by Rakesh Mohan
20. Hope springs eternal!
21. If our R & D statistics are of poor quality and out-of-date, our employment data is simply awful. For example, the total registered employment in the country in construction is 1,20,000 and in retail 6,00,000. If manufacturing employment is as under-reported, then all is robust and healthy!
22. Economic Survey 2014–15.
23. The knock-on benefits from vertical integration is not a new idea. Albert Hirschman wrote about it in 1958 in The Strategy of Economic Development. (Boulder, Colorado: Westview Press, 1988).
24. National Science Foundation, Science and Engineering Indicators, 2016.
25. ‘Currently, India has as many as 847 MNC R & D centres, representing about 83 per cent of the top 100 global R & D spenders and half of the top 500 global R & D spenders’: ‘FDI can spur innovation, ideas and industries’, Rediff.com, 8 August 2014, http://www.rediff.com/business/report/column-fdi-can-spur-innovation-ideas-and-industries/20140808.htm; Centre for Technology, Innovation and Economics.
26. In our book, From Followers to Leaders, Dave Wield and I argue that firms should build the capability of pushing out the design frontier within a particular technological paradigm. Our argument was that the design and technology frontiers were distinct, and that pushing out the design frontier was an attractive way of adding value in products without the risk involved in attempting to push out the technology frontier: in other words, let the world’s rich firms make the expensive mistakes. But building design leadership takes serious investment in skills and building R & D competences, which few Indian firms have today.
27. Many in the software industry would argue with my use of the term ‘labor arbitrage’ today, pointing to the substantial capabilities built up in large-scale project management and execution excellence. I agree, but what share of our total software sector would exist if we needed to pay salary levels local to the market?
28. See Roger Noll, ed. Challenges to Research Universities (Washington DC: Brookings, 1998), 18. The emphasis is mine. The quote is from his introductory chapter, ‘The American Research University: An Introduction’.
29. Ibid. The emphasis is mine. The policies that affect the building of technical capability most fundamentally are beyond those specifically concerning technology. Trade Policy and openness are usually more important than Research Policy. Education Policy affects a firm’s ability to build technical capability more directly than a tax subsidy for carrying out R & D.
30. I owe this insight on lead markets to Gopichand Katragada, the CTO of the Tata Group.
Chapter 27: Consumer India’s Journey from Zero to Hero
1. ‘Rs 60,000-cr Loan Relief to Farmers to Stimulate Economy: FM’, Outlook, 29 February 2008.
2. Arjun Appadurai, ‘Disjuncture and Difference’, in Modernity at Large: Cultural Dimensions of Globalization (Minnesota: University of Minnesota Press, 1996).
3. ‘Household Consumer Expenditure’, National Sample Survey, 1993–2015.
Chapter 28: Building a Global-scale Corporate in India
1. Angus Maddison, The World Economy, Development Centre of the Organization for Economic Cooperation and Development, January 2006.
2. ‘India 1991 Country Economic Memorandum’, World Bank, 23 August 1991.
3. Manoj K. Sharma, ‘Tax Reforms in India’, in Financial Administration in India: Changing Contours and Emerging Challenges, edited by R.K. Gupta and P.K. Saini (New Delhi: Deep & Deep Publications, 2008), 28.
4. Harish Damodaran, ‘In Fact: The Old Pecking Order Changeth’, Indian Express, 21 July 2016, http://indianexpress.com/article/explained/indian-economy-economic-reforms-indian-businessmen-1991-economic-reforms-2926505/.
5. Source: IMF, ‘Real GDP Growth Growing at CAGR: 3.3% during 1989–91’.
6. Source: IMF.
7. Source: WTO.
8. Source: UNDP.
9. Source: IMF.
10. RIL Annual Report, Capex for FY2016–17: INR 114742.
11. MOSPI National Accounts: Manufacturing as per cent of GDP ranged between 17–21 per cent between 2000 and 2010.
12. Source: UNDP.
13. Source: RBI BoP data.
14. Source: IMF.
15. Source: World Bank WDI data.
16. ‘The Tiger Roars—Capturing India’s Explosive Growth in Consumer Spending’, BCG, https://www.bcg.com/documents/file97584.pdf.
17. ‘Pulse of Indian Retail Market: A Survey of CFOs in the Indian Retail Sector’, EY–RAI, March 2014, http://www.rai.net.in/EY-RAI_Pulse_of_Indian_retail_market_Final.pdf.
18. ITU Statistics, http://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.
19. ‘The State of Broadband 2016: Broadband Catalyzing Sustainable Development’, Broadband Commission for Sustainable Development, September 2016, http://www.broadbandcommission.org/Documents/reports/bb-annualreport2016.pdf), 93.
20. Karim Sabbagh, Bahjat El Darwiche et al., ‘Maximizing the Impact of Digitization’, https://www.strategyand.pwc.com/media/file/Maximizing-the-impact-of-digitization.pdf.
21. World Development Report 2016: Digital Dividends (Washington, D.C.: World Bank, 2016), DOI:10.1596/978-1-4648-0671-1. License: Creative Commons Attribution CC BY 3.0 IGO, DOI:10.1596/978-1-4648-0671-1, http://documents.worldbank.org/curated/en/896971468194972881/pdf/102725-PUB-Replacement-PUBLIC.pdf.
22. ‘PWC: Strategy & Maximizing the Impact of Digitization’, https://www.strategyand.pwc.com/media/file/Strategyand_Maximizing-the-Impact-of-Digitization.pdf.
Chapter 30: Liberalization and a Tale of Two Companies: Open the Cage and Let the Birds Fly
1. Ratan Tata, Foreword to The Creation of Wealth, R.M. Lala (New Delhi: Penguin Books, 2003).
Chapter 31: 25 Years of Reforms That Led India’s Pharmaceutical and Biotech Industry towards Global Leadership
1. William Greene, ‘The Emergence of India’s Pharmaceutical Industry and Implications for the U.S. Generic Drug Market’, United States International Trade Commission, May 2007, https://www.usitc.gov/publications/332/EC200705A.pdf.
2. ‘India Emerges as Leader in Global Vaccine Market: Govt’, Business Standard, 20 November 2013, http://www.business-standard.com/article/economy-policy/india-emerges-as-leader-in-global-vaccine-market-govt-113112000579_1.html.
3. ‘Fact Sheet on Foreign Direct Investment’, Department of Industrial Policy and Promotion, 2015.
4. ‘Indian Private Equity: Route to Resurgence’, McKinsey & Company, 2015.
5. Stephen David, ‘1981-Infosys Is Formed: Knowledge Warriors’, India Today, 17 December 2009, http://indiatoday.intoday.in/story/1981-Infosys+is+formed:+Knowledge+warriors/1/75430.html.
6. Robert Shapiro and Aparna Mathur, ‘How India Can Attract More Foreign Direct Investment, Create Jobs and Increase GDP: The Benefits of Respecting the Intellectual Property Rights of Foreign Pharmaceutical Producers’, Georgetown University McDonough School of Business Research Paper Series, 2014, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2540591.
7. Interview by Manisha Choudhari, ‘Export Oriented Units (EOUs): A Story of Rise and Fall’, in Dollar Business, May 2016, https://www.thedollarbusiness.com/magazine/export-oriented-units-eous-a-story-of-rise-and-fall/45773.
8. ‘Factsheet on SEZs’, Ministry of Commerce, Government of India.
Contributors
ASHOK GULATI was chairman of the Commission for Agricultural Costs and Prices (2011–14), the advisory body of the Government of India for minimum support prices for major agri commodities. Earlier, he was the director of the International Food Policy Research Institute for more than a decade; a NABARD chair professor at the Institute of Economic Growth, and chief economist, Agricu
lture and Rural Development, at the National Council of Applied Economic Research, India. Gulati has been deeply involved in agri-policy research and advice throughout his professional career. He was a member of the prime-ministerial Economic Advisory Council; and is currently on the Central Board of RBI and NABARD. He has authored fourteen books and several research and media articles related to agriculture, internationally and in India. For his services to the field of agriculture, he was awarded the Padma Shri by the President of India in 2015. Gulati is currently the Infosys chair professor for agriculture at the Indian Council for Research on International Economic Relations.
BABA KALYANI is an Indian businessman who serves as the chairman and managing director of Bharat Forge, the flagship company of the Kalyani Group and one of the world’s leading forging manufacturers. It is a global company with a number of manufacturing facilities spread across India, USA, Germany, France and Sweden. Bharat Forge has been the country’s largest exporter of automotive components for many years, with exports contributing about 50 per cent to total sales. Every second heavy truck manufactured in the US runs on a ‘Made by Bharat Forge, India’ front-axle beam. He is the founder chairman of Pratham Pune Education Foundation, an NGO that is engaged in providing primary education to children belonging to the underprivileged sections of the local community. In recognition of his contributions to Indian trade and industry, the Government of India awarded Kalyani the third-highest civilian honour of the Padma Bhushan in 2008.
C. RANGARAJAN, in his capacity as deputy governor of the Reserve Bank of India through the 1980s, and as governor during 1992–97, laid the foundations of financial-sector, external-sector and monetary-policy reforms in India. The active and harmonious partnership between him and Finance Minister Manmohan Singh in the 1990s rescued India from its 1991 balance-of-payments and fiscal crisis. He has since been governor of Andhra Pradesh, an influential chairman of the Economic Advisory Council to the prime minister in the 2000s, a member of the Rajya Sabha, and chairman of various national research institutions. In recognition of his service to the country, the Government of India awarded him the Padma Vibhushan, India’s second-highest civilian award. His recent books include Counting the Poor in India: Where Do We Stand (2016, co-author), Federalism and Fiscal Transfers in India (2011, co-author) and Monetary Policy, Financial Stability and Other Essays (2009). RANGARAJAN is currently chairman of the Madras School of Economics.
DEEPAK PAREKH spearheads India’s HDFC Ltd and has transformed it into one of India’s leading financial services conglomerates with presence in banking, asset management, life and general insurance, real estate and education loans. Parekh is known for his focus on sound values such as integrity, transparency and professionalism. He is also the non-executive chairman in India of BAE Systems Pvt Ltd, Glaxo Smithkline Pharmaceuticals, and Siemens; and a member of the boards of Bangalore International Airport, Fairfax Financial Holdings Corporation, Indian Hotels, M & M, Network18 Media & Investments, and the international boards of DP World-UAE and Vedanta Resources plc. He is also a member of the advisory boards of several Indian corporates and MNCs. He has often served the Government of India as its master troubleshooter and as an active member of various high-powered government-appointed advisory committees and task forces which include infrastructure, housing, financial services and capital markets. His association with international organizations include the Indo-US CEO Forum, City of London, and the Indo-German Chamber of Commerce. Parekh was awarded the Padma Bhushan in 2006.
DEVESH KAPUR is the Madan Lal Sobti Professor for the Study of Contemporary India, and director, Center for Advanced Study of India, University of Pennsylvania. He has written widely on international migration: Give Us Your Best and Brightest: The Global Hunt for Talent and Its Impact on the Developing World (2005) and Diaspora, Democracy and Development: The Impact of International Migration from India on India (2010). On governance, he has co-edited Public Institutions in India: Performance and Design (2007) and Rethinking Public Institutions in India (2017). On higher education, he has co-edited Navigating the Labyrinth: Perspectives on India’s Higher Education (2017). Earlier, he was the co-author of The World Bank: Its First Half Century (the official history of the World Bank). Before joining the University of Pennsylvania, Kapur held appointments at the Brookings Institution, Harvard University and the University of Texas, Austin.
DIVA DHAR is a programme officer (measurement, learning and evaluation) with the Bill & Melinda Gates Foundation in India where her portfolio includes research and evaluations in gender, ICT, nutrition, child health and youth. She was formerly associate director at J-PAL South Asia for evaluation capacity-building and the program director of the Centre for Learning on Evaluation and Results (CLEAR) in South Asia, where she worked on strengthening M & E-capacity in the region and promoting evidence-based decision-making. Previously, she worked for J-PAL and Innovations for Poverty Action on several impact evaluations in India, Bangladesh and Morocco dealing with governance, education, gender and urban services.
GITA PIRAMAL is an entrepreneur and businesswoman, author and journalist. For two decades, she contributed to several Piramal family companies in various positions. In 2012, she gave up these board responsibilities and management roles. She is a leading chronicler of Indian business families and their firms; and has written for many years on the corporate sector for leading Indian and international publications, including the Financial Times and the Economic Times, and as a consulting editor of the World Executive’s Digest. She has been involved in the making of award-winning television programmes on Indian business for the BBC, CNBC and Plus Channel. Her major books include Business Maharajas (1997), Business Legends (2000), Managing Radical Change (2002, co-authored) and World Class in India (2001). Her most recent work is Kamalnayan Bajaj: Architect of the Bajaj Group (2015). Piramal founded and has been editor-in-chief of the Smart Manager, India’s first world-class management magazine launched in 2002. She is a member of the board of directors of several companies, and is currently engaged in academic research, and as a Senior Associate Fellow at the Oxford University.
HARSHA VARDHANA SINGH was deputy director-general at the World Trade Organization for eight years till 30 September 2013. Earlier, he had been on the staff of GATT/WTO for twelve years until 1997. He has worked for over three decades on international trade policy, development, infrastructure regulation and global governance. In the WTO, his direct areas of responsibility included trade in agriculture, services, trade and environment, technical barriers to trade, sanitary and phytosanitary measures, and electronic commerce. He has also served as economic adviser and then as secretary of the Telecom Regulatory Authority of India (TRAI). He has taught at Columbia University, the Fletcher School at Tufts University, and Nan Kai University in Taiwan, and has been at think tanks in Geneva for three years. Singh is currently executive director, Brookings India, and Senior Fellow of the Council on Emerging Market Enterprises, Fletcher School of Law and Diplomacy, Tufts University.
JAIMINI BHAGWATI, a former member of the Indian Foreign Service, was India’s high commissioner to the United Kingdom and India’s ambassador to the European Union, Belgium and Luxembourg. Earlier, Jaimini was joint secretary for capital markets, pension reforms and external commercial borrowings in the Ministry of Finance. His tenure in the ministry was during a crucial period of capital-market development in India. He was responsible for improving integrity and implementing best practices in the Indian bond, equity and derivatives’ markets and in the pensions sector. He has also worked for eleven years in Washington, D.C. in the World Bank’s treasury. His responsibilities at the World Bank included bond-funding, derivatives transactions and asset-liability management. Currently, he is the RBI chair professor at the Indian Council for Research on International Economic Relations, New Delhi. He is also the non-executive chairman of the Infrastructure Development Finance Corporation (IDFC) Alternatives and board member of IDFC’s holding company.
JESSICA SED
DON founded Okapi, an India-based strategy group focused on institutional design for social innovation. She has also been a Visiting Fellow at IDFC Institute (Mumbai) and Adjunct Faculty at IIT Madras. She has served as head of research at the Indian Institute for Human Settlements (Bengaluru) and director of the Centre for Development Finance at the Institute for Financial and Management Research (Chennai). Jessica has contributed to various expert committees on infrastructure in India, including the Isher Ahluwalia High Powered Expert Committee on Urban Infrastructure, the Rakesh Mohan National Transport Development Policy Committee, and the Vijay Kelkar Committee on Revitalizing Public–Private Partnerships. She has also worked internationally on the intersection of infrastructure governance and environmental impact, serving as a Fellow on the Council on Foreign Relations International Affairs with the United States Environmental Protection Agency as well as the co-chair of an interdisciplinary working group on short-lived climate pollutants at the Institute for Advanced Studies in Sustainability, Potsdam, Germany. She is on the advisory board of the Wilderhill Global Clean Energy Index (NEX). Seddon is now the director of urban development at the World Resources Institute Ross Center for Sustainable Cities in Washington, D.C.
KIRAN MAZUMDAR-SHAW is a pioneer of the biotechnology industry in India and the founder chairperson and managing director of the country’s leading biotechnology enterprise, Biocon Limited. Named among Time magazine’s 100 most influential people in the world, and a member of the Financial Times’s top fifty women in business, Mazumdar-Shaw is recognized as a global influencer and thought leader who has made her country proud by building a globally recognized biopharmaceutical enterprise that is committed to innovation and affordability in delivering best-in-class therapeutics for chronic conditions to patients worldwide. She was awarded the Othmer Gold Medal 2014 in the US, for outstanding contributions to the progress of science and medicine. She has received several prestigious awards and honours, both in India and abroad; and also honorary doctorates from a number of international universities. In recognition of her outstanding contributions to the world of Industrial biotechnology in India the Government of India awarded her two national civilian awards, the Padma Shri in 1989 and the Padma Bhushan in 2005.
