Thank you Secretary Chandramouli for the introduction. I’d like to thank Prime Minister Modi for inviting me to speak to all of you today, and Chief Minister Vijay Rupani for the warm hospitality he has afforded me and my team. I would like to wish you all a very happy Diwali. Thank you for a beautiful celebration last night.
I know that many of you have recently started your career in the civil service. I want to begin by congratulating you on this important milestone in your lives. I know you put in many hours of hard work and study to reach this point. The future of the Indian government’s policymaking depends on the talent and ingenuity of women and men like you.
It’s a great pleasure to be here today in the State of Gujarat. As I was thinking of what to say today, you will not be surprised that I wanted to start with Mahatma Gandhi.
Early in Gandhi’s life, few would have imagined that he would go on to become the Mahatma. He was a shy boy who wasn’t especially good in school. As a law student, he struggled to adjust to life in London. Yet he would go on to become the leader of India’s push for independence and much more. In your career, you’ll likely face many twists and turns, but if you stay true to your principles and goals, you won’t lose your way.
Gandhi’s vision of peace, tolerance and modesty remains an inspiration to the world. It’s a fitting vision to keep in mind as India aims even higher. It’s one of the most diverse countries on Earth, and the biggest democracy by far. Indian creativity has pushed forward human understanding in too many fields to list.
India has been a development success story. This country cut extreme poverty in half within a generation, and is transforming itself into one of the world’s fast-growing standouts. The goal of becoming a $5 trillion economy by 2025 is both worthy, and achievable with strong economic reforms.
Achieving fast growth won’t be easy. India’s growth slowed last year for the second consecutive year. Data suggest the slowdown deepened in the first quarter, amid weak consumption and slowing investment. And while India’s poverty-reduction record has been remarkable, poverty remains a challenge. Roughly half the population lives on less than $3.20 per day, and India remains home to more than 176 million people living in extreme poverty.
Making India’s economic hopes a reality will require patience, persistence, and lots of energy from you and your colleagues. To lead the country into the ranks of upper middle-income nations, you will need to seek new engines of growth that are sustainable, with opportunity and prosperity shared across the diversity of Indian society.
The World Bank Group is committed to working with India to put in place well-designed reforms that help India in its development journey and enable broad-based growth. I’d like to lay out a few of the reforms that we think would be helpful.
REFORMING THE CIVIL SERVICE
I’ll start with you: the civil service! The World Bank has many years of experience advising countries on how to make civil services as effective as possible. The Indian civil service employs some of the most talented people in this country. It played a leading role in the nation’s poverty-reduction efforts, by implementing policies that improved the livelihoods of millions of people. Over a million people take the Civil Services Exam every year, and only about 0.2 percent are selected. So those of you who recently joined the civil service have reason to be proud.
Yet to stay in the forefront, India’s civil service needs to shift from a focus on enforcing compliance and meeting minimum requirements of service delivery to finding ways to ensure high-quality services and regulation. You need to build the institutional capacity to deliver broad-based growth and a thriving private sector. You will need skills in communications and negotiations, and to work across units and ministerial boundaries to address the complex challenges that you will face in your careers. Partnerships with the private sector and community organizations will be important for effective service delivery.
Last week we released our annual Doing Business report, which measures ease of doing business. For the third year in a row, India was one of the top 10 reformers, in part due to regulatory changes to improve civil service delivery. Red tape was eliminated in many areas, including in starting a business, getting permits, and simplifying some trade and customs procedures.
India also took important steps to improve bankruptcy and insolvency laws and proceedings. You have a role to play by working to make resolution of disputes faster and more efficient. Establishing specialized commercial courts at the district court level to fast-track commercial dispute resolution would also facilitate the Ease of Doing Business in your highly entrepreneurial country.
The government has also proposed many bold, innovative measures. One of them is Aadhaar, the nation’s system for assigning unique ID numbers to individuals based on biometric data. The system has enabled government benefits to be transferred directly to individuals, which has especially benefited the poor and vulnerable. The system has reduced corruption, creating substantial savings for the government.
Still, social protection initiatives are fragmented across roughly 500 schemes separately administered at the federal, state and local levels. Attaining India’s economic ambitions will require a more responsive, efficient and effective public sector. Prime Minister Modi has stressed the importance of people working cooperatively across cadres, for “One India.” It’s a goal we at the World Bank Group support.
To strengthen the public sector, the civil service will need the proper resources and training to provide sound regulation and improve service delivery. There needs to be a stronger compact among tiers of government on issues such as quality assurance, especially given that most public services are managed at the sub-national level. And the civil service needs to embrace the idea that the private sector is an essential partner in boosting economic growth.
Along the way, it’s important that India invest in the capability of its states to lead and deliver development. The share of government spending by states has increased from 45 percent to more than 60 percent in the last eight years.
Municipal governance is also taking on greater importance as India urbanizes. India’s growth will depend on the productivity and livability of its cities. Still, cities can’t be governed from the top down. Municipal governments need the capability to raise their own financing, tap into capital markets, respond to the needs of their diverse citizens, and be accountable to them. As federalism continues to take root, it’s important to further strengthen cities and communities.
How can we do that? By enabling grassroot participation in the government process: engage youth, women, civil society and all beneficiaries in governance.
I discussed with both PM Modi and Finance Minister Sitharaman the importance of data and good statistics. How can good decisions be made if the data isn’t right or isn’t there? In India, there is a need to strengthen the quality of statistics and do more to link data sources. You play a key role: it’s the data that you provide about your respective units that’s the first step in the data collection process.
At the World Bank Group, we’re ready to work with you on these important issues. I’m confident that India’s civil service can rise to the challenge.
FOSTERING BROAD-BASED GROWTH
In addition to reforming the civil service, India needs to address a number of challenges that are key to its economic prosperity.
One of them is agriculture and rural development. True, the nation’s farm sector has done remarkably well over the past six decades, helping the country transition from highly food insecure to a net food exporter. India now produces food for nearly twenty percent of the world’s population — on less than eight percent of the world’s arable land.
Relative to the rest of the economy, however, agriculture needs a boost. The government’s strategy depends on a dramatic increase in farmers’ incomes. That will require a reset of policies and institutions established in the 1960s and 1970s. Their aim was to ensure food security, but policies need to be realigned to allow agriculture to become more productive, resilient, and sustainable. For example, in states like Punjab and Rajasthan, free electricity and other subsidies for wheat and rice lead to inefficient cropping patterns and depletion of groundwater.
More needs to be done to strengthen property registration, such as by digitizing land titling so that data is accessible throughout the country, and buying and selling of land becomes easier.
The private sector has a crucial place in development. India needs to build an environment where private companies of all sizes can grow and be part of global supply chains. Many Indian firms start small but don’t scale up as hoped.
To unleash the productivity of small and medium-sized enterprises, India needs to rethink its regulatory, land, and labor policies. It’s important to build a policy and regulatory framework that supports the growth of private companies.
Access to finance is an additional challenge. I spoke about financial sector reform in the NITI Aayog lecture Saturday. Reform is vital in driving a dynamic economy. I won’t repeat the points here, but suffice to say that improvements in the functioning of the real economy need to be matched by reforms in the financial sector.
I’ve mentioned the phrase “broad-based growth.” It’s important that, as India sets its sights on becoming a $5 trillion economy, the gains from its rise are widely shared throughout the economy. I congratulate Prime Minister Modi’s efforts to ensure nutrition programs, health coverage, housing for all, sanitation, and financial inclusion for households.
Fully including girls and women in the economy and a safe society is essential to boosting broad-based growth and achieving strong country outcomes.
The revolution of women’s self-help groups in India is part of South Asia’s story of women’s empowerment. In India, 80 million women, organized into self-help groups, have leveraged nearly $40 billion from microfinance institutions and commercial banks in the past decade.
The JEEViKA program in Bihar has mobilized more than 7 million rural women into self-help groups, which provide access to finance and markets to start and expand their businesses.
At the same time, India faces a dramatic decline in women’s labor force participation. Part of the challenge is the availability of suitable jobs--ones that are flexible, linked to childcare, closer to home, and where transport services offer safety and security.
One solution is to broaden the revolution of self-help groups, so they expand the ranks of women entrepreneurs. Some other solutions include providing women with the skills that match available jobs and facilitating access to credit.
There are many other innovations to explore. I’m pleased to say the World Bank Group is looking into the floating of Women’s Livelihood Bonds, linking capital markets to women entrepreneurs through financial intermediaries.
At the same time, India will need to significantly upgrade the reach, quality, timeliness and efficiency of its investments in human capital. India has been successful in increasing access to school education and is focusing more on the quality of education.
Under Prime Minister Modi’s leadership, India is developing an architecture to support the training of India’s workforce. This is important, because school education isn’t always geared to preparing young people for a dynamic labor market.
India is linking schooling and markets, and the innovation is garnering global attention. Many African countries want to partner with India’s “skilling” framework. As civil servants, your engagement in skilling innovation will be essential for India’s economic transformation.
Technology is another key to development. With 1 billion mobile-phone users, fast-growing digital platforms and a tech-savvy population, digital innovation has the potential to accelerate India’s rise. The World Bank Group will continue to support smart applications of technology throughout the Indian economy, including in systems to modernize farm production.
The IFC, the private-sector arm of the World Bank Group, has invested in companies including Power 2 SME, a digital platform for small manufacturers to access raw materials; and Blackbuck, an online marketplace that helps small fleet owners find and bid for shipping jobs from large users of transport. We will continue to leverage our investments to help create a vibrant technology ecosystem in India.
You can also play a leading role in making India’s public-sector footprint more effective. As you know, state-owned enterprises play a central role in the delivery of electricity, water, and transport, which will be key to India’s faster growth. There’s considerable scope for improvements in many enterprises, and your innovations in this area will be important in India’s economic and social progress. Creation of viable utilities and municipal structures will enable the magnitude of financing from capital markets needed to achieve services at scale.
Other countries that have been successful in realizing the potential of effective state-owned enterprises have found the right balance between the public and private sectors. This means being a good regulator while finding the right role for government.
In closing, as you embark on this exciting journey to serve this great country, I want to leave you with a few thoughts:
As civil servants, you have a dual responsibility of both compliance and service delivery.
In your day to day work, you have the power to facilitate efficient, fair and high-quality services to all Indians. While paying due attention to oversight, you should keep in mind the ultimate goal of delivering impactful services for all.
As you grow in your careers, be proactive in thinking about how to build a system for incentivizing performance, a system with clear accountability, a system that rewards success.
Mahatma Gandhi likened public service to being a trustee of public resources. As civil servants, you are uniquely positioned to play a role in lifting more than 170 million out of poverty into prosperity. The people of India have high expectations of you. It’s important to live up to that responsibility.
India is a vibrant democracy, a gifted technological power and an emerging global player. The competency of its civil service systems and the robustness of its institutions will be important factors in determining India’s future.
As you build an even stronger India, we at the World Bank Group stand ready to help.
I wish you all the success in your careers.