Indian” thing to do. Giving is very Indian, but large-scale giving
has not been possible because of the system, the regulation, high taxation, and
the inability of individuals and large corporations to accumulate wealth over
the last few hundred years. But that is now starting to happen.
Industry
as a responsible citizen feels the need for governance in the overall system to
improve, so that there is a sense of fair play, a sense of freedom and justice
in the system.
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