India Economic Summit 2005
A Young and Resurgent India: Its Impact on Regional and Global Strategies
New Delhi, India 27-29 November
Read the summit report on www.weforum.org/summitreports
On this page:
India could soon aim for 10% growth, says PM Singh
India urged to seize favourable global environment
Resolving outstanding conflicts key to better India and Middle East ties
Social Entrepreneur of the Year in India awarded at India Economic Summit
Business and government leaders join forces to improve schools in Rajasthan
Business alliance on water launched to create public-private water projects
India’s “paradigm shift” is challenging the world economic order
Future of India depends on meeting ballooning energy demands, says minister
Training and intellectual property protection "seeds" of Indian biotech success
India is on the rise but it’s a tough climb
Vast infrastructure improvements needed to boost India's competitiveness
India’s recipe for growth
India could soon aim for 10% growth, says PM Singh —
In two to three years, India should be targeting 10% growth if its savings rate improves, agricultural output increases, and infrastructure is substantially upgraded, Prime Minister Manmohan Singh of India said at the close of the India Economic Summit. Singh outlined his government’s vision of an “inclusive, prosperous, democratic and equitable India.”
The Indian economy is currently growing at between 7% and 8%. After two decades of economic reform, “we have today a broad-based national consensus that the process of economic growth must enhance both equity and efficiency.” He promised to continue efforts to boost agricultural productivity, address the social strains caused by urbanization, eliminate the “infrastructure deficit”, and encourage more foreign direct investment. Singh also vowed to invest in education and social safety nets.
“We have to carry everyone along on this road to national prosperity,” he declared.
Session summaries I Press release
India urged to seize favourable global environment —
“The global environment is in India’s favour,” the Co-Chairs of the India Economic Summit told participants. “The execution, speed of distribution and implementation of reforms are now the critical focus points for India,” they said.
They summed up the three days of debate by describing the action points participants had set themselves. These include:
· Promote Asia as a driver of global economic growth by strengthening trade and investment relations within the region.
· Develop infrastructure with “ruthless efficiency” to benefit all sectors and heighten a sense of country pride.
· Move the reform process to the state level – especially poorer and more populous states - to improve the national average.
· Maximise the demographic dividend by improving education, establishing innovative vocational training and re-skilling the workforce to fill gaps in the global economy.
· Emphasise private equity as a major component of FDI. Create a private-equity association in conjunction with CII.
· Promote awareness of gender issues through better education, fair employment practices and inclusiveness in social security systems.
Full action points I Interviews
Social Entrepreneur of the Year in India awarded at India Economic Summit —
Dr Devi Prasad Shetty, founder of Narayana Hrudayalaya Institute of Medical Sciences, has been selected as the Schwab Foundation Social Entrepreneur of the Year in India. He was awarded by Prime Minister Manmohan Singh at the close of the India Economic Summit. Dr Shetty was recognised for his “exemplary contribution to making sophisticated healthcare available to the masses.”
The Schwab Foundation for Social Entrepreneurship and a distinguished jury from the private sector and civil society selected Dr Shetty to join the global network of leading social entrepreneurs of the Schwab Foundation and attend the World Economic Forum’s Annual Meeting in Davos.
Dr. Shetty, a cardiologist, strives to make sophisticated healthcare available to all, regardless of their economic situation or geographic location. He founded the Narayana Hrudayalaya Hospital (NH) in Bangalore in 2001 and previously co-founded the Asia Heart Foundation. Together the network of hospitals performs 32 heart surgeries a day, making it one of the largest in the world. Almost half of the patients are children and babies.
Schwab Foundation for Social Entrepreneurship
Resolving outstanding conflicts key to better India and Middle East ties — As relations between India and the Middle East deepen, both sides agreed that peace in the regions would shape a new era and see ties expand. Leaders of the two agreed at an India Economic Summit session that they should further capitalize on their shared history to bolster trade and cultural exchanges.
Rajiv Sikri, Secretary, East, Ministry of External Affairs of India made the point that “Israel is an important trading partner of India and source of high technology and we are going to increase trade considerably.”
“I don’t think that we’re going to have a sustainable relationship without peace between India and Pakistan,” said Khalid Abdulla-Janahi, Chairman of the Executive Committee, Shamil Bank of Bahrain; and Vice-Chairman of the Arab Business Council.
“I call on India and the Middle East to be true partners for economic prosperity,” said Nikhil Meswani, Executive Director of Reliance Industries. Both sides of the discussion pointed to stumbling blocks such as the length of time it takes to open a business in India and the Middle East as the sort of issue that if overcome, could improve trade.
Business and government leaders join forces to improve schools in Rajasthan — Leaders from business and regional government have come together at the World Economic Forum’s India Economic Summit 2005 to launch an ambitious project that will improve the lives of thousands of school children. The Government of Rajasthan, the Confederation of Indian Industry (CII), the Global e-Schools and Communities Initiative (GeSCI), an initiative of the UN ICT Task Force, and the World Economic Forum launched a new initiative aimed at improving public education in Rajasthan through an extensive programme of public-private cooperation.
Rajasthan Education Intiative I Press release
Business alliance on water launched to create public-private water projects — The World Economic Forum Water Initiative and the Confederation of Indian Industry (CII) have launched a new alliance of Indian and multinational businesses to improve the availability and quality of water for businesses, communities, and the environment in India.
In partnership with the United Nations Development Programme and the U.S. Agency for International Development, the new Indian Business Alliance on Water (IBAW) will facilitate public-private partnerships to expand the business community’s engagement in water management projects. It will also be supported by Prem Durai Exports - Switcher.
Through the partners’ extensive networks, the alliance will promote corporate best practice in water management, broaden business engagement in community water projects, and facilitate discussion among businesses, governments, communities and NGOs to build common approaches to India’s water management challenges.
Water Initiative I Press release
India’s “paradigm shift” is challenging the world economic order — India’s Minister of Commerce and Industry, Kamal Nath, has told 600 leaders at the India Economic Summit that the nation will “exploit the potential to transform the world economy” to the fullest. “India continues to grab world attention… the confidence of the world in India has been growing and so has India’s confidence in itself,” he said.
Economic reforms begun in 1991 have resulted in a paradigm shift, Mr Nath said. “The Indian people have come to see globalization not as something thrust on them by government, but as something they want and value.”
He cited India’s young and qualified population as “another demographic factor in India’s favour which is giving us a rich resource for our factories… It is because of this that we are witnessing a resurgence in the manufacturing sector,” Mr Nath said.
Mr Nath assured business leaders that India would respect the rule of law, making particular reference to intellectual property protection. “Our patent law is compatible with the best countries in the world,” he said.
He concluded by asking participants what they thought the India Economic Summit in 2010 would look like. “International studies predict that when we gather here in 2010, India will be rubbing shoulders with the largest economies of the world,” he said.
The fact that India is poised to achieve 8% GDP growth is a major boost to other democracies around the world, added Mohamed Alabbar, Chairman of Emaar Properties.
Future of India depends on meeting ballooning energy demands, says minister — “The future of this country depends on meeting our energy requirements and this is at the heart of our energy security strategy,” declared Mani Shankar Aiyar, Minister of Petroleum and Natural Gas of India. He said that India is pursuing a policy of international agreements to secure access to oil and natural gas supplies needed to fuel the country’s growth.
“If we are to grow at 7-8% in order to get rid of poverty in the next 20 years, India will have to increase the current production of oil from 32 million tons to 50 million tons in the next five decades. Gross production of natural gas will need to be boosted from 90 standard cubic metres a year to 200 million. We need to jack up domestic production as much as we can,” he said.
Even at these rates, India’s dependence on external sources will continue. Nevertheless, he assured that “a fear of physical supplies is not too bad because any shortage is a worldwide problem.”
The minister said trilateral negotiations on an oil pipeline from Iran to India running through Pakistan were proceeding well and are expected to move forward significantly early next year.
India is committed to further liberalization of oil exploration, and invited foreign companies to partner with domestic firms. “India’s energy security does not depend on India going to the world, but we need to bring the world to India,” he said.
Training and intellectual property protection "seeds" of Indian biotech success — Training new generations of talented Indians and protecting intellectual property rights will unlock the potential of India’s biotech industry, agreed top business leaders at the India Economic Summit. Biotech in India is forecast to grow fivefold to US$ 5 billion by 2010.
“However human resources in India are a real challenge,” said S. Mahalingam, Chief Financial Officer of Tata Consultancy Services, India’s largest software company, “from both the quality point of view and the number of trained Indians returning from abroad.”
Attracting qualified engineers to biotech industries will require more than competitive wages and establishing centres of excellence, he continued, intellectual property protection will also be crucial.
India introduced in January 2005 a new patent regime in line with international standards. “Biotech and pharmaceutical sectors are vulnerable to intellectual property abuses and so effective intellectual property management is important,” said Philippe Petit, Deputy Director-General of the World Intellectual Property Organization.
“We need to see the execution and implementation of these new laws today,” urged Malvinder Singh, President, Pharmaceuticals, Ranbaxy Laboratories.
India is on the rise but it’s a tough climb — India’s growth rate, though commendable, is not adequate to ensure jobs for its burgeoning youthful population, said Nandan Nilekani of Infosys Technologies and Co-Chair of the India Economic Summit 2005. “We need 10% growth across the board to create the 50 million jobs that India will need in a few years,” he said, cautioning against a sense of complacency.
Hans-Joachim Koerber, of Metro, Germany, who is also a Co-Chair of the Summit, said India must resolve the critical issues of supply chain management, mass distribution, retailing and wholesaling. Competition would strengthen the rural economy and raise living standards.
“’Brand India’ to me epitomizes the all-pervasive spirit of optimism, people power, born-in-India multinationals and growth strategy,” said Sir Martin Sorrell, Group Chief Executive of WPP, and Co-Chair of the India Economic Summit.
Jim Goodnight, CEO of SAS Institute, and the fourth Co-Chair of the Summit, emphasized IT both as a software provider as well as a great source of talent. “The people force of India is growing fast and well,” he commented.
Vast infrastructure improvements needed to boost India's competitiveness —
Improving India’s competitiveness in the global economy will depend on improving basic infrastructure and reducing waste in government spending, according to the results of an interactive “Town Hall” meeting held on the first day of the 21st India Economic Summit.
“An inadequate supply of infrastructure is rated by business as the biggest obstacle to operating in India. Improving basic infrastructure would drive up foreign direct investment,” said Augusto Lopez-Claros, Chief Economist and Director of the Global Competitiveness Programme at the World Economic Forum.
India ranked 50 out of 117 economies in the World Economic Forum’s recently released Global Competitiveness Report 2005-2006. While India has achieved remarkable economic growth in recent years, it now needs to attain 8% annual growth in order to alleviate poverty and regional inequity.
To devise additional recommendations for improving the country’s performance, the World Economic Forum and the Confederation of Indian Industries (CII) commissioned a nationwide survey by Indian broadcaster NDTV, which polled 1,076 people across India to gauge their views on what areas of improvement held the most promise.
The Town Hall meeting was held to augment those findings with observations from among the 600 leaders from the business, government, media and civil society leaders participating in this year’s summit.
Full results I Press release I Session summary
India’s recipe for growth —
In the opening plenary of the India Economic Summit 2005 in New Delhi, Finance Minister Palaniappan Chidambaram of India outlined key priorities for the country to achieve and sustain 8% economic growth.
For the agriculture sector to grow between 3.5% and 4%, more land must be adequately irrigated and the corporate sector should be allowed to participate in agricultural supply and distribution. In the industrial sector, innovation must be encouraged through heavy investment in research and development.
“It’s not enough to become an industrial society; we must become an innovative society,” he said. The government should permit more foreign direct investment.
In most services, Chidambaram said that government should get out of the way, while in health and education it should invest more. Most of all, India’s serious infrastructure shortage had to be addressed, he said, with the private sector leading the way when it was more efficient for it to do so.
Jim Goodnight, Chief Executive Officer, SAS, USA
Hans-Joachim Koerber, Chief Executive Officer, Metro, Germany
Nandan Nilekani, Chief Executive Officer, Infosys Technologies, India
Martin Sorrell, Group Chief Executive, WPP, United Kingdom
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Last updated: 22 December 2005