Tài liệu India Economic Summit Implementing India pptx

India Economic Summit
Implementing India
New Delhi, India 14-16 November 2010
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not necessarily reflect those of the World
Economic Forum.
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webcasts of selected sessions. It is available on the World Economic Forum website:
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Other specific information on the India Economic Summit in New Delhi, India, on 14-16 November 2010, can be found at
the following links:
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Programme www.weforum.org/india2010/Programme
Session Summaries www.weforum.org/india2010/Summaries
Webcasts www.weforum.org/india2010/Webcasts
Sub-themes
India’s Implementation Imperative
Security and Sustainability Imperative
Inclusive Growth Imperative
Innovation and Competitiveness Imperative
Contents
> Preface Page 3
> Executive Summary: Implementing India Page 4
> India’s Implementation Imperative Page 6
> Security and Sustainability Imperative Page 10
> Inclusive Growth Imperative Page 14
> Innovation and Competitiveness Imperative Page 18
> Acknowledgements Page 22
2 | India Economic Summit
India Economic Summit | 3
Preface
Co-chairs of the 2010 India Economic Summit
Jon Fredrik Baksaas, President and Chief Executive Officer, Telenor, Norway
Ajit Gulabchand, Chairman and Managing Director, Hindustan Construction Company, India
Ellen Kullman, Chair of the Board and Chief Executive Officer, DuPont, USA
Pawan Munjal, Managing Director and Chief Executive Officer, Hero Group, India
Dennis Nally, Chairman, PwC International, PwC, USA
This year, the World Economic Forum hosted the India Economic
Summit in partnership with the Confederation of Indian Industry
(CII) under the theme “Implementing India”. With over 800
participants from 44 countries convened in New Delhi, the
Summit focused on India’s need to implement a variety of

imperatives to make economic progress more socially inclusive.
After two years of economic growth at 7%, India has succeeded
in turning the trend towards an even more impressive increase
of over 8%. This puts India among the frontrunners of the G20
countries in terms of growth.
However, this mainly domestic-driven development is unbalanced.
The majority of opportunities and wealth associated with this
economic success remains in urban areas, while the majority in
India’s heartland is still waiting for the benefits. The political and
social impacts are driving India’s daily agenda – the call for turning
the rapid economic growth into an inclusive growth is echoed
more and more.
Therefore, the India Economic Summit programme was structured
along India’s imperatives of building critical infrastructure,
expanding skills development, achieving income and gender
equality.
The unbalanced distribution of economic growth is also reflected
in the way India is facing the threat of a water crisis, which is
even more serious than an energy crisis. In both cases, the poor
are particularly hard hit – innovation must be inclusive. And, in
a country with an overwhelming majority of young people, it is
essential to include younger voices in the discussions.
To highlight a significant part of India’s global outreach, there were
specific sessions in the programme devoted to the ways in which
trade and general exchanges with countries in Africa and Latin
America are developing and will shape the future global economic
and political agendas.
To generate insight on India’s competitive strengths and
weaknesses, the India Economic Summit served as an occasion
to launch the study on Using Information and Communication

Technologies to Boost India’s Competitiveness. The study draws
on the findings of the World Economic Forum’s Networked
Readiness Index 2009-2010, which analyses India’s advances
and challenges related to information and communication
technology (ICT) development for enhanced competitiveness and
the creation of a truly networked society.
In addition, the Schwab Foundation for Social Entrepreneurship,
in partnership with the Jubilant Bhartia Foundation, presented the
India Social Entrepreneur of the Year Award.
In the spirit of generating insight and shaping India’s agenda, the
India Economic Summit programme tapped into the collective
intellect, local experience and global insight of its community of
multistakeholders. With the central government in power for just
over a year, the programme was designed to assess where and
to which degree certain implementation needs are progressing.
As a result, concrete recommendations were made on a
variety of topics that will shape the future of India, including the
modernization of India’s agriculture sector, greater transparency,
and making transportation sustainable and safe.
As you read the key points and outcomes presented in this report,
we welcome your thoughts and suggestions as we prepare the
programme for the next India Economic Summit, which will take
place on 12-14 November 2011.
The internal and external challenges India is facing and the way in
which the country is finding appropriate answers and solutions is
compelling – for many other parts of the world as well. Therefore,
we hope that the India Economic Summit will continue to serve as
an important platform for stimulating thoughts, creative solutions
and sharing experiences in a constructive way.
Sushant Palakurthi Rao

Director, Head of Asia
World Economic Forum
4 | India Economic Summit
4
|
In
d
i
a
E
co
n
o
mi
c

Su
mmi
t
Executive Summary
The challenge put before participants in
this year’s India Economic Summit was
to find ways in which India can spread its
rapid economic growth more evenly so
that it reaches the hundreds of millions
of Indians still living in rural poverty. It is
a tall order. While India’s fast-growing,
dynamic economy has become the envy
of the world, its growth has been lopsided.
Opportunities and wealth have flowed

largely to educated urbanites. Those in
India’s heartland are still waiting for the
tide to lift them up. Their impatience and
frustration have become evident in election
results, in rural protests, in simmering
insurrections and, most dramatically, in
the steady march of migrants into India’s
bulging cities. India may have rapid
growth, but it needs inclusive growth.
Over the course of the three-day Summit,
participants offered a wide range of
recommendations. Most centred on a
single, fundamental concept: to make
India’s economic growth broader and more
inclusive, the country needs to take up
late author C. K. Prahalad’s call to stop
looking at rural India as a social problem
and instead see it as a market rich with
opportunities. Technology increasingly
provides the means to offer goods and
services affordably to remote areas –
healthcare, for example. Mindsets need
to change. Governments and businesses
must help release the wealth and
enterprise that lie trapped on India’s farms
and in its villages.
This approach goes beyond seeking
ways to deliver products and services
to rural India profitably and at the same
time raise living standards and create new

opportunities. The most effective way
to achieve inclusive economic growth,
participants concluded, is to remove the
barriers preventing poor Indians from
seizing the opportunities India’s growth is
creating.
Lack of education among rural Indians
remains a big problem, but one that
can be overcome with improved access
to information. Corruption, gender
discrimination and the hazards on India’s
roads, on the other hand, are hurdles only
government and society can remove with
determined policy and regulation. The
principles of market economics, moreover,
are just as true in rural India as they are
in cities. So, scarce resources like power
and clean water, without which rural India
can never advance, will only be available
in sufficient supply there when they are
appropriately priced.
To tackle these issues, the Summit’s
sessions were organized into four sub-
themes:
s India’s Implementation Imperative
s Security and Sustainability
Imperative
s Inclusive Growth Imperative
s Innovation and Competitiveness
Imperative

India’s Implementation Imperative
To avoid social unrest, India needs to use
its accelerating economic growth to push
jobs and skills into the countryside.
s India must boost investment in primary
education and vocational training.
Companies need to help not only
with funding new schools, but also by
staffing them and devising practical
curricula.
s Governments need to remove
subsidies on electricity generated from
fossil fuels and eliminate flat rates for
power consumption.
s The power industry should be
deregulated to stimulate rural
investment. The sector should also be
opened further to private investment.
s India’s cities must be given greater
control over their own finances so they
can invest more effectively in their own
infrastructure.
India Economic Summit | 5
Inclusive Growth Imperative
Achieving inclusive growth in India will
require changing entrenched attitudes.
Government corruption drives away talent,
hiring quotas implicitly underestimate
talent in women, and efforts to help the
poor often fail to recognize that they have

wealth and talent as well.
s Reduce regulations and cut red tape to
eliminate opportunities for corruption.
Governments must compete for talent
with the private sector by restoring
meritocracy and offering reasonable
pay.
s Targets are preferable to quotas when
it comes to achieving gender equality.
s Companies should stop seeing
poor, rural Indians as a cause and
start seeing them as customers and
employees.
s Microloans have created lots of credit
– and controversy – in rural India.
More needs to be done to service
the other side of the rural balance
sheet – deposit accounts, insurance,
remittances and pension products.
Security and Sustainability Imperative
India’s progress so far has turned the
country into a role model for other
developing nations. How it addresses
thorny issues such as agriculture, water
and road safety are adding policy to the
mix of cultural strengths that give India
global “soft power”.
s Governments and corporations must
recognize India’s mostly small farmers
as entrepreneurs and view agriculture

as an industry.
s India needs to impose higher
standards for vehicles and roads, crack
down on violations and create a more
effective emergency service to handle
accidents.
s India faces a water shortfall of 50% in
20 years. To avert a crisis, it needs to
set up a progressive tariff on water use.
s By hewing to its tradition of diversity,
tolerance and non-violence, India
can position itself as a power for
moderation, equity and justice in the
world.
Innovation and Competitiveness
Imperative
To its own people, India’s domestic
challenges may at times seem
insurmountable. But its advances are
not only giving it influence abroad, they
are also making India more globally
competitive.
s With their widespread popularity and
expanding capabilities, mobile devices
should be used to expand healthcare
to poor people in isolated rural villages.
s Investments in solar energy should
be accompanied by a phase-out of
subsidies on fossil fuels.
s Companies looking to build brands in

India need to combine universal appeal
with market-segment customization.
s India should build more economic
bridges with other developing
countries, like those in Africa, with
which it shares similar levels of
development and historical experience.
I
ndia Economic
S
ummit
|
5
Inclusive
G
rowth Im
p
erativ
e
A
c
hi
ev
i
ng
i
nc
l
us
i

ve growt
h

i
n
I
n
di
a w
ill
require chan
g
in
g
entrenched attitudes.
Government corru
p
tion drives awa
y
talent,
hirin
g
quotas implicitly underestimate
talent in women, and efforts to hel
p
the
poor often fail to reco
g
nize that they have
w

ea
lth
a
n
d
t
a
l
e
nt
as
w
e
ll
.
s Reduce re
g
ulations and cut red tape to
eliminate o
pp
ortunities for corru
p
tion.
Governments must com
p
ete for talent
with the private sector by restorin
g
meritocracy and offerin
g

reasonable
p
a
y.
s Tar
g
ets are preferable to quotas when
it comes to achievin
g

g
ender equality.
s Companies should stop seein
g
p
oor, rural Indians as a cause and
start seein
g
them as customers and
em
p
lo
y
ees
.
s Mi
c
r
o
l

oa
n
s
h
a
v
e

c
r
ea
t
ed
l
o
t
s

o
f
c
r
ed
it
– an
d
controvers
y
–
i

n rura
l

I
n
di
a.
M
o
r
e
n
eeds
t
o

be

do
n
e
t
o

se
rvi
ce
t
he

o
t
he
r
side

of
t
he
r
u
r
al

bala
n
ce
s
h
eet –
d
e
p
os
i
t accounts,
i
nsurance,
rem
i

ttances an
d

p
ens
i
on
p
ro
d
ucts
.
S
ecurity and
S
ustainability Imperative
I
n
di
a
’
s pro
g
ress so
f
ar
h
as turne
d
t

h
e
countr
y

i
nto a ro
l
e mo
d
e
l

f
or ot
h
er
d
eve
l
op
i
n
g
nat
i
ons.
H
ow
i

t a
dd
resses
thorny issues such as a
g
riculture, wate
r
a
n
d
roa
d
sa
f
ety are a
ddi
n
g
po
li
cy to t
h
e
mix of cultural stren
g
ths that
g
ive India
gl
o

b
a
l

“
so
f
t power
”.
s
G
overnments and cor
p
orations must
r
eco
g
n
i
ze
I
n
di
a
’
s most
l
y sma
ll

f
armers
as entrepreneurs and view agriculture
as an
i
n
d
ustr
y
.
s
I
n
di
a nee
d
s to
i
mpose
high
e
r
stan
d
ar
d
s
f
or ve
hi

c
l
es an
d
roa
d
s
,
crac
k

d
own on v
i
o
l
at
i
ons an
d
create a more
e
ff
ect
i
ve emergency serv
i
ce to
h
an

dl
e
acc
id
ents
.
s
India faces a water shortfall of 50
%
in
2
0
y
ears.
T
o avert a cr
i
s
i
s,
i
t nee
d
s to
set up a pro
g
ress
i
ve tar
iff

on water use
.
s
B
y
h
ew
i
ng to
i
ts tra
di
t
i
on o
f

di
vers
i
ty,
to
l
erance an
d
non-v
i
o
l
ence,

I
n
di
a
can pos
i
t
i
on
i
tse
lf
as a power
f
or
m
o
d
erat
i
on, equ
i
ty an
d

j
ust
i
ce
i

n t
h
e
wor
ld.
Innovation and
C
om
p
etitiveness
I
mperat
i
v
e
T
o
i
ts own peop
l
e,
I
n
di
a
’
s
d
omest
i

c
c
h
a
ll
enges may at t
i
mes seem
i
nsurmounta
bl
e.
B
ut
i
ts a
d
vances are
not on
l
y g
i
v
i
ng
i
t
i
n
fl

uence a
b
roa
d
, t
h
ey
are a
l
so ma
ki
ng
I
n
di
a more g
l
o
b
a
ll
y
compet
i
t
i
ve
.
s
Wi

t
h
t
h
e
i
r w
id
esprea
d
popu
l
ar
i
ty an
d
expan
di
ng capa
bili
t
i
es, mo
bil
e
d
ev
i
ces
s

h
ou
ld

b
e use
d
to expan
d

h
ea
l
t
h
care
to poor peop
l
e
i
n
i
so
l
ate
d
rura
l
v
ill

ages.
s
I
nvestments
i
n so
l
ar energy s
h
ou
ld
b
e accompan
i
e
d

b
y a p
h
ase-out o
f

su
b
s
idi
es on
f
oss

il

f
ue
l
s
.
s
C
ompanies looking to build brands in
I
n
di
a nee
d
to com
bi
ne un
i
versa
l
appea
l
w
i
t
h
mar
k
et-segment custom

i
zat
i
on
.
s
I
n
di
a s
h
ou
ld

b
u
ild
more econom
i
c
b
r
id
ges w
i
t
h
ot
h
er

d
eve
l
op
i
ng
countr
i
es,
lik
e t
h
ose
i
n
Af
r
i
ca, w
i
t
h
w
hi
c
h

i
t s
h

ares s
i
m
il
ar
l
eve
l
s o
f

d
eve
l
opment an
d

hi
stor
i
ca
l
exper
i
ence
.
6 | India Economic Summit
India’s Implementation Imperative
India Economic Summit | 7
India’s economic growth has regained

momentum in the wake of the global
economic crisis. The government’s aim
now is to raise it to at least 10%. Faster
growth provides India with the means to
expand development into its poorest and
least developed areas. It has no option
but to do so: if India fails to make sure
that investment and opportunities flow
to its poorest regions, more and more
rural Indians will pour into the nation’s
crowded cities, sink into despair, or turn to
radicalism in a desperate effort to achieve
what economic growth has not – social
equity.
There are promising gains to be made by
boosting productivity in India’s agricultural
sector, where 70% of its people make their
living. The more urgent riddle India faces,
though, is how to bring more of the rural
workforce into manufacturing and service
jobs when the workers lack the skills to do
them and when cities lack the capacity to
provide housing. The answer: find ways
to push the jobs and skills out of the cities
and into the countryside where they are
needed.
Recommendations
• CapitalizeonIndia’sHumanCapital
India must boost investment in primary
education and vocational training.

Companies need to help not only by
funding new schools, but by staffing
them and devising the most useful
curricula.
• EmpowerthePowerless
Power’s price must reflect its real
cost. Governments need to remove
subsidies on electricity generated from
fossil fuels to encourage investment in
renewable energy. Likewise, flat rates
for power consumption need to be
eliminated to discourage waste.
• SwitchonthePowerSector
The power industry should be
deregulated to stimulate investment
into poorer, rural areas. In particular,
the sector should be opened further to
private investment.
• De-stressUrbanInfrastructure
India’s cities must be given greater
control over their own government.
This will enable them to collect taxes
they can invest more efficiently in their
own infrastructure.
Capitalize on India’s Human
Capital
India’s educational system is the root of
the country’s economic success but is
also to blame for many of its failings. India
has the largest number of illiterate people

and the lowest educational standards in
the G20. Every year, 12 million Indians join
the workforce, yet few have even a high-
school education. As a result, India faces
a critical shortage of tradesmen – from
carpenters and electricians to pipe-fitters
and plumbers.
“We tend to think of rural
development as something for
government. But the private sector has
an equal role to play.”
Chanda Kochhar
Managing Director and Chief Executive Officer,
ICICI Bank, India
8 | India Economic Summit
What is needed is new focus on and
investment in primary education, English
literacy and vocational training. The private
sector has a critical role to play in providing
improved vocational training, either by
offering apprenticeships or by working
with the government to make sure that
training matches the skills employers
need. Many believe that might be best
achieved by turning more of education
over to the private sector, thereby ensuring
that competition provides higher quality at
lower prices.
Empower the Powerless
Power is a key to development: power

drives telecommunications, which in
turn transmits information and access to
markets, training, healthcare and financial
services. While India’s power grid is
expanding by almost 10% every year, two-
fifths of the country still has no electricity.
The lack of clean, affordable power and
other major infrastructure remains one of
the biggest obstacles to India achieving
sustainable and inclusive growth.
India’s poor are willing to pay for reliable,
affordable power as long as it is fairly
priced. Flat rates for consumption only
“The demographic dividend can only
happen if you educate the young. If
not, it will be a disaster.”
Hari S. Bhartia
Co-Chairman and Managing Director, Jubilant
Bhartia Group; President, Confederation of Indian
Industry (CII), India
Source: World Bank World Development Indicators (2010); NSF Science and Technology Indicators 2010
India Economic Summit | 9
reduce profitability, encourage waste and
discourage investment. Consumers should
therefore pay for the power they use.
Likewise, subsidies on power generated
by fossil fuels need to be eliminated;
they discourage investment in renewable
energy. Likewise, the long-term costs of
pollution need to be included in the price

of energy.
Switch on the Power Sector
Investment in new power projects is
hindered by a shortage of money from
domestic stock markets and from
domestic lenders. Financial institutions,
bond markets and equity markets need to
be further developed so that India’s own
savings – and not just foreign funding –
can be channelled more effectively into key
infrastructure. Therefore, barriers to private
investment in power should be removed.
Separating the industry into its component
parts – generation, transmission and
distribution – would promote greater
competition and reduce prices.
De-stress Urban Infrastructure
No matter how fast or how well India
develops its rural areas, it will still need
to tackle the urgent problems in its
congested cities. India is already working
on a US$ 20 billion, seven-year urban
renewal plan, but much more will need to
be done. With nearly 70% of all jobs being
created in cities, the proportion of Indians
living in cities is projected to rise from three
in 10 today to two in five by 2030. That
will leave 68 cities with more than a million
residents, an expansion that will require
what some estimate as at least 90 million

new dwellings and US$ 190 billion in
additional infrastructure.
Indeed, by 2030 the economies of
India’s largest cities will be larger than
those of many countries. Metropolitan
governments, therefore, need to take
on more prominent and independent
roles, including controlling their own tax-
collection and spending. In this way, they
can better raise money and determine how
to invest it in improving their infrastructure.
Metropolitan governments need to create
clearer mechanisms for pricing land to
reduce property prices, thereby stimulating
investment in new infrastructure and
low-cost housing. Cities will need land,
so efforts must be made to clarify the
conditions under which they can acquire it
and how much they should pay.
10 | India Economic Summit
Security and Sustainability Imperative
India Economic Summit | 11
India is facing its dilemmas and developing
new models for mitigating risk and
ensuring sustainability while respecting its
democratic pluralism.
India’s most daunting challenges
when it comes to sustainability are
addressing water scarcity (see Water
box), modernizing agriculture, improving

transportation and encouraging ethical
and balanced consumption. As it moves
forward to tackle these issues, India is
positioning itself to become a new kind of
superpower – one based less on military
might than on “soft power”.
Recommendations
• ModernizeAgriculture
Governments and corporations must
begin to treat India’s mostly small
farmers like entrepreneurs, and view
agriculture as an industry.
• MakeTransportationSustainableand
Safe
India needs to impose higher
standards for vehicles and roads, crack
down on violations and create a more
effective emergency service to handle
accidents.
• BecomeaSuperpowerforGood
By hewing to its diversity, history of
tolerance and tradition of non-violence,
India can position itself as a power for
moderation, equity and justice in the
world.
“You have to consider agriculture not
as subsistence, but as a profession.”
Ellen Kullman
Chair of the Board and Chief Executive Officer of
DuPont, Co-Chair of the India Economic Summit

“We need to engage in public-
private partnerships with farmers to
take technologies to the land and
help them realize better prices.
Government [also] needs to repeal
archaic laws that are detrimental to
business.”
Raj Jain
President and Chief Executive Officer, Wal-Mart,
India
Modernize Agriculture
Public subsidies, especially for water,
need to be reformed, reduced or
eliminated. Regulations should encourage
private sector investment, public-private
partnerships and even contract farming.
Policies should address the entire value
chain, starting from the demand side,
from plate to plough. One important step
would be to create a single market for
the entire country, slashing trade barriers
between states. Infrastructure, notably to
improve distribution, cannot be ignored.
Deregulation of retail activities would mark
another major step forward.
Indian public policy has been evolving from
patronage networks to a system of rights.
This has extended beyond conventional
areas like civil rights to novel concepts like
the right to food, including the changing

needs of individuals over their life cycles
(e.g. infant nutrition), enabling factors
such as water, distribution networks and
systems, and post-harvest technology.
At present, agriculture accounts for only
about 17% of the nation’s GDP, but it is
the main source of income for more than
60% of its citizens. For any scheme to
work, therefore, it will need to reflect new
thinking on farmers and their work, treating
farmers as entrepreneurs and agriculture
as a profession.
“We were already a superpower
when Gandhi was living. We had
non-violence, something nobody else
had. We could have taken that to the
world.”
Joseph Madiath
Executive Director, Gram Vikas, India; Social
Entrepreneur
12 | India Economic Summit
“We need to be consulted and not
treated as if we are naïve. Farming is
a business. You should learn to work
with farmers as partners.”
Chengal Reddy
Co-Chairman, Indian Farmers & Industry Alliance
(IFIA), India
“You can bring road deaths down to
zero through good design – roads

that discourage speeding and keep
pedestrians, cyclists and cars apart.”
Dinesh Mohan
Professor of Transport Research and Injury
Prevention Programme, WHO Collaborating
Centre, Indian Institute of Technology Delhi, India
“For a country that invented yoga, [it
is odd that] we did not learn to stretch
until China forced us to.”
Anil Gupta
Chair and Professor of Strategy, INSEAD,
Singapore
Make Transportation Sustainable
and Safe
India’s alarming rate of 100,000 traffic
fatalities per year can be reduced
drastically with a few significant yet simple
steps:
• Better road design to discourage
speeding and to provide separate
spaces for motorists, cyclists and
pedestrians
• Driver and pedestrian education
• A crackdown on traffic violations
• Regulations for automobile design
and maintenance to ensure that
manufacturers build safer cars and that
owners keep them roadworthy
• Effective emergency rescue services
for victims

Despite India having a more agrarian
population, a smaller population and fewer
cars than China, India’s traffic fatality rate
surpassed China’s four years ago and
the toll has continued to rise ever since.
Recognizing the gravity of the situation, the
government introduced the National Road
Safety and Traffic Management Board Bill
2010 to create an oversight agency for
road traffic safety.
Culture does not determine road behaviour
and India’s traffic deaths do not appear
to vary from region to region. Yet, cities
have their own cultures of safety or
recklessness. In Delhi, for example,
research has shown that some people will
not use the metro rail system because they
think it is too dangerous to walk to the
stations.
Become a Superpower for Good
Indians appear to have little ambition as
a superpower in the conventional sense,
with a broad influence backed by military
might like the United States, the former
Soviet Union or China. Instead, they
seem to prefer using non-military “soft
power” (political, economic and cultural)
to influence what most experts believe is
a multipolar world no longer dominated by
the US. India’s song, dance and drama are

its emissaries. Its diversity and traditions
of tolerance and non-violence give it the
credentials and qualifications to become
a calming power, a trusted mediator
in a world riven by Islamophobia and
anti-Americanism. India should therefore
strive to become a “super-caring power”,
ensuring equity and justice for its own
citizens and encouraging other nations to
emulate its example.
Source: World Bank
Emerging markets agriculture value-added
Agriculture represents a larger portion of India's
economy than in other emerging nations
45%
40
35
30
25
20
15
10
5
0
Agriculture value-added (percentage of GDP)
2008200520001995199019851970 1975 1980
India
China
Turkey
Russia

Brazil
Mexico
Indonesia
India Economic Summit | 13
“The most important thing to do in
India is price resources sensibly. In the
name of helping the poor, we under-
price them, and that leads to waste.”
Adi B. Godrej
Chairman, The Godrej Group, Godrej Industries,
India
How Will India Avert a Water Crisis?
Water might be a human right but, like other scarce goods, it needs to have a price so
that people will have an incentive to use it wisely, conserve and recycle.
India has 14% of the world’s people but only 4% of its water, and projections show
that India will have a water shortfall of 50% in 20 years. The water crisis facing India
is more serious than the energy crisis: the supply of water cannot be increased. The
Earth contains the same amount of water that it did in the Mesozoic era. So, as the
population grows, the water supply per capita falls correspondingly. In 1951, India
had 5,700 cubic metres of water per capita. That figure stands at 1,700 cubic metres
today and is expected to fall below 1,000 cubic metres in a decade.
Under the current system, with no revenue streams to encourage investment, large
numbers of poor people have no access to running water. As the saying goes, the
poor cannot afford free water. Tiered pricing, under which the first tranche remains
low so that people can meet their most basic needs, would ease the burden on the
poor. Grants for low-income customers could also be used to make sure they get
enough water. While low-volume users would get discounted rates for their water,
people who want to wash their cars would pay dearly for the privilege.
Without a price for water, command-style rationing offers the only serious alternative
to reduce consumption. Pricing water also seems to offer the only effective strategy

to ensure water husbandry and conservation. The irrigation efficiency of Indian
agriculture is around 24-30%, much lower than in other parts of Asia. More efficient
agricultural and irrigation techniques could produce a 40% savings in water use.
When farmers start receiving water bills, they would shy away from water-intensive
crops such as sugar cane. Industry would find it more economical to treat and recycle
waste water, and manufacturers would be incentivized to offer water-efficient products
or products that require less water to produce.

Indians, like people all over the world, must realize that water is not free. “For other
scarce things, people expect to pay,” said Montek Singh Ahluwalia, Deputy Chairman,
Planning Commission, India. “But they don’t think they have to pay for water. There is
a widespread belief that it is a gift of God and that it is the function of the government
to make water available cheaply.”
14 | India Economic Summit
Inclusive Growth Imperative
India Economic Summit | 15
Achieving inclusive growth in India will
require changing prevalent attitudes about
the relationship between government and
the governed, between men and women
and between capitalists and those with
little capital.
India’s pervasive corruption is a tax burden
that weighs most heavily on the poor.
India tied with Liberia to rank 87th out of
178 in Transparency International’s latest
Corruption Perceptions Index (178 being
the highest perceived level of corruption).
High-profile cases dominate the headlines,
but it is in India’s sprawling bureaucracy

that the country’s petty corruption
proliferates and thrives. Corruption feeds
discontent and fuels rebellion. Yet, India’s
political system has become riddled with
special interests, dynastic politics and rent-
seekers. Talented young people no longer
strive to lead their government; they aim to
run big companies.
Women remain an underutilized resource
in India. Even as they start to outnumber
men in the country’s engineering and
management schools, the Forum’s Global
Gender Gap Report revealed that India
has the lowest proportion of females in the
workforce among G20 economies.
Women are by no means the only
segment of India’s population that remains
marginalized, however. More than nine out
of every 10 Indian workers are informal,
undocumented and often migrant. Two-
thirds of the nation’s population still lives
in rural India, which still produces close to
40% of India’s GDP. Yet, rural Indians keep
fleeing to the cities. By 2012, 250,000
Indian villages will have broadband Internet
connections. Less than 60,000 will have a
bank branch.
Recommendations
• CreateTransparency;Foster
Leadership

Reduce regulations and cut red tape to
eliminate opportunities for corruption.
Governments need to lure India’s best
and brightest by restoring meritocracy
and competing with the private sector
for talent.
• FosterEquality
Targets are preferable to quotas when
it comes to achieving gender equality.
• InnovateRuralEntrepreneurship
Companies must stop seeing poor,
rural Indians as a charity case and
start seeing them as customers and
employees.
• TaptheWealthoftheUnbanked
Microloans have created lots of credit
– and controversy – in rural India. More
needs to be done, though, to service
the other side of the rural balance
sheet by offering deposit accounts,
insurance, remittances and pension
products.
“The private sector needs to
understand that they are now
expected by society to play a role
that goes beyond the role for which
their business was created. They have
a transformational role to play.”
Ajit Gulabchand
Chairman and Managing Director, Hindustan

Construction Company, India; Co-Chair of the
India Economic Summit; Global Agenda Council
on Urbanization
“A lot of us companies think that
the [corporate social responsibility]
that we do could be called inclusive
growth. But many times it’s not. Many
times we’re about giving corporate
welfare. More important is to pull
these people onto the economic
ladder. You need to go that extra mile
– that last mile – to extend economic
benefits to all these people.”
Pawan Munjal
Managing Director and Chief Executive Officer,
Hero Group, India; Co-Chair of the India
Economic Summit
16 | India Economic Summit
Create Transparency; Foster
Leadership
Companies and governments need to
restore the allure of politics and bring
India’s best and brightest back into the
realm of policy. The government must
create a clear, merit-based system that
rewards performance. Likewise, it needs
to start competing with the private sector
for the country’s most talented individuals
with a recruitment programme that
offers competitive salaries (which would

coincidentally help reduce the temptation
to be corrupt).

Business has a role to play by facilitating
more frequent exchanges between the
public and private sectors. Companies
should encourage employees to consider
rotations in government as part of their
career development, even as a key
performance indicator.
Foster Equality
Quotas for hiring and promoting women
have been largely successful in India, but
have some negative side effects: they can
undermine confidence in talent, discourage
retention and foster resentment. Making
targets for gender-balance part of a
“India seems to be accepting the
principles of caste and dynasty. It’s
replacing meritocracy.”
Arun Jaitley
Leader of Opposition, Rajya Sabha, Parliament of
India, India
India Economic Summit | 17
manager’s performance criteria is a
more effective way to encourage greater
participation by women. Managers who
effectively integrate women into their
workforce will usually find that the results
speak for themselves. Companies need to

create a work environment that enables all
employees to tailor their work goals to their
personal lives. For women, this means
offering flexibility through maternity leave
and part-time work, and allowing them
to work from home or at offices close to
home when circumstances require it.
Innovate Rural Entrepreneurship
The public now expects the private sector
to play a transformational role in Indian
society. Companies need to forge new
business models that generate products
and services for the poorest segments of
the population, particularly in rural areas.
Finding these models will require disruptive
innovation. The spread of cellular
telephony is one example: economies of
scale helped spread network coverage
to rural areas and produced affordable
handsets. The Nano car, which sells for
below US$ 2,000 (INR 100,000), is another
example of how India uses “Ghandian”
engineering to produce more value with
less cost for more people (MLM).
Companies that produce these MLM
products often find that they also sell well
among more affluent consumers. And poor
consumers who buy the products become
champions for them, sharing the benefits
of the products with the community and

promoting the benefits to other potential
customers.
Tap the Wealth of the Unbanked
Banking – savings accounts, remittances,
insurance and pensions – must be
extended to the rural sector to harness
the savings of the poor and to ensure that
the risks and rewards of microlending are
shared with rural communities – not just
with wealthy investors.
Savings are more important than credit to
the poor. With no safe place to put their
money, they have to store their wealth in
gold and livestock. This gap represents a
great opportunity for financiers. Banking
is often more profitable than lending, and
a borrower who is also a depositor tends
to be not only a loyal customer, but also a
better credit risk.
Banks, microlenders and non-bank
finance companies should team up with
each other and with telecommunications
providers to devise new services tailored
for poor, rural areas. Mobile phones in
particular are proving indispensable as
portable automated teller machines,
capable of handling bill payments, money
transfers and just about any transaction
but disbursing actual cash.
The government must, however, impose

stricter oversight and regulation over
the microfinance industry to prevent
abusive practices. It should also remove
restrictions that prevent microlenders
from taking deposits. Current legislation
allows almost any non-bank company to
take deposits as a contractor for banks.
Microfinance institutions have a valuable
customer database that would help them
more rapidly identify potential depositors.
Allowing microlenders to get into banking,
moreover, would help them better balance
their exposure to poor, rural borrowers and
better match their cost of funds to lending
rates.
“If you create a product for the poor,
even the rich will buy it. But if you
make a product for the rich, only the
rich can buy it.”
Raghunath A. Mashelkar
President and Bhatnagar Fellow, National
Chemical Laboratory, India; Global Agenda
Council on Emerging Technologies
“The private sector needs to
encourage the movement of talented
individuals into the public sector.
There needs to be an expectation
that, to progress in an organization,
you should have this kind of
experience – either on secondment or

rotation.”
Dennis Nally
Chairman, PwC International, PwC, USA; Co-
Chair of the India Economic Summit
18 | India Economic Summit
Innovation and Competitiveness Imperative
India Economic Summit | 19
A new term is gaining currency among
Africans to describe a unique combination
of ingenuity and inventiveness: Indovation.
To its own citizens, India’s domestic
challenges may seem insurmountable and
a concept like Indovation may even sound
cliché. But for other countries buffeted by
similar difficulties, India’s advancement
provides both inspiration and practical
lessons (see New South box). Yet,
Indovation is not only providing a model
for other nations to follow; Indovating
solutions to its problems at home is
making India more competitive abroad.
With its vast territory, huge population and
broad social diversity, India is a microcosm
of the complexities facing the rest of the
world. Wrestling with tough issues at home
gives Indian executives a chance to hone
their competitive skills, girding them for
international expansion. Examples run the
gamut – from brand-building to efforts to
boost manufacturing output. Technology

can help India address chronic problems
like providing healthcare and electricity to
millions of poor people scattered in far-
flung rural villages.
Recommendations
• ShapeIndia’sMobileHealth
Ecosystem
With their widespread popularity
and expanding capabilities, mobile
devices should be deployed to provide
healthcare, especially to poor people in
isolated rural villages without clinics.
• CreateandFinanceIndia’sSolarFuture
Investments in solar energy should
be accompanied by a phase-out of
subsidies for fossil fuels.
• SellSpecializedProductswith
UniversalBrands
Though they seem contradictory,
universalization and customization
offer the two best ways for Indian
companies to build and sustain strong
brands in a country as diverse as India.
Shape India’s Mobile Health
Ecosystem
India’s healthcare system needs massive
additional investment. About 70% of the
population lives in villages with no access
to care. Healthcare delivery in India has
typically followed a top-down approach.

Yet, no matter how fast they move to build
new hospitals and clinics, public health
officials are always playing catch-up as the
population continues to grow.
Roughly 600 million Indians now have
cellular phones and it is estimated that an
additional 50 more mobile phones are sold
every second. Politicians have promised
to deliver world-class infrastructure – in
this case, broadband access – to 250,000
villages by 2012. Cellular devices therefore
offer an effective way to reach much of the
bottom of the pyramid with healthcare in a
way that is localized, effective, affordable
and scalable.
“Mobile operators should take the
high ground and say that they are
delivering mobile health; they are
enablers.”
Jon Fredrik Baksaas
President and Chief Executive Officer, Telenor
Group, Norway; Co-Chair of the India Economic
Summit
20 | India Economic Summit
Mobile health technology can empower
frontline community healthcare providers,
including accredited social health activists
working at the village level, by giving
them mobile access to basic information
such as checklists, reminder systems

and immunization records. Mobile health
technology will also enable patients
and healthcare providers to access
holistic, cradle-to-grave health records.
With 3G and 4G broadband cellular
communications on the horizon, there is
potential to use cellular networks to help
prevent and manage chronic disease,
offer consultation, make diagnoses and
prescribe treatments.
Create and Finance India’s Solar
Future

Solar energy offers an enticing value
position for India: clean and abundant, it
also lends itself to small, local production
without relying on connection to the
national power grid, which in India’s case
suffers transmission losses of up to 30%.
But solar energy only becomes
economically feasible once subsidies
for fossil fuels are eliminated. Imposing
a carbon tax would also be a powerful
incentive; a tax on coal, for example,
would raise its price closer to its true cost
in terms of pollution and CO
2
emissions.
India plans to install 20 million solar
lights and 20 million square metres of

solar thermal panels to generate 20,000
megawatts by 2022. To meet these
ambitious goals, vast amounts of capital
will be required. The government needs to
define the mix of debt and equity and pave
the way for this investment.
Existing policies, such as trade in
renewable energy certificates, feed-in
tariffs, solar energy purchase obligations
and accelerated depreciation are working
well. But to attract more finance, lenders
need greater predictability. The solar tariff
structure is unclear, and power purchase
agreements must be more strictly defined.
Sell Specialized Products with
Universal Brands
India is segregated not just by geography,
language and ethnicity, but increasingly
by wealth, income and spending power.
Some analysts have even identified several
different levels within India’s middle class.
This diversification of the market makes
life challenging for companies trying to
market to India’s vast population. They
must be aware of India’s many dialects,
its rural-urban divide and varying levels of
education.
“Fifteen years ago, we never could
have imagined mobile health. Today
the debate has shifted. It is not

about whether mobile technology
can be used to deliver good quality
healthcare, but how to do it in the
most efficient and cost-effective
manner.”
Sachin Pilot
Minister of State for Communications and
Information Technology of India
India Economic Summit | 21
Marketers can overcome the differences
by identifying their brands with themes that
appeal to a broad cross-section of Indians.
Cricket and Bollywood are two good
examples. For instance, Yahoo features 20
different sports in its international content,
but in India puts extra emphasis on cricket.
Customization includes tweaking global
products to Indian tastes, as in Lays’
curry-flavoured potato chips or Taco Bell’s
vegetarian burritos. And though most of
its Indian users understand English, Yahoo
found that its Hindi language content
became much more popular than originally
expected.
Companies can also win market share by
addressing the specific needs of various
sub-groups in Indian society. For example,
a publisher can print dozens of versions
of its best-known newspaper in different
dialects, and a television network can

adjust its programmes to cater to regional
markets.
The New South: Developing the Africa-India Partnership
The new era of South-South cooperation embodied in the growing relationship
between India and Africa promises to become a hallmark of the global economy. “The
India-Africa partnership is going to be a defining one in this century because of the
resources, both natural and human,” said Anand Sharma, Minister of Commerce and
Industry of India.
South-South trade has become increasingly important since the beginning of the
global financial crisis, and Indo-African trade alone jumped to more than
US$ 46 billion in 2009. It could more than double in the next five years.
“We see Africa’s relationship with Brazil, India and China as strategic,” said Raila
Amolo Odinga, Prime Minister of Kenya. “They are important in the quest for socio-
economic development of our continent.”
The New South stands in contrast both to the old South that emerged out of the Non-
Aligned Movement of the mid-20th century and to the North-South relationship that
has revolved primarily around development assistance, the prime minister said. High
on the list under this new approach are science and technology transfers and the
creation of value-added products from Africa’s abundant raw materials.
Cooperation can be especially fruitful given the similar demographic profiles India
has with many African nations. “We are a young country, the same as [countries in]
Africa,” said Sharma. Already, one in three people on this planet is Indian or African,
and the percentage is likely to grow.
Africa sees India as a partner that can help it build its ports, roads and airports, offer
goods and services to its consumers, and help with building the skills of its people.
India has already been helping to build capabilities and institutions in African countries
over the past few decades and, more recently, has been building e-networks to link
African universities and hospitals with those in India. Young Africans have come to
India to study for decades – there are currently 15,000 African students in India.
India’s development holds important lessons for Africa as it emerges from decades of

dictatorship. The business model of some Indian telecom companies, for instance, is
relevant to African conditions. Indian cellular companies also have experience of rolling
out networks deep into remote, rural areas, which is what Africa needs. The African
market is waiting to explode, given the right product and service at the right price.
China may have a greater presence in Africa at the moment, but India has a special
relationship with the continent. Not only do India and African countries have a shared
history of colonialism, but Mahatma Gandhi spent 22 years in South Africa, where he
conceived his principles of non-violence and began to forge the political links between
Indian and African leaders that have become so important after independence.
“For more than 27 years, we have
been challenged by the healthcare
requirements in India and inspired by
our ability to respond. However, it
has been a top-down model. Mobile
health has the potential to create a
market led by a bottom-up initiative
where healthcare is accessible for
all.”
Sangita Reddy
Executive Director, Operations, Apollo Hospitals
Enterprise, India
22 | India Economic Summit
Acknowledgements
TheWorldEconomicForumwouldliketothanktheofcersandstaffoftheConfederationofIndianIndustryfortheirpartnershipinthe
IndiaEconomicSummit.
TheWorldEconomicForumwishestorecognizethesupportofthefollowingcompaniesasPartnersoftheIndiaEconomicSummit:
Strategic Partners
Abraaj Capital
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Accenture

Apax Partners
AUDI AG
Bahrain Economic Development Board
The Boston Consulting Group
CA Technologies
Clifford Chance
Deloitte
Deutsche Post DHL
Dubai Holding
GE/NBC Universal
Infosys Technologies
KPMG
Mahindra Satyam
McKinsey & Company
Merck & Co.
METRO Group
Morgan Stanley
News Corporation
Nomura Holdings
NYSE Euronext
Omnicom Group
PepsiCo
Publicis Groupe
PwC
Reliance Industries
Siemens
Thomson Reuters
Unilever
Wipro
NYSE Euronext

Omnicom Group
Standard Chartered Bank
System Capital Management
Troika Dialog Group
Zurich Financial Services
Meeting Supporters
Greater Paris Investment Agency
Oil and Natural Gas Corporation (ONGC)
Religare Enterprises
Host Broadcaster
NDTV Profit
India Economic Summit | 23