Strengthening the Entrepreneurial Ecosystem in the ‘Ideas Economy’

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The global economy is today faced with the spectre of rising unemployment. According to the International Labor Organization, the world economy will need to generate nearly 280 million new jobs between 2015 and the end of 2019 to make up for the ground lost during the last recession and ensure new entrants to the labor market can find work.

Parliament Logjam: India Speaks Out

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The nation has been witnessing an unprecedented long lasting parliament logjam that has seen a complete washout of the monsoon session.

I wrote a post for LinkedIn on this situation and if indeed this is the Kind of India we can be proud of?

As expected there has been an overwhelming response from a diverse group of people who have echoed my views and strongly spoken out against the chaos in Parliament. Sharing herewith some of these reactions.

Australia & India: Combining Technology and Entrepreneurship to Innovate the Future

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I am indeed honoured to deliver the 17th Dr KR Narayanan Oration instituted in memory of the late President of India, a great statesman and a close friend of Australia.  

At a time when technology is transforming the world we live in, I would like to take this opportunity of sharing my thoughts on how our two countries can collaborate to leverage technology and innovate a better future.  

The full text of the speech can be viewed on SlideShare:

Australia-India: Combining Technology and Entrepreneurship to Innovate from Kiran Shaw

Where the Mind is Without Fear

Indo-Japanese Partnership Model can Ensure Highest Quality at Lowest Cost

Reaping The Winds of Change

Reviving the Indian Growth Story

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The decisive mandate in favour of Narendra Modi led BJP Govt reflects people’s overwhelming vote for change. Change in the way the country is administered; change in the way India does business; change in the way food is distributed; change in the way healthcare is delivered; and change in the way the government addresses the aspirations of a billion Indians. 

If the new government is serious about delivering on its promise of a better life for every single Indian, its No. 1 priority should be to navigate the country towards a path of sustainable and inclusive economic growth.

The new government will be starting off with economic “tailwinds”: inflation is showing signs of cooling; CAD has eased significantly; the rupee has stabilized; and GDP growth is expected to pick up pace in FY15 after two consecutive years of sub-5% growth.

However, there is no scope for complacency as significant challenges face the country.  Projects worth over $100 billion were shelved or abandoned in FY14, the highest in the past 18 years, due to policy uncertainty and pending regulatory clearances, according to CMIE. Capital goods production has contracted in nine of the past 12 months, according to latest government data.

The new government that comes to power will have to move quickly to de-bottleneck projects and revive investment sentiment in the country. India desperately needs to be seen taking corrective actions to regain its lost glory by creating an enabling ecosystem that paves the way for a double digit growth.

The prospect of a positive change by the new Government has already started reflecting in market sentiments. The Sensex has hit record highs as overseas investors are aggressively buying into Indian equities in the hope that a BJP-led coalition will take the steps necessary to boost consumer and investment demand that in turn will give a leg-up to economic growth. The Indian rupee is near a 10-month high. Concrete actions by the new government will help capitalize on this mood.

> Need for decisive action

In order to restore investor confidence the new government needs to introduce enabling policies as well as build the necessary infrastructure that supports the development agenda for the country across sectors.

Some critical steps the government needs to take to revive in the Indian economy are as follows:

> Smarter regulation for ease of doing business

 

The need of the hour is not more regulation but smarter regulation. The government needs to focus on a number of regulatory reforms that will address the ease of doing business, reduce transaction costs and expedite approval timelines.Currently, businesses need to secure a plethora of approvals and licenses from multiple agencies. We need to move away from over-regulation to a system of self-regulation. To make the system transparent and stakeholders accountable, we have to ensure that E-Governance becomes the backbone of regulation.  Moreover, the regulatory process should be re-engineered to replace the current system with ‘deemed approvals’ and ‘automatic approvals.’  A time-bound approvals system can help fast-track projects, businesses and start-ups, thus improving the business climate in the country. 

These measures alone can add a percent or two to GDP growth through increased FDI and project implementation.

> An efficient taxation system

The long-pending GST needs to implemented as an uniform tax on all goods and services across India is a key indirect tax reform that needs to see the light of day. There is also a need to exempt SEZs from MAT. 

> Remove bottlenecks to boost flow of foreign capital

A lack of clarity over laws regulating FDI in key sectors like multi-brand retail is preventing much-needed foreign money from coming in to bolster India’s infrastructure setup.  MNCs can help bring in technological knowhow and share best manufacturing practices with local companies, thus helping them upgrade their systems and processes.

> Build the necessary Infrastructure that supports industrial growth

All infrastructure projects which have been held up for long need to be cleared. The SEZ policy needs better implementation if it has to boost manufacturing and exports.

The government also needs to allow a longer tax free status for SEZs for the real benefits to kick in.  Broad banding in a pragmatic way should be allowed to unlock the full potential of this far reaching scheme.

Establishing industrial corridors through high-end road and rail connectivity that links metros to interior towns can spread economic growth and create job opportunities more uniformly across the country.

> Generate high-skilled jobs

There is an urgent need to create high-skilled jobs that add long-term value. Employment generation initiatives should focus on creating a large market for skilled jobs through building scale in high-end manufacturing. For this, the government needs to provide adequate incentives to the manufacturing sector. Incentives should also be given to encourage start-ups as they can contribute to the goal of employment generation. 

> Introduce a universal healthcare program

The ‘Right to Health’ should be addressed through a universal healthcare program which hinges on affordability and access. An IT enabled healthcare delivery model like that of Tamil Nadu has the potential to revolutionize various aspects of the industry. The implementation of an e-healthcare system at a national level can ensure fair and transparent delivery of affordably priced, good quality medicines to patients across the financially challenged socio-economic strata of India.

> Focus on Science & Technology, Incentivize Innovation

Science & Technology is of strategic importance to India’s future leadership. Innovation is key to value accretive growth and India needs to step up its investment in research and translational innovation.  We must identify key areas in which to build world class scientific and technological excellence, e.g., genomics, nanoscience, analytics, synthetic biology, information technology, space technology etc.  Incentivizing innovation and IP creation is important for India’s future growth prospects. Enabling entrepreneurs to propel ideas into sustainable businesses will add value to our economy in the long run.

In the final analysis, the new government needs to exhibit strong political will to implement bold economic reforms, create world-class infrastructure, usher in overdue tax, labour, land and regulatory reforms, address power woes and roll back unfriendly business regulations to return the India economy to a path of high growth in 2014.

Congratulations to Narendra Modi: Let's Work Towards Prosperity

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The landslide mandate handed to the Narendra Modi and BJP reflects India’s overwhelming desire for strong leadershIp that will drive change. Change in the way the country is administered; change in the way policies are framed; change in the way India does business; change in the way it engages with the world; and change in the way the government addresses the aspirations of a billion Indians.  These are tall expectations and the new government will need to take immediate steps to revive the economy to signal change. This will call for swift action to implement bold economic reforms that create jobs through massive infrastructure projects, roll back unfriendly business regulations and instead focus on speed and ease of doing business that attract large domestic and foreign investments. Above all, there is a compelling need to provide transparency and accountability through e-governance.

The new government has been provided a historic opportunity to bring positive and far-reaching change, it must do so with responsible objectivity that lifts the spirit of a billion Indians.

Agenda for The New Government

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The decisive mandate handed to the Narendra Modi-led BJP reflects India’s overwhelming desire for strong leadershIp that will drive change. Expectations are high from the new government, which will have to deliver on its promise of a better life for every single Indian. And the only way it can do so is by reviving the economy and putting Indian on a path of sustainable and equitable growth.

The Indian economy has stalled because of a sharp decline in investments. Policy uncertainty and pending regulatory clearances have put over $100 billion worth of projects in jeopardy. Capital goods production has contracted in nine of the past 12 months. Therefore, swift action is needed from the new government to de-bottleneck projects and revive investment sentiment in the country.

To begin with, the government will have to focus on regulatory reforms that will improve the ease of doing business, reduce transaction costs and expedite approval timelines.  There is thus an urgent need for a system of ‘deemed approvals’ and ‘automatic approvals.’ To attract FDI, the government will have to ensure fast-track project clearance and articulate unambiguous tax and compliance regulations.

Information technology needs to be leveraged optimally to make administrative governance in India transparent and stakeholders accountable. E-Governance should become the backbone of regulation. 

Science & Technology is of strategic importance to India’s future leadership and the new government will need to step up its investment in research and translational innovation. 

The government will also need to tackle India’s energy and water crises on a "war footing."

Increased investments in healthcare and education and greater involvement of the private sector can ensure effective and transparent delivery of the ‘Right to Health’ and ’Right to Education.’

The fundamentals of the Indian economy are strong.  However, our economic engines of growth have been throttled by wrong policies and regulations in the past.

The new government needs to exhibit strong political will to implement bold economic reforms, create world-class infrastructure, usher in overdue tax, labour, land and regulatory reforms, address the power deficit and roll back unfriendly business regulations.

The new government has been provided a historic opportunity to bring positive and far-reaching change, it cannot afford to belie the hopes of a billion Indians.

The Language Conundrum

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The Supreme Court’s decision to stop the Karnataka government from imposing Kannada as the medium of instruction in all primary schools of the state should be viewed pragmatically and not emotionally.

We now live in a global village where English is the most essential language for global business success. Estimates show that 2 billion people worldwide will be learning English by 2020. As India’s integration with the global economy picks up pace, new job opportunities will be created wherein strong English language skills will be a key requirement. Denying our children the opportunity of picking up English language skills now would have put them at a competitive disadvantage later when they would have entered the job market.

Preventing children from accessing English language education in their formative years is not only irresponsible but irrational.

The misconception here seems to be that an overemphasis on English in schools would erode Kannada language skills in young people and hamper their ability to communicate in their mother tongue.

However, that line of thinking is completely fallacious. Scientific studies have shown that between birth and the age of ten or eleven, the human brain makes new connections all the time and that gives children the ability to quickly pick up many new skills, including multiple languages. This means that schools can simultaneously use both Kannada and English as their medium of instruction.

Therefore, insisting on using Kannada to the exclusion of all other languages in primary schools is imprudent.

Just look at what our neighbouring states are doing. To improve the teaching of English language in the state, the Maharashtra government has tied up with the British Council of India for the Maharashtra English Language Initiative for Primary Schools, under which thousands of primary school teachers have received training. Does this mean the people of Maharashtra are less devoted to their mother tongue? I don’t think so.

Cultural chauvinism is misplaced in today’s world. That is not to say that we should ignore our language and culture. Preserving our language and culture is important, but so is ensuring our economic competitiveness.

Karnataka is known for its visionary policies that have established Bangalore as the IT and BT capital of India. In that context, making Kannada the sole medium of instruction at the primary level would have been a very regressive step with the potential of undermining Karnataka’s standing as an economically progressive state.