“Suited-Booted” are saviours, not villains

In recent months, the phrase “suited-booted” has been synonymised with all evils in Indian society. Much has been said by the politicians across parties, as well as media. Let us see whether there is merit in the criticism of industrialists.

Traditionally, India has believed to be an agrarian economy. But with just 17% of the GDP coming from Agriculture, is this belief correct? Let us view the economy holistically to see whether there is any merit in the criticism.

• India is a 1.26 Billion strong country, with around 500+ Million workforce
• 49% of the said workforce is employed by Agriculture while Manufacturing & Services sectors contribute 51%
• However, Agriculture which contributed 52% of GDP in 1950-51 now contributes a meagre 17% to GDP while the balance 83% comes from Manufacturing & Services sectors. So it is only fair to assume India’s progress is aligned with development of Manufacturing & Services sectors.
• 50% of the population in India is below the age of 25 years and 65% below 35 years
• Current unemployment is around 4.9% as per Labour Ministry records. While as a % it may look modest in comparison to various UN member nations, the real numbers given the overwhelming population base and workforce size, is staggering
• Per World Bank records, around 180 Million Indians are still below poverty line

Will Agriculture address the challenges? One has to realise the land mass available in India is finite and with divisions and sub divisions there is disproportional workforce already engaged in Agriculture. With India’s 2/3^rd of the Agrarian economy still dependent on monsoon, the pressure is building up on farmers as is evident in frequent farmer suicides. Expressing sympathy by visiting the impacted farmers and having lunch with them does not offer solutions. Create alternate job opportunities even as you strengthen Agriculture sector. A separate story that deserves a separate, dedicated blog.

Statistics from various studies estimate around 1+ Million engineering graduates joining workforce every year.  Add to that graduates from other streams, diploma holders and those discontinuing education post 10^th standard. That is a staggering number of youth joining the workforce each year.

So, where will employment opportunities come for these youngsters as well as for those who are currently unemployed? Will Agriculture sector address the needs?

It is in this context we have to appreciate the “Make in India” initiative launched by our Prime Minister. It is a grand, noble, thoughtful strategy to ensure employment opportunities to support India’s growth aspirations.

Logical next question, who will participate in this noble strategy? Farmers or Industrialists? The socialists or the capitalists, the so called suited-booted?

While the answer is obvious, media and Politicians need to wholeheartedly support measures to engage the young, growing workforce. One has to understand free-enterprise is the approach to growing the economy. Afterall, India was a prosperous nation for several centuries prior to the British rule and was renowned for its enterprising population.

So, what ails the “Make in India” strategy?

Firstly, the treatment meted out to entrepreneurs and businessmen. Treat them as saviours and not as villains. No doubt they create wealth for themselves but that should be acceptable to the society provided they create jobs. Ofcourse, illegality of any type cannot and should not be condoned. So, let the enterprising Indians thrive and carry the nation along.

Secondly, the enablers for this strategy are inadequate or sorely missing!

• Economic reforms are badly needed to simplify doing business. If the political parties and politicians put the nation ahead of themselves, them much can be achieved. And simplifying web of laws can curb corruption too.
• Improve governance both at state and federal levels. Flipkart a leading e-commerce player, deciding to shift a new warehouse out of Karnataka owing to poor environment for industries is an example of lack of interest among politicians towards development. Karnataka lost an opportunity to create 2000 direct jobs and 10-12,000 indirect jobs, in the bargain.
• But are the new graduates emerging from academic world each year readily employable? The company I manage has a record of hiring less than 2% of interviewees! Why? That brings me to the final point.

Lastly, Education sector needs urgent reforms.

• We seem to be still following the British education system to create obedient clerks out of Indians. Revamping education sector is an urgent need. Young graduates go through actual training in their first employment thereby wasting the 15 to 17 years investment in academics.
• India currently deploys 3.8% of $.2.2 Trillion GDP on Education and is placed in 120^th position among UN member nations. China employs around 4% of $ 11.40 Tr, US invests around 5+% of $ 18 Tr and UK invests around 6+% of $ 2.90 Tr. Our HRD Minister had indicated before taking charge that she would like to raise the investment to around 6% of GDP. It is more than 15 months and we are yet to see any urgency around evolving a holistic strategy. Education is the bedrock of a Democracy and is essential for Social & Economic development of a nation.
• Instead of meddling with the well-functioning IIMs & IITs that create entrepreneurs, the focus should be more on changing the curriculum at Primary & Secondary education levels. Why do we impose the British dictated curriculum on rural Indians knowing fully well they cannot afford education beyond 10^th standard, at best? Why not provide alternatives to rural Indian to pursue skill enrichment program as opposed to graduation? Why not expand Technical Training programs to create skilled and capable workforce to support “Make in India” initiative? Perhaps we need a visionary to head the all-important HRD ministry that is expected to foresee the need of 600+ Million Indians. Else, the “Make in India” strategy would remain a dream in the pipe.

I say with pride that I am a so called suited-booted Indian. Have I created jobs? Yes, 1000s of direct jobs and multiples of that number in indirect jobs. Have I benefited? Immensely, on deriving satisfaction as well as on wealth creation fronts. Have I carried out business legally? Yes, on all fronts! It is a pity that the country instead of appreciating the contribution, is finding fault with the producers of jobs. India embraced open market system irrevocably in 1991 and benefited immensely. Middle class Indians emerged as entrepreneurs to contribute to the economic progress.  It is time Indians wholeheartedly accepted capitalism.

Present Government at the centre started off well but seems to be losing its way by not pushing through badly needed economic and education sector reforms to spur the economy to create jobs and ensure employable workforce.

India must create new job opportunities else the unemployed youth could create an Indian spring in other words social unrest, which would dwarf the Arab spring in impact & magnitude. God forbid, if that happens, India will be doomed!

Are the Government functionaries and opposition party politicians listening?

Swacha Bharat, a grand Vision

It had rained heavily the previous night and as Yuva entered the park early morning he was mesmerised with leaves and flowers all over the wet ground creating a special scent to enjoy.  This was very different from the pavements that he had to use to reach the park. He had to jump and stretch to avoid the garbage and animal waste on the pavements. He thanked the almighty for this clean park in his neighbourhood and got ready to jog. On completing his quota he felt like hanging around in the park to absorb more of it.  He was about to settle down on a nice cemented seat when he was greeted with a “Season’s greetings young man” by the venerable Praja.

“Good morning sir! What a fine day we have today and how are you doing?”

“Indeed a nice day, with regular showers in the past weeks this park has only gotten better.” replied Praja.

“Yes Sir! We are blessed, wish the pavements and streets outside were enjoyable too. I hope the Swacha Bharat campaign leads to a clean India, a dream of Mahatma Gandhi” said Yuva.

“No one has talked more about the need for cleanliness in India than Mahatma Gandhi. One of his favourite tenets was ‘Cleanliness is next only to Godliness’.  He preached and practised cleanliness all his life, be it cleaning the toilet or sweeping the ashram, he did it all.

Swacha Bharat is indeed a noble mission and one of the most important initiatives to change India for the better. Our Prime Minister must be complimented for mooting the initiative. And, the mission has the opportunity to not just provide a better quality of life for Indians but in the process, contribute to economic growth, create employment and improve health of Indians.  Swacha Bharat mission is aptly planned as a tribute to Mahatma Gandhi on his 150^th birth anniversary in 2019.

However, we need to understand the magnitude of the challenge. Garbage is a result of rapid urbanization and ever growing consumerism in India. Over 31% of India is supposed to be living in urban cities which is likely to grow over 41% by 2040, as per the UN State of the World Population report.  No denying the fact that our rural parts too are unclean.  Therefore the mission has to be thought through better to achieve a sustainable impact.  There are a few distinct measures the Government could consider to drive the initiative.”

“What are those, Sir?” asked Yuva.

“Promote garbage processing industries by giving incentives and paying subsidies for garbage being cleared. A government report says that Bangalore with over 10 MM population, generates around 400 – 500gm of waste per capita each day translating to a staggering 4,000 – 5,000 tonnes of waste each day. The cities have so far addressed the problem by dumping and creating mounds of garbage in the peripheral villages.  With such badly impacted villages rebelling the use of their land for waste dumping, the garbage can be expected to pile up on every street. And one can expect epidemics in Indian cities if we do not act fast.

While landfill is the most widely practised methods of waste management in third world and emerging nations, there are other methods to address the challenge such as Incineration (practised widely in Japan due to paucity of land), Recycling (widely practised in advanced nations), Biological reprocessing, Energy recovery, Resource recovery, Avoidance and Reduction through measures such as banning plastic bags.

With incentives and subsidy paid on every kilo gram of waste lifted which otherwise would have been spent by the government to transport to the landfill, and revenues from by-products such as manure, electricity and recyclable resources, the ventures would become very attractive.  The Government could create special industrial zones around the cities for such industries and also provide tax incentives to make the projects feasible and attractive.  Needless to say, these ventures are bound to create employment opportunities.” said Praja.

He continued “Second, Bring in regulations to strictly implement segregation of garbage at source especially in cities.  Impose heavy penalties such as cutting off water supply, sewerage lines and electricity to homes and apartments that do not strictly adhere to the regulations. Have a mechanism to transport wet, solid and recyclable wastes separately to prevent the municipality workers from mixing up the garbage in trucks as seen at present.”

Praja paused to take a sip of water from his canister and continued “Next, while humans openly defecating in public and open spaces is reducing rapidly in cities, we have a new challenge emerging, courtesy the animal owners. With affluence more Indians are becoming aware of animal rights and it is becoming fashionable to own pets. Nothing wrong with that. It could afterall bring in more humanness in Indians. However, we need regulations including stiff penalties, to ensure animal owners properly manage their pets.  Afterall, they should not create a mess by taking their pets out to public places for them to move their bowels. The little lung spaces in congested Indian cities seem to stink with dog waste and this challenge is only growing. Emergence of an economy is not limited to GDP measures but should also reflect on the quality of life the citizens lead.”

“Lastly, change or refine course curriculum and course contents in schools to bring in awareness about cleanliness. Nations are afterall built with a grand vision backed by training to citizens to support the dream.  And it is best to catch the citizens young and train them on civic sense. We should teach the importance of cleanliness and to avoid littering. One of the favourite habits of a majority of Indians is to spit in the open. In an article that appeared in The Hindu in 2013 and titled ‘the great Indian spit‘, Dr Ramakrishnan former DHS and state TB Officer in Kerala, shares that spitting is one of the primary causes for rampant TB incidents in India. He says one third of TB patients in the world live in India which is not a statistic that we should be proud of.” concluded Praja

“To summate, initiating a drive to clean garbage by senior political leaders is only symbolic. It will only lead to moving the garbage from one side of the road to the other.  We need perhaps the Health Ministry at the centre incidentally headed by a medical doctor Dr. Harsh Vardhan, to have cleanliness as a major agenda for the coming years.  And publish the progress report supported with statistics on every Gandhi Jayanthi day through 2019. We will then be able to celebrate Gandhi Jayanthi in 2019 as Bharat abhi Swach, a tribute to the father of our nation.” said Yuva.

“Active participation by middle class Indians in cities by supporting various regulations is imperative to achieve this noble dream. India is fast becoming a prominent economy; already among the top 10 on nominal terms and third largest economy on PPP terms. Therefore, it can’t remain a third world nation when it comes to quality of life for its citizens. Educating the citizens over a sustained period is important in this initiative.” said Praja as he raised from the seat.

“The end goal is indeed grand however, the means to realise the end must be thought through better.” said Yuva as he bid adieu to his friend and headed back home.

The Education Sector conundrum

Praja heaved a sigh of relief as he stepped into the air-conditioned Coffee Day outlet just round the corner from his home. He had stepped out on a summer morning to run some chores and the heat was getting at him. As he eased into a luxurious couch, a smartly dressed young boy promptly came over to take his order. He ordered for a lemon iced tea and as he was settling down, his young friend Yuva greeted him from a few tables away.

He wished Praja “Good Morning Sir! Long-time-no-see. How are you?” And asked “May I join you at your table?” as he walked across with a cold coffee in hand.

“Ofcourse, young man” said Praja. “Has been a while since we met, trust all is well at your end!”

“All well Sir! I have been busy with my Sister’s admission to an Under-Grad program. Must say it has been quite a stressful experience for all at home. Wonder why education can’t be an entitlement to all Indians!” said Yuva.

“Well said. Education is one of the important tenets of Democracy and is essential for the success of a democratic Nation. Our current literacy rate of 74.04% per last census report dulls in comparison with global average of 84.10%. The current Gross Enrolment Ratio at 19.5% is well below the global average of 26% but our Government is planning to increase that to 30% by 2020 which is laudable. And, we spend an abysmally low 3.1% of our GDP on Public Education. The 12^th Five Year Plan has an outlay of $84B for Education Sector that includes $20B only for Higher Education. Therefore, I do see the situation getting better albeit, slowly. So what is your sister wishing to pursue?”

“She has opted for a career in law with an intent to specialise in IP Laws. She prepared really hard in the past year to appear in the Common Law Admission Test. And you must have heard about how this year’s organising college botched the assessment and further, rumours such as mass copying in Rajasthan are doing the rounds. Learnt there was a mess in 4 out of past 6 years since inception of the test. I read about similar situation in ComedK exams in Karnataka. Wonder why the Government is so lax putting millions of young Indians and their parents to stress. And the credibility of the exams too suffer serious damage.” said Yuva even as the staff from coffee bar served the iced tea to Praja.

Praja took a few sips and relished the cold tea flowing inside him. He looked at Yuva with an approving look and said “Let me share some statistics to show why I am hopeful of a revolution in our education system soon and let me restrict myself to higher education. There are 700 universities and 35,000 colleges with an overall enrolment of 25MM young Indians as per a report from Technopak, a management consulting Firm. The same report states the private Education sector is estimated to touch $115B by 2018 growing at a CAGR of 18%, which is quite a large opportunity. According to an E&Y report there are 150MM Indians in 18-23 age bracket. Therefore, we need private sector to play a big role in creating adequate capacity. And more importantly ensure the graduating talent are employable”.

He continued ” In other words, while we have seen quantitative growth, the sector with the exception of a handful of colleges, has not ensured quality. While the private sector will have the autonomy, there should be controls to ensure quality and value for the investments made by the graduating students.  The sector must also align with industry to create appropriate courses and impart adequate training so that the industry does not start from scratch in training fresh talent. This would address the paradox of desperate lack of employable talent in the industry while the unemployment continues to hover around 7%. You should know that the Services sector accounts for 67% of the GDP while employing 31% of around 500MM workforce. And, this sector thrives on quality talent. Let us remember, the Education sector produces the most valuable resource for our economy, which is talent.  And the Indian Economy cannot progress without a good supply of talent pool.”

“That is a nice perspective, Sir!” said Yuva. “What other areas do you feel we need to revamp?”

“Firstly, we have to drift away from the ‘prescriptive’ methods of teaching that was instituted by British Colonial Rule to suit their needs and instil an ability to ‘apply’ concepts learnt, in the graduating talent. Next, we need to recognise that the students in the age group 18-23 belong to Gen i-Y, those born in the internet era.  Their DNA is different therefore, the education sector has to embrace new methods leveraging technology and social media for teaching. And, encourage research and experimentation to ensure the students internalise the concepts well so that they can apply them when needed later in their career. Formal professional degrees won’t be sufficient, we need vocational courses to meet the demand which in turn could create large opportunities for tier-2 & tier-3 residents. Lastly, we should leverage the favourable demographics to create talent pool for the global markets. As per a US Census Bureau & BCG Report, there is likelihood of serious shortage of working population in most western nations by 2020. USA is expected to be short by 17MM, Japan by 9MM and even China by 10MM while India is likely to have a surplus of 47MM. Therefore, global perspectives need to be instilled in the students along with quality education to adequately prepare them” answered Praja as he finished his tea and called out to coffee bar staff for the bill.

“Interesting insights Sir! A new Central HRD Minister is in place. Though she has started off with a controversy around her own education, I do hope she learns the ropes soon to administer this important ministry – if not for her success atleast for the sake of 100s of millions of Indians. As I now understand, the Government has to play a big role by bringing in reforms to provide necessary impetus for progress of the sector as well as to regulate the constituent institutions” summed up Yuva.

“Young man, remain hopeful. Economies grow in fits and starts. With a stable government in place, ever demanding youth and newly found voice of common citizens, the government has little choice but to provide good governance else they will be booted out in the next elections. And my best wishes to your sister” said Praja even as he settled the bill, thanked the staff, wished Yuva and exited the coffee shop.

Is Democracy at cross roads?

Yuva trudged along and entered his favourite park late morning with a forlorn look. He had read the newspaper of that day early morning and in particular, an article about the events of the recently concluded year. The political events across different nations had left him quite distressed, so much so, he chose to take a brisk walk rather than run.

He was nudged out of his world with the familiar voice of Praja greeting him with a “Good Morning, young man! Don’t be so lost in your world that you miss the beautiful morning”.

“Oh! Good Morning, Sir” said Yuva and continued. “Was lost in my world wondering where countries are headed”.

“What’s troubling you, young man?” questioned Praja.

“The political developments in the nation… corruption, lack of accountability of political leadership, stoppage of development projects owing to political differences and interferences, pile up of important bills in the parliament, a ray of hope through Anna Hazare’s crusade and the recent success of Aam Aadmi Party. Wonder where our nation is headed” replied Yuva and continued “The stalemate in US Congress and value-less debates in UK & Indian parliaments makes one wonder about the very ideals and appropriateness of Democracy in the modern world. The new definition of Democracy appears to be OF the people, BY the people but, FOR a select few” replied Yuva.

“Indeed worrisome, but do not lose hope. Democracy historically, has enabled the progress of nations. Though there are only 25+ true democracies among 193+ UN member countries, this time-tested model of governance seems to be the best. There used to be a greater common vision which ensured unity of the populace in nations, especially democracies. This was the case until World War II. The vision of the past leaders used to be development, progress and peace of mankind. You must realise the past 7 decades since World War II, have relatively been the most peaceful period in the world. And the Democratic Nations have relatively advanced the most. You should know that many world leaders were surprised when India chose to adopt Democracy on gaining independence from British Rule. Such leaders and political scientists continue to wonder how Democracy has taken root in India in the face of a low-income economy, poverty, illiteracy and ethnic diversity? And one of the key tenets of Democracy is education to ensure citizens are aware of the rights. See for yourself… our country has advanced quite a bit on various fronts though we still have around 300 million who need to be drawn out of poverty into main stream. We are the 11^th largest economy and growing rapidly ahead of other nations. A lot of this success can be attributed to our leaders embracing Democracy post-independence.” Praja paused and asked “Are you with me?”

“Very much so, Sir. And I do appreciate your insights. However, if Democracy is indeed the best model of governance then why repeated stalemates in governance, be it in USA or India?” retorted Yuva.

“Well, every model of governance has a flip side too and Democracy is no exception. Democracy needs a common vision to unite the populace. And, we need high quality political leaders who instead of being self-serving, should have nation’s progress as the motto. With peace, progress and prosperity over the past 7 decades and in the absence of any national cause, the ideals have eroded.  There seems to be concentration of power among few individuals. Be it USA or India, we now have political leaders who seem to position self-service ahead of national service! The frequent stalemates and one-upmanship that you see in the parliament is a result of such erosion. Election propaganda no longer revolves around a vision for nation’s progress but deficit in the opponents and governance. A country like India owes a better vision and inclusive growth for progress to the 300MM below poverty citizens. The result is a sense of disillusionment and trust-deficit among the electorate and the nation has to make do with modest electorate casting their votes; a reflection of democratic rights. We had just 59.7% turnout in 2009 Lok Sabha elections” replied Praja.

“That is quite a dismal outlook! Is there any hope?” asked Yuva with a sullen face.

“You are seeing the beginning of change yourself, young man” said Praja with a smile and continued “The populace accept poor governance for a while and revolt when pushed too hard. Anna Hazare’s movement against corruption was just the right trigger that citizens awaited and the movement galvanised support among especially, the youth of the nation. And the not-so-old citizens too were shaken out of slumber and submissiveness. Questions were asked of the leaders. Remember, the rulers become masters when the people are passive, but they are their servants when the people are active. The judiciary too pitched in with Supreme Court’s judgement on convicted lawmakers and political leaders. According to Lord Bryce, a political scientist, indolence and indifference on the part of the citizens are the two enemies of Democracy. The Aam Aadmi Party is the result of pent-up fury of the long-suppressed citizens. And the success of the Party should be no surprise at all. The recently concluded assembly elections in Delhi were a jolt to the national parties. We had 67% electorate cast their votes! Post the elections in Delhi, the AAP movement seems to be rapidly attracting the intellectual community across the nation. And the threat of the movement becoming a challenge to national parties in the Lok Sabha elections is now a reality. But more needs to be done by AAP. The party should drift away from personality based politics like it is in the case of national parties, to evolve a national charter that captures a vision for the nation. And, evolve a democratic structure for functioning of the internal systems. Broom as the election symbol signifies the intent to eradicate corruption but the party needs a vision that survives the founders, focuses on development, retains attractiveness to aam aadmi and lasts for decades. And, there should be a mechanism to address differences between intellectual members which can be expected. Only then will AAP become a good alternate to the national parties. And more importantly, the national parties would finally learn to drift away from personality based functioning to a vision and charter. Either way, India would definitely benefit from the AAP movement. And we should remember passivity in a Democracy among populace never augurs well for the nation. Constant vigilance and active participation in elections by the citizens are some of the key tenets of Democracy. Abraham Lincoln once said Elections belong to the people. It’s their decision. If they decide to turn their back on the fire and burn their behinds, then they will just have to sit on their blisters”.

“I do hope that AAP delivers on its promises and more importantly, sets the tone for national parties to function. The youth of the nation certainly deserve a better India. An India that views progress and prosperity of all sections of population equally. But the youth need to be educated on their responsibilities too. Many thanks for infusing optimism in me, Sir!” said a rejuvenated Yuva with a smile and bid adieu to his wise friend.

A roller coaster year for the Indian Rupee

A joyous guise dawdled on Yuva’s face as he entered his favourite jogging track wearing a bright coloured vest and smart track pants on a wintery morning. Why not? The past year had been pretty good for him on all fronts. He gathered pace after warming up a little. After achieving his target of 5 miles, he slowed down near a granite seat to have a sip of water from his canister. As he lifted his head, he saw his wise friend Praja approaching the bench.

He joyously greeted Praja with a “Good morning, Sir! Long time no see, you were missing for the past few months and I missed our conversations”.

“Good Morning young man, so nice to see you after a long while. I was tied up in a host of things and had to miss my routine in the past months and not so happy about that” said Praja. He continued “So how have you been and how did the past year treat you?”

“Must say it was a good year. Could close many deals and on the verge of closing one of my biggest contracts in my career” replied Yuva. He continued with “almost there on that but for one clause in the contract which leaves me a little baffled” as he steered Praja to the granite seat.

“So what is that?” questioned Praja as he settled down.

“Well… it is to do with the price protection for a slightly longer period and I have had to make a bet on the Rupee exchange rate. I wonder why the Rupee has to be so volatile!” said an agitated Yuva.

“Ha! Ha! The Rupee movement reminds me of a roller coaster. It started the year 2013 at 54.74 to a USD, touched low of 68.80 on August 28^th and has recovered to around 62. Such a wide swing can make global businesses more challenging, but thank god the Rupee seems to have stabilised finally in the past couple of months” consoled Praja.

“Wow! That is quite an oscillation. But what are the primary drivers that decide the exchange rate and what in particular, were not favourable this year?” asked Yuva.

“There are several aspects that drive the rate and let us go over some of the major areas. Firstly, the unfavourable imbalance between Exports & Imports commonly referred to as Balance of Trade that rolls into Current Account Deficit (CAD), led to a sudden and large demand for USDs. The deficit touched almost 4.9% of GDP in the first quarter ending in June which triggered a large demand for USD. As always, such a sudden spurt leads to panic in the market and the Government was compelled to take a host of actions. The action in particular, to curb gold imports should be applauded. While gold is typically a quick resort for investment during such rate fluctuation, it is time Indians learnt not to invest in conspicuous consumption and unproductive savings, in the larger interest of the economy. The Government also curbed investment by individuals and corporations overseas, which I hope is a short term measure. The good news is that merchandise exports were up 12% to $81.2 billion in the quarter ending in September on the back of growth in shipments of textiles, leather and chemical products and imports declined 4.8% to $114.5 billion. The result is that the deficit fell to 1.2% in the Jul-Sep quarter.  The Government is also exploring Currency Swap arrangement with several countries to curb demand on USDs. This is indeed a good measure and would work so long as there is a balance of trade with the partnering nation. While the deficit for the financial Year 2012-13 stood at 4.8% of GDP, the Government’s optimism to keep it at 2.5-3% of GDP in current financial year appears doable” answered Praja with a look to confirm that Yuva was with him in the conversation.

“Secondly, foreign currency inflows make a huge impact on the exchange rate. Historically, India has managed CAD with non-trade inflows. The stock market has fortunately reflected the positivity of an emerging economy and global investors continue to bet on it. Foreign investors have made net inflows of a staggering amount of USD 20 billion in stocks during 2013, while taking their cumulative investments in the country’s equity market to a record level of close to USD 150 billion. However Foreign Direct Investments (FDI) inflows into the services sector declined by about 62 per cent year-on-year to USD 1.36 billion during April-October of the ongoing fiscal. And, a depreciating Rupee attracted more NRI remittances to make up for the shortfall in FDI. According to a UAE report, remittances by NRIs increased by 27% between January and September this year to USD 6.5 billion, which is the highest since 2008 and is likely to close with USD 8.5 billion by end of the year. It is these inflows that have helped the country manage the rate fluctuation to a large extent” continued Praja.

“Third & lastly, we need to remember that the Forex reserves do play a role in deciding the exchange rate. Towards that, I should say we have been quite stagnant at around USD 295B since January 2012 despite the GDP having grown by around 5% last year. There was a depletion of around USD 15Billion during August due to a decline in net capital inflows and higher CAD, which is a cause for concern for the Government as lower reserves weaken the Rupee, which in turn drives out foreign investments” said Praja as he paused for a breath and asked Yuva “Are you with me, young man?”.

“Very much so Sir and many thanks for the insights” replied Yuva. “But a depreciating Rupee must have some advantages too. What do you have to say on that?”.

“Good question. A depreciating Rupee makes Exports in particular, very attractive to global markets. At USD 300 billion, we are the 19^th largest exporter in the world and I believe we can do much better there. With an attractive exchange rate and rapidly rising labour costs in China, several companies seem to be shifting manufacturing base to India, according to an Engineering Export Promotion Council report. This trend along with a USD 110 billion IT&ITES industry continuing to grow at 12-14% annually is good news for India. However, it is for the Indian Polity to bring in necessary reforms to ensure India remains an attractive destination for global businesses” said Praja.

“Very well said, but an emerging nation like India would have its own growth related challenges. How do you foresee the challenges ahead of us?” quizzed Yuva.

“A good question again. A growing nation with a burgeoning middle income population will have its demands especially on imports such as oil. We cannot curb imports unless a substitute is found or an alternate source is identified in India. The Government has to invest on this area significantly to protect India’s future. The newly appointed Governor of RBI is famously quoted We need to fix the problems in the Coal & Gas sectors, for without energy, we do not have power, and without power, there is no growth. These sectors too require advanced technical know-how as well as financial capital. The Government would be expected to enact appropriate laws to ensure supply to meet the growing demand” said Praja.

“It appears appointing a new RBI Governor with global experience when the Rupee was at its weakest point in 2013 could have been the best thing to happen for India and we have started seeing some early results. Also, it appears a new equilibrium has been found with Rupee in the range of 61 to 63 to a USD which, seems to be the new reality for India. Finally, it appears an evolving nation with grand plans should be creative and dynamic to manage integration with global economies even as it manages all macroeconomic parameters well” summated Yuva.

“That was a concise surmise, young man” said Praja and continued “While the past year had its swings I hope the new year has in store pleasant events and peace for the mankind” said Praja as he rose from the bench, bid adieu to Yuva and resumed his walk.

Hypocrisy… as we practice

Yuva was particularly grim faced as he entered his favourite park on a lovely morning to begin his daily run. The serene surroundings and the beautiful bird songs in the park did not cheer him up today. After a few rounds on the jog track he sobered down and let calm descend on him. However, the resigned look continued to prevail on his face.

He was in such a state as he ran on the track that he missed noticing his wise friend Praja. But Praja took the lead by calling out “Good Morning Young Man”.

“Good Morning to you too and extremely sorry for failing to notice you, Sir” greeted Yuva.

Praja continued “You seem to be lost in your own world on this beautiful day. What may I ask, is bothering you today?”. He felt like spending some time to cheer up Yuva and make the day a little better for him.

“Nothing much, the walk from my home to the park this morning was unpleasant and left me annoyed with our environment” replied Yuva.

“Hmmm, you mean the environment we have created! So what in specific bothered you?” asked Praja.

“There was garbage all over, animal faeces, stray dogs barking and threatening road users on the streets. While on the one hand we say India is emerging and is set to become one of the top three economies of the world in the coming decades, we are still unclean out there in the streets. Wonder when and how this will change!” retorted a slightly angry Yuva.

“This is the price we pay for rapid progress, my friend. And there is no easy way out. As a nation evolves the urban centers grow more rapidly and what we are seeing currently is partly the result of imbalance of lagging infrastructure with progress of the economy. And also we should recognise that the populace has to change the mindset in tandem with the progress. We seem to expect the Government to bring in all changes while refusing to participate in the change process. While the infrastructure will get addressed over a period, I am more worried about people’s mindset issue” said a slightly agitated Praja.

“What do you mean, Sir. Could you please elaborate” asked a perplexed Yuva.

“Let us delve into a few areas and start with garbage. As you are aware, the Government of Karnataka has brought into force a regulation on how garbage should be segregated at source into dry & wet waste, to make the downstream process of disposal more efficient and also explore innovative options such as power generation from garbage. And, what has been the support rendered by the citizens so far! Even in residential complexes occupied by elite, educated, civilized middle & upper class, we are not able to manage beyond an average 60% garbage segregation at source. We seem to believe that we should keep only our residential units clean while someone else should take care of OUR garbage once it is disposed. In my view, it is the responsibility of the often cynical middle & upper class to support Government in its efforts” said Praja.

“Next, let us consider the dog menace. Rich Indians believe it is their right to own pets but the same lot use the area around their residential units & complexes for their dogs to clean their bowel. Seldom do you see pet owners carrying gloves and plastic bags to remove their pet dog’s poop! Stray dog menace is only growing and you read stories about dogs biting road users and mauling kids. We often hear arguments on animal rights in various forums but without rendering any support to clear the streets of the stray dogs. This again is an area that cannot be addressed by Government alone without citizens’ participation” continued Praja.

“Are you aware the Government of Karnataka passed the Karnataka Municipal Corporations (Amendment) Bill, 2013 during month of July which imposes penalty for littering, spitting, urinating, open defecation and committing other acts of nuisance on road, bus station, railway station, street, playground, park, and other premises of public utility. In a recently published article on Tuberculosis in the Hindu, Dr. Satyajith Pattnaik says an important aspect of DOTS (Directly Observed Treatment Short course) in the RNTCP (Revised National TB Control Programme) is to reduce the source of infection by converting a sputum +ve patient to sputum –ve stage, as it is noted that a sputum +ve patient can produce about 20 new cases of TB in a year. So it is very important in preventing the occurrence of new cases (incidences) of TB. There were instances of TB diagnosed in grandparents or parents after detecting it (Primary Complex) in their children or grandchildren. The contaminated sputum, spat out by active TB patients, is one of the sources of infection to others; and the “GREAT INDIAN SPIT” the avoidable, unnecessary and ugly habit should be the main reason for harbouring the largest number of TB patients, almost 1/3 of the total TB patients in the world, in India” said Praja and took a deep breath.

“That was insightful, Sir” chipped in Yuva. “The great soul who was born 144 years ago to this day once said Be the change that you wish to see in the World. We could atleast start by practising what we preach and expect of others, before embracing deeper changes to build a greater India.”

“All said I must say that we are progressing albeit slowly. Results of imbalances throw up challenges hence despised, but they do churn up new energy and kindle hope. I remain hopeful my friend, that the youth brigade shall drive the change” said Praja as he bid adieu to his young friend.

Yuva adjusted his newly acquired Bose headphones, turned on his favourite music and resumed his run but with a face that mirrored more hope than defeat.

Mind our business… Should we?

The monsoon had finally taken a respite after showering the city with bountiful rains continuously for many days. Praja who was keenly looking forward to resuming his daily walk routine, ventured out to his favourite park early morning with a cane in hand. He enjoyed the morning serenity and sight of drops of pearls’ like water droplets rolling off the shrub’s leaves. He joyfully wished other familiar walkers as he trudged along the track.

Praja was pleased to bump into Yuva who was jogging from the opposite direction enjoying his music with earphones firmly in place. As they greeted each other with hellos, Yuva chose to pull his earphones off and walk with Praja to have a little tête-à-tête.

“So what is happening in your world, young man” asked Praja.

“Many things, Sir. While I am extremely busy on the work front I cannot help but follow the challenges surrounding the Indian economy. Volatile market & rupee movements, rapid price increase of oil and squabbles between political parties seem to fully fill all possible media. But what is particularly disturbing is a trend of supposedly friendly nations becoming pin pricks to India” replied Yuva in a worried tone.

“What are you talking about?” asked an inquisitive Praja.

“India has been closely associated with Iran and has been a supporter against the backdrop of global economic sanctions. With much reluctance we have reduced our imports from that country even as we are exploring ways such as trading in rupee, to step up trade exchange. Yet Iran chose to seize an oil tanker belonging to India returning home with a load of Iraqi crude oil” said a visibly agitated Yuva.

“There is pattern to this if you read news and observe carefully” said Praja. “Historically, human race has tried to dominate through military warfare. This continued until the Second World War when Adolf Hitler was finally eliminated and Japan’s supremacy in East Asia curbed. Since then we have largely had peace in our world albeit a few short duration conflicts. There has been advancement of science, trade and commerce. And, nations’ expansionist instincts have been fairly under check. What has now emerged is economic dominance which requires new strategies to be a leader and just having the 3rd largest armed force or nuclear arms will not do!”

“Could you provide some deeper insights, Sir” requested Yuva.

“As you are aware, India has evolved from being a third-world nation in nineties to become a noticeable economic power. We are already the 10th largest economy, have a stable, liberal democracy despite being the 2nd largest population in the world, have achieved self-sufficiency in food despite large size of the population, have advanced science and technology capabilities, our nukes and space technology capabilities are becoming renowned, yet we are seen to be a subdued nation. In my view, we are too insular. While there was a justification till last decade to get the nation first on the right track of economic progress, we should in parallel, start building a respectable position in the world order” said Praja and enquired “Are you with me, young man?”

“Very much so” said an eager Yuva, absorbing every word.

“We now need to have a good foreign policy and move away from being non-aligned to take a firm, definite stand on various matters on principle. For example, we could have stood by the principle of Human Rights and supported global nations from the start to charge Srilanka for human rights violation rather than meekly towing the line towards the end. Similarly, our stand in relations with Afghanistan, Nepal, Bangladesh, China, Pakistan and Iran could be lot more definite and clear rather than being very wavery and at times hypocritical. Result is that other nations no longer can expect a definite stand from India or rather they tend to take India for granted. This was evident when even small erstwhile friendly nations such as Maldives and Bhutan depending largely on India for largesse, started challenging us! Being non-aligned as a third-world nation in a bi-polar world made sense, but it is more than two decades since the Soviet Union collapsed!” said Praja.

“In the book titled Does the elephant dance? Contemporary Indian foreign policy published by Oxford University Press, the author David M Malone (erstwhile Canadian High Commissioner to New Delhi) says India’s International policy is still mostly reactive, incremental and without any grand vision. Its few diplomats are good, but terribly overstretched. The world’s biggest democracy is coy to the point of feebleness in promoting its values abroad” concluded Praja.

“To surmise, I should then say, there is a crying need for India to become a part of the world order. Merely contributing to armed forces to support UN peacekeeping efforts is not sufficient. And, seeking a permanent seat in the UN Security council or getting some opinions among the BRICS nations on the side lines of the recently concluded G20 summit is not enough. We need to be willing to pay a price for firm decisions that should be driven on principles rather than remain a passive, populous nation. Else, China will not just stop at building a string-of-pearls in the Indian ocean around Indian sub-continent. And we may fail to create a good nation for our future generations. We need to definitely learn to manage multitude of domestic challenges to build our nation but that should not deter us from evolving a grander foreign policy. While we need not necessarily intervene in the other nations’ affairs, we should be assertive & bold enough to stand by principles & values on decisions that could have global ramifications” said Yuva.

“That was an apt summary, Yuva. See you sometime soon!” said Praja as he bid adieu to Yuva.

“I remain hopeful that India will soon evolve a grander vision for foreign policy. See you soon, Sir” said a slightly vexed Yuva even as he fixed the earphones back and resumed jogging.

Significance of the just concluded week…

After a particularly busy week Yuv decided to hit the jogging track in his favourite park early on Sunday morning. It was in a way, retribution to a couple of evenings when he partied hard… he lived by the popular dictum of working hard and partying harder. He ran many miles on the track and let his mind wander a bit, even as he absorbed the tranquil green surroundings and birds’ sweet chatter. He chose to pause as he reached the seating area.

He was not surprised to be greeted by the familiar voice of Praja “Hello young man, nice to see you working out hard on a Sunday morning. How did this world treat you in the past week?”

“Nice to see you, Sir. It was a great week for work as well as partying hence chose to workout harder today. The media too kept me informed with multitude of news items on varied topics” quipped Yuv.

“So how was the World this week?” continued Praja.

“To start with I believe it was fabulous for Indian cricket. India fought back from bottom of the pool to win the tri-series tournament in West Indies. What a transformation in the grit and determination of the team which not so long time ago, typically cracked under pressure” replied Yuv.

“Hahaha! Given the extensive coverage by the media I expected that of you. I too admired the new found confidence and leadership of our cool headed captain. And, what other events drew your attention?” asked Praja.

“The latest revolution in Egypt where the popular citizen movement supported the army in dethroning President Mohamed Morsi, has a strong message for other democracies. Once citizens taste freedom offered by a secular system, it appears there is no way back. Mr. Morsi driven by conservative ideologies of the Brotherhood attempted some unpopular reforms and paid a price” replied Yuv.

“That is a very strong message to all governments, politicians as well as citizens of democracies. In particular for a young democracy such as India where 50% of the populace is less than 25 years and 65% is less than 35 years of age. If the youth arise for a cause then no government can repel” said Praja. “What about events of significance in India?” asked Praja.

“There were a few sundry items but I do not recollect any particular event highlighted by the media” replied Yuv after jogging his memory for a few seconds.
“That is unfortunately what has become of the Indian media which tends to chase sensational news” said Praja. “In my view there were some events surrounding Judiciary that have far reaching consequences for India, but were not highlighted adequately by the media. On the one hand we demand reforms but fail to encourage the decision makers when they act” continued Praja.

“What were those, Sir?” asked Yuv with keen interest.

“First event was the exchange between the Union Government and the Supreme Court on a judgment made on May 1st, in which the apex court commuted the death sentence awarded to double murder convict M N Das to life sentence on the ground that there was inordinate and inexplicable delay of 11 years on President’s part to reject his mercy plea. The Centre is all set to legally lock horns with the apex court by questioning the court’s powers to call for judicial scrutiny the President’s exercise of constitutional power to grant pardon or commute sentences of condemned prisoners. In doing so, the centre highlighted the significant delays in Indian Judiciary. The rare urgency demonstrated by the apex court as well as the Union Government unheard of a few years ago, augurs well for India. I hope to see this exchange leading to some reforms to speed up the Judicial System in India” said Praja.

“Second event was the apex court’s order on July 10 that said henceforth, MLAs or MPs cannot contest elections if convicted even once. This is the first step in cleaning up the political system. What with 30% or 162 members of 543 members presently in Lok Sabha with criminal cases and, 14% having serious criminal cases against them. And, 31% or 1,258 members of 4,032 total members in state assemblies with criminal cases and 14% here again have serious criminal cases against them. The apex court also made it clear that even standing MPs, MLAs and MLCs would stand disqualified on the date of conviction. The court said Parliament has exceeded its powers by enacting the provision (Section 8(4) of the Representation of Peoples Act) that gives a convicted lawmaker the power to remain in office on the ground that appeals have been filed and pending” continued Praja.

“That is welcome news. This should bring in some seriousness in Indian politics both at individual politician’s level as well as that of a political party. And hopefully, we will no longer have to put up with such candidates on the ballot paper. Am sure the young populace are now saved from being ruled by leaders with history of conviction. But wonder why media did not pick this up as much as the trivia that appear prominently every day” replied Yuv.

“Further to the said judgment, the apex court on the following day said that politicians who are in police custody or in jail will not be allowed to contest assembly or parliament elections. It is a landmark judgment from the apex court, worthy of celebration in a democracy. If India manages to follow this up by prescribing minimum criteria around academics, we will start having educated politicians” said Praja.

“Wow! That sounds even better for us in India. Though I can relate, how would you justify the need for education in politicians” asked Yuv.

“Education enables a leader to develop better perspectives and perform better as seen in various spheres of life. You can dip into history and relate performance with educational credentials of our past leaders for yourself” said Praja with a smile as he got ready to head home.

“De-criminalisation of politics should hopefully be followed by more political reforms in the country with criteria on education, age and experience being prescribed for contesting elections. This would certainly lead to better vision and execution therefore, better progress of our Nation. Where Peoples’ representatives failed, the apex court stepped in; yet again the imbalance has led to reforms” concluded Yuv.

Yuv bid adieu to his wise friend by saying “What a way to start a new week. You have given food for more thoughts to dream of a greater India”. He resumed running on the track more purposefully.

Growth Pangs

Yuv reached the rest area in the garden panting after having jogged many miles. The jog in the serene surroundings after what was a busy work day in the city was rejuvenating. As he gulped some fresh air and got ready to sit down, he saw his wise friend Praja.

“Hey Yuv, how are you and how was the day?” greeted a smiling Praja who had just concluded a brisk walk.

“Nice to meet you again, Sir. It was a productive day at work but was tiring owing to day-long commuting within the city. Traffic congestion, noise and sluggish traffic offset my highs from several good sales calls made today” retorted Yuv. “Wonder when our city will get better and make life easier and likeable” he continued.

“Don’t lose hope young friend, these are the signs of progress of what was just a couple of decades ago considered a third-world Nation. There is no painless path for a Nation’s growth. And, the populace that enjoy the benefits of progress do have to endure pains during the evolution. No pain… no gain! Industrialisation has been core to progress of Nations. And, as an agrarian economy adopts the path of industrialisation, mass migrations happen from rural parts of the country to cities, leading to rapid urbanization. These are the Growth Pangs” said Praja.

“That is a very positive outlook, Sir. So tell me, has every advanced Nation traversed this path?” enquired Yuv.

“Yes indeed. Current urbanization level is high in advanced Nations too… 82% in USA and 80% in UK. 26% in 1990 has grown to 53% in China. Comparatively, it is 31% at present in India which is expected to grow to 40% by 2030. We must recognise though that urbanisation has historically led to more employment and business opportunities even as it increased quality of life. And, it contributes to expansion of middle income groups thereby reducing class divide in the society.” said Praja even as he led Yuv back on the jog track for a cool-down walk.

“This would mean rapid growth of population of cities and stress on infrastructure. In the past two decades Mumbai’s population has grown from 8MM to 18.4MM, Bangalore has grown from 4MM to 8.5MM and New Delhi has grown from 8.2MM to 16.3MM. If we lack visionaries among administrators then the infrastructure typically fall behind to adequately support population growth. This leads to challenges on all fronts… Housing, Transport, Water, Road, Sanitation, Education, Healthcare so on and so forth. For example, due to inadequate mass transport facility the vehicular population has grown rapidly in Bangalore so much so there is 1 vehicle for every 2 residents translating to a staggering 4.20MM vehicles. But remember, no city is an exception and modern cities continue to face challenges … I have experienced traffic jams in cities like Los Angeles, London and Singapore in recent years” continued Praja.

“So how do you see Indian cities get to align with economic growth?” asked Yuv.

“We need to address challenges on multiple fronts. Our present PM has envisaged a need of US$ 1Trillion during 12th Five Year Plan to improve infrastructure, which is a good start. But we need a plan that does not look at current requirement of the cities but prepare Indian cities for 2030 & 2050. The financial outlay appears large but may be inadequate in my view, to meet the future needs. We need to urgently create a conducive environment for Public-Private-Partnerships to augment resources to develop infrastructure. This will incentivise and encourage private enterprises to pitch in – like the Silk board Junction-Electronic City elevated toll road in Bangalore and Bandra-Worli sea link toll road in Mumbai. Afterall it is opening of the markets in early 1990s that has led to such wonderful progress of India in the following two decades. We now need to shed our legacy thinking and change our mind-set while evolving necessary frameworks for future India” said Praja.

“As I understand, urbanization is a given in an evolving economy and we need grander visioning to be able to build a greater India” said Yuv.

“That was indeed a crisp summary given all that I spoke but, a very elevated view. As a student of Economics what do you feel are areas that need to be addressed?” quizzed Praja.

After mulling over for a few minutes Yuv replied “In my view, we need visioning on how India is likely to evolve in the next 2-3 decades. Next, we need a definite separate plan for every urban center that anticipates growth and resultant population. This could envisage various aspects impacting population. We could then create a better framework and support infrastructure to have private enterprises participate in the development process. Some of the measures such as mass transport system and discouragement from owning private vehicles, could be adopted from cities such as London and Singapore. We could disperse investment as well as growth and use it as an opportunity to develop tier-2 & tier-3 towns which will automatically address the need for inclusivity of the larger population in the evolution process by providing better employment opportunities. Lastly, we need some regulations to ensure quality of life in urban centers”.

“Very well envisioned, Yuv. However, there is one other aspect that we could consider which is creating a special status similar to Union Territories in India. I say this because a city like Bangalore with 15% of state’s population contributes 60% of state’s GDP and Mumbai with 16% of state’s population contributes 40% of state’s GDP. Which in my view, creates a need for special measures such as focused administration team, financial outlays, … All-in-all we need some dreams laid out urgently for us to realise the dreams of a greater India” added Praja.

“What are the flip sides to India not addressing the urbanization needs adequately?” questioned Yuv.
“Lack of a vision and planning for urbanization could impact India’s economic development as corroborated by the consulting firm McKinsey in a study. Other related adverse impacts could be larger unemployed population, higher crime rates, lop-sided growth, social unrest, poor quality of life and the likes. While the Political Leadership and Bureaucracy will have to play a big role, I feel citizens too need to own the challenge and participate in the development. One very good sign is the crop of educated youngsters entering Politics & Bureaucracy and more importantly with good vision. And, if Political Leadership fails to act on this crucial area soon, the young Indians shall rise… like what we saw recently in Brazil, Turkey and other European Nations” said Praja.

Saying “Thanks yet again for a lesson in Economics, Sir. I am hopeful India will not waste a great opportunity” Yuv bid adieu to Praja. As he walked back home he had a smile on his face for having had a good day at work and a great discussion to dream a grander India.

Demographic Dividend – Boon or a Bane

Yuva bumped into Praja again as he jogged down the track in a park. The early morning sun was piercing the trees and the pristine air was yet to be spoilt by the urban evil. Having jogged many miles, Yuva wanted to catch his breath.  So the timing was right in bumping into Praja. And, every time he met Praja, he benefited from new insights.

“Good Morning, Sir” wished Yuva even as he panted.

“Very Good Morning, Yuva” responded Praja. “Nice to see you sweating out. And how has your student life been since we met last?”

Yuva being a student of Economics had studied just the previous day about Economic Progress and had come across the word Demographic Dividend for the first time. He decided that he would leverage the chance to seek some views from Praja, who had studied several branches of Economics and his three decades long experience included founding a business.

“Quite hectic. Many new concepts as well as theories and numerous assignments too” jibed Yuva. “One such new concept is around Role of Demographics in a nation’s economic progress. And more particularly, its Dividend to a nation.” He directed Praja towards a vacant seating area in the park and continued “What are your views on the subject, Sir?”

“I know… there are too many new concepts and more importantly, jargons doing the rounds” said Praja with a smile. “I have learnt many new concepts and observed how nations have evolved. And some of the concepts could be quite complex to understand.” Refusing to be seated, he resumed his walk and the outsmarted Yuva had to follow him even before recovering fully from his jog.

“Demographics are the quantifiable statistics of a country’s population. Industrialised nations have largely completed what is called the Demographic Transition – the transition from a largely rural agrarian society with high fertility and mortality rates to a predominantly urban industrial society with low fertility and mortality rates. At an early stage of this transition, fertility rates fall, leading to fewer young mouths to feed. During this period, the labor force temporarily grows more rapidly than the population dependent on it, freeing up resources for investment in economic development and family welfare. Other things being equal, per capita income grows more rapidly too. This window of opportunity in the development of a nation is referred to as Demographic Dividend.” Praja paused to take a breath.

“That was a useful introduction” said Yuva. “Then would you say that India is presently enjoying the benefit?”

“Yes, we are…” resumed Praja. “In the near future too, India will be the largest individual contributor to the global demographic transition. A 2011 International Monetary Fund Working Paper found that substantial portion of the growth experienced by India since the 1980s is attributable to the country’s age structure and changing demographics. The U.S. Census Bureau predicts that India will surpass China as the world’s largest country by 2025, with a large proportion of those in the working age category. Over the next two decades the continuing demographic dividend in India could add about 2% per annum to India’s per capita GDP growth”.

“It appears the present generation in India is in the right place at the right time” said Yuva with a smile. “Two more decades is a wide window for India to leverage the opportunity to get most of our 300+MM suffering citizens above the poverty line”.

“You are right but only if we have good governance” said Praja. “Our political leadership has to realise that we need to ride this window with good governance and implement necessary reforms else, it could be a wasted opportunity. Having said that, I feel India has fared well since 1990s. Ofcourse, the last few years were wasted with minimal attention to governance and reforms but I am pleased to see the focus returning to development. Recent reforms such as FDI in retail, Companies Bill 2012, Fuel subsidy cut-down, and proposed reforms around Sales Tax, Insurance and Pension funds are essential for our economy to progress.”

“Oh! I now realise the importance of debates around reforms better. From what I understand it appears we have to push the pedal harder on reforms to ensure inclusive growth” retorted Yuva.

“You touched an important point on potential social unrest owing to imbalanced growth of an evolving nation which we could discuss when we meet next” said Praja.

“So, what about the impact of India’s Demographic Dividend on global economies” asked Yuva quickly, before Praja could bid adieu.

“One more important point… you are a good student of Economics” complimented Praja. “With over 1.21 Billion citizens, India has more than one sixth of world’s population. India has more than 50% of its population below the age of 25 and more than 65% below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan. A US Census Bureau and BCG Analysis projects staggering workforce shortfall across western nations. The report says there will be a shortfall of 17MM in US, 3MM in Germany, 2MM in UK, 3MM in France, 6MM in Russia, 9MM in Japan and 10MM in China by 2020 while there will be a surplus of 47MM in India.”

Absorbing rapidly all the statistics, Yuva questioned “So what do we need to do to ensure that India’s workforce is not only leveraged well in India but also positioned attractively for global markets?”

“Education reforms” answered Praja. “We need a grander vision to revamp the system to produce talent that are relevant to industry with necessary skill sets. While doing so, we should not only bear in mind India’s requirement but every possible global market.”

“I see the downside of not implementing reforms quickly” retorted Yuva. “India had 9.3% unemployment in 2012 which is expected to rise to 9.4% in 2013. Education reforms could help use such unemployed talent in industries suffering from acute labor shortage. And, we need to see India’s economy grow at a brisker pace even as we make the emerging talent pool employable. Else, the Dividend could become a bane rather than a boon” he summed up.

“Even if the political leadership is lackadaisical in bringing necessary reforms, I am confident the Yuva Shakthi in India shall create a spring to force changes.” said Praja. And, he parted by saying “Until we meet again”.

Yuva thanked and bid farewell to Praja even as he looked for a seating area to gather his thoughts on the subject.