8/7/2019 Nandan Neelkarani speaks out

http://slidepdf.com/reader/full/nandan-neelkarani-speaks-out 1/3

 Nandan Nilenkani speaks out

 Nandan Nilekani, Business Today, On Friday 14 January 2011, 12:48 PM

When it comes to predicting economic fortunes, what the crystal ball offers us is murkyat best. From the perspective of the global economy, for example, 2010 turns out to be asharp contrast of the world ten years ago. The global environment today is as cautiousand conservative as it was economically freewheeling and optimistic in 2000. It serves asa cautionary tale against interpreting our present mood - economic or otherwise - to project the future.

 Nevertheless, I would say that India finds itself in an enviable position. In the last decade,it has emerged as a prominent global force, and is predicted to become the fastestgrowing economy in the world over the next decade. But it is possible for a country's promise to go unfulfilled. When we look at economic history, we are often biasedtowards countries that successfully leveraged their advantages for rapid growth - such asChina, Japan, much of Western Europe and the United States.

However, several other nations rose for some time and looked set to expand rapidly, before policy missteps deflated their growth. Brazil and Argentina, for instance, onlyrecently regained the economic heights they first experienced in the 1970s and early1990s after falling back sharply into recession. The path to development is a protractedone, and requires steadiness and responsive policy.

Over the last ten years, India has begun to build the foundation for long-term, inclusivegrowth. Industry investment is growing fast. Spending on infrastructure has expandedconsiderably, and the cumulative investment in infrastructure between 2007 and 2012could touch $500 billion. India's telecom revolution has become a means of 

empowerment, and created a base for delivering information and remote services tomillions of poor across India. Welfare initiatives have focused on creating an expandedsocial security net, and the delivery of critical services - in employment, education andhealth - has improved steadily.

Sustaining this progress, however, will require India to respond to the 'Big Four' forcesthat are today re-shaping the Indian economy. The first of these forces is India's vastdemographic dividend - its large pool of workers, and low numbers of dependents. These

8/7/2019 Nandan Neelkarani speaks out

http://slidepdf.com/reader/full/nandan-neelkarani-speaks-out 2/3

millions of young people undergird India's growth story, and set us apart from everyother nation - by 2020 the average Indian will be 29 years old, compared to the averageChinese, who will be 37. In the next ten years alone, we will add 13 million people everyyear to our workforce. While the promise of such a young workforce is clear, we mustalso have enough jobs for it, as well as the systems to provide the workers with the skills

they need to participate in the economy.

The second great force is India's large domestic economy, which displays deep, untapped potential - over 600 million people are in the "aspiring" class, who are now just beginningto see a growth in their incomes and starting to extend their purchasing power. The rise of such demand, and as a result the continuing expansion of the domestic economy, will becrucial to buffering India from shifts in the global economy.

The third force is the penetration of information and communication technologies, or ICT. The rapid spread of telecom connectivity and widespread access to television inIndia is one of the most potent changes to have taken place. It makes all the difference

 between following existing growth blueprints, and the chance to build an entirely newone. The government has declared 2010-2020 as the decade of innovation for India, andICT will play no small part in this.

The Aadhaar initiative of the Unique Identification Authority of India, or UIDAI,suggests that governments have recognised the potential of these technologies. As auniversal identity infrastructure, the number could be used to access food, health care andeducation entitlements anywhere in India. It could also be used to provide resourcesdirectly to the poor. Such Aadhaar-enabled delivery would be a powerful means of distributing a variety of services. It would help empower the poorest through stronger relationships with the State, as well as through establishment of direct channels for 

accessing resources and airing grievances.

The fourth force is the rise in mobility. Across the country, thousands of people areleaving their villages every day to seek a new life in the city. They arrive with little morethan a sack on their shoulders and a willingness to live in miserable conditions and work small jobs for the chance of better incomes, and a better future for their children.

India's cities, our runaway metropolises, are a metaphor of the opportunities andchallenges the country faces in the next two decades. The Indian city is a place of dreamsand hope for our poor and our migrants, but it is also a place where many have limitedaccess, few rights and little legitimacy; where a large proportion of people live in illegalhousing, and 70 per cent work in the informal sector.

Such systemic exclusion will have to change. While India has managed to drive growththrough these informal mechanisms for the past few decades, the impact of the four forces means that this approach is no longer sustainable. Policies and investments willhave to focus on ensuring broader, more inclusive access to formal markets and publicservices, and empowering people to exercise their rights and entitlements.

8/7/2019 Nandan Neelkarani speaks out

http://slidepdf.com/reader/full/nandan-neelkarani-speaks-out 3/3