India goes to Davos this year with a renewed sense of purpose. The World Economic Forum’s Annual Meeting 2014 with the theme of ‘The Reshaping of the World: Consequences for Society, Politics, and Business’ converges with the changes taking place in the world today. More important, these are the very areas that are transforming India. Therefore, what is happening here is of great interest to the Davos Forum and vice versa.
Recognizing that India’s evolution will impact the reshaping of the world, the annual meeting of global leaders has a broad agenda for discussions on the country. Seven Indian ministers and over 120 leaders from business, media and academia are slated to emphasize the strong measures taken by the government in recent months to revive economic growth. The focus will be on investor-friendly initiatives, easing the business environment, and opening up sectors to foreign direct investments.
While global economic analysts have been bearish on India recently, its growth story has to be viewed over a longer horizon than the past two years, a period that was beset by global economic turmoil and multiple vulnerabilities that kept global GDP growth rates and world trade subdued. Over the last decade, India’s growth pace has averaged about 8 per cent annually, despite the worst economic shock in eighty years and slow pace of 5 per cent in this and the previous fiscal year. The World Bank now expects growth rate to progressively increase to cross 7 per cent within the next two years.
Notably, this high growth rate is accompanied by structural shifts – the poverty rate fell faster than ever before, boosting almost 140 million people into the consuming class; the investment ratio peaked at 38 per cent; rural consumption expenditure doubled; gross enrolment ratio for higher education stands close to 20 per cent; telecom subscribers come in at nearly 900 million and penetration rate has crossed 73 per cent; more power generating capacity has been added than in the preceding half century; and many other such success stories. Together, these numbers indicate that our expectations for the country some years ago were in fact understated, and that, looking ahead, the confluence of these new circumstances could account for changes much beyond our imagination.
The WEF annual meeting has come out with a variety of pertinent issues relating to global, institutional, individual and regional agendas. A key area of emphasis is the way that technological interconnectivity is changing lives. Going forward, how we manage these changes arising from hyperconnectivity will be vital to global growth and development.
This relates to India as well. In recent months, the country has seen remarkable changes across politics, society and business from an internet-connected, urban, middle-class population of about 240-250 million which is driving new trends. The rise of a new political party, social movements and rallies, and start-ups in business all owe to this remarkable phenomenon, and will impact the world as more Indians are connected.
Another important pillar at Davos is ‘Achieving Inclusive Growth’. We in India have directed policy imperatives towards achieving inclusive growth for the last ten years, and this has helped to unlock a huge consuming population particularly in the rural areas. This rural consumption helped to make the Indian economy resilient in the face of severe headwinds from global economic developments in the last five years.
A further area that industry is looking at in particular is the many sessions with Indian participation. Although growth has been flagging in the last two years, we in industry feel that the world must not lose sight of the progress in the policy reform agenda that India has made in this period. Opening up to FDI in more sectors, financial sector reforms, legislation in corporate governance and land acquisition, initiatives to tackle corruption, fast-tracking large projects, better resource allocation, taxation initiatives – these are some of the steps that greatly enhance the economic environment for industry.
From the perspective of CII and Indian industry, we would keenly look at the issue of disruptive innovation. We believe that India is a ‘living laboratory’ for the world where multiple experiments in innovation can be carried out and tracked. CII has been actively promoting the concepts of disruptive innovation and we believe that we can contribute to this dialogue and gain insights into what the world envisages from such innovation.
The dialogue on ‘Meeting Society’s New Expectations’ would synch with India’s interests where society is discovering a new level of empowerment. The cultural context of conservative thinking is certainly changing – today, it is the Indian youth who is leading new trends through her innovative ideas, fresh demands, and contemporary lifestyle with amazing repercussions for Indian and global businesses.
Finally, we are interested in what global leaders think about the reshaping of the world, whether global growth is on its way back, what are the prospects for emerging economies and what is the role that large economies like India can play. At a time when the world is undergoing tremendous transformation, the impact of India’s own domestic social, political and business transformation on the world would be considerable. The Davos Forum would be a valuable platform to analyse these shifts and devise effective responses.
I look forward to very meaningful discussions at Davos this year.
Kris Gopalakrishnan is President, CII and Co-Chair of the World Economic Forum’s Annual Meeting 2014 in Davos-Klosters, Switzerland.
Image: Kris Gopalakrishnan at Davos.