Former Prime Minister of India - Shri Atal Bihari Vajpayee

Address by Prime Minister, Shri Atal Bihari Vajpayee, At India Economic Summit

Ladies and Gentlemen:

Thank you, Shri Bharat Ram, for your warm words of introduction.

The India Economic Summit, organised by the World Economic Forum and the Confederation of Indian Industry, has contributed to improved understanding of our national development process and economic policies. It has also enabled foreign investors to appreciate the potential of business opportunities in India.

The eleven economic summits held so far have served a useful purpose in improving Government - business communications and creating networks of relationships. More than anything else, such relationships lead to mutual understanding and promotion of trade and investment.

I am speaking to you today for the third consecutive year. During this short period, you would have perceived my Government’s determination to pursue policies that will make India globally competitive. And, progressively integrate India with the global community.

My Cabinet colleagues will be speaking to you during this summit. They will outline our sectoral policies and programmes.

I will confine myself to making some observations on the direction in which we are moving. It would also be in order to make some comments about global integration in the light of recent experiences.

Friends,

The inevitability of globalisation is recognised by all.

However, during the last one year misgivings about the globalisation process have become more and more pronounced. This is evident from the increasingly vigorous protests in Seattle, Prague, Bangkok, Melbourne and even Davos!

Are these protestors a group of misplaced individuals? And what are they protesting against?

Some of the placard-wavers have cynically commented that they are against everything. But, a serious analysis of the protests will show that we cannot ignore the fact that there are many misgivings cutting across nations; that there are apprehensions which are shared across borders.

If it is so self-evident that globalisation leads to increased opportunities, enhanced growth and real income, why are these not being universally accepted? Is it a communication failure? Is it merely an image problem?

Is it that Governments are unable to ensure that the fruits of development percolate to the grassroots? Or, is it that globalisation is increasingly being perceived to be elite-driven, conferring benefits on large corporates while bypassing millions of poor and marginalised people? In India alone the number of such people is nearly 300 million.

We need to ponder over these questions and come up with acceptable, convincing responses.

The effectiveness of these responses would partially lie in accepting that while globalisation affords unbounded opportunities, these opportunities go hand in hand with obligations. The privilege of being a global player must be matched with the responsibility of making the process universally acceptable by making it universally beneficial.

We in India are conscious that the rapid changes brought about by technology and globalisation have to be addressed with care and caution. We have to spread the benefits among all our people and manage the process of change with sensitivity. Government sees this as its responsibility.

How does business perceive its role and responsibility? What should be the concerns and obligations of industry?

Over the last three years, there has been enhanced partnership between Government and industry not only in the economic sector, but also in the social sector. A lot more can be achieved by strengthening this partnership.

Today, at this Economic Summit that has brought together captains of international and Indian business, I would like to share some thoughts on what could be the obligations of industry.

First, and foremost, is that business and industry, especially the foreign investors community, must have a long-term commitment to India. This is the only way we can build trust and a sustained relationship.

Second, as Government works to evolve a forward-looking Companies Act and Competition Laws, I seek from you a strong adherence to free and fair competition in the interest of consumers. Let us not follow the path of monopolies and cartels that serve the cause of few at the cost of many.

Third, today’s India wants to see the corporate sector implementing higher standards of corporate governance. Each Indian and foreign company has a duty to be transparent, just as Governments - at the Centre and in the States -- are trying to ensure transparency in policy-making. This is an issue that concerns small investors, minority shareholders and the investing public. High standards of corporate governance will enhance the people’s confidence in the private sector.

Fourth, I would urge you to invest more and more in human resource development. It would be beneficial in the long run to devote funds and time to training, re-training and education of your employees and their families. This will prepare them to meet the challenge of change which globalisation inevitably brings.

Fifth, remember that technology is driving change. With India’s outstanding scientific, technological and engineering talent, it will benefit everybody if you focus on research and development, innovation and technology building.

Sixth, consider India a profitable location not merely for out-sourcing of information technology services, but also for manufacturing. We have a strong manufacturing tradition; this will continue to exist. India seeks to be not only an IT hub, but also a manufacturing hub.

Seventh, be sensitive to environmental concerns. Insist on high standards of pollution control and ecological management.

Eighth, reach out to the rural sector not merely because it is large, but because the needs of rural India cannot be bypassed. The rural sector needs high quality products to derive the advantages of globalisation.

Finally, no Government can alone meet the massive challenge of providing education and healthcare facilities to every family in a billion-strong country without all round cooperation.

Can each of CII’s four thousand member companies and the three hundred foreign companies represented here take charge of at least one primary school and one healthcare centre to supplement Government’s efforts in the social sector? Indeed, Indian industry as a whole must deepen its involvement in the crucial social sector areas of primary health and education.

Such a social partnership can transform India. If you strive to realise these objectives, it will make a qualitative difference to our society.

If we enter into this partnership now, the image of globalisation will change: Globalisation will no longer be perceived as a threat, but an opportunity.

It will initiate a process that will enable all sections of society to participate in development and growth. A process in which the gains of income will be more equitably shared.

Friends,

That is why our Government is pursuing policies which aim to maximise the benefits of globalisation while minimising its risks and socially disturbing outcomes.

Supported by our strong macro-fundamentals, India will continue, for the eighth year in succession, to grow at over six per cent. This is coupled with modest inflation, comfortable foreign exchange reserves and outward looking policies.

Our intention is to double per capita income within one decade. This means an annual GDP growth of around eight to nine per cent.

Since we last met, our Government’s focus has been on improving the quality of our national infrastructure. Let me mention some of them:

The telecom sector has been totally deregulated.

Entrepreneurial skill is now bringing in considerable private investment -- both domestic and foreign - in this sector. Consumers have benefited from improved services and lower tariffs.

A massive road building exercise is underway. Fresh contracts for over 2,500 km are being awarded by March 2001. New contracts at this level will continue for several years for enabling us to build a 6,000-km road network by 2003 and another 7,000 km by 2007.

Several crippling problems of the power sector have received our close attention. Many State Governments have constituted independent Tariff Regulatory Authorities.

An Electricity Bill, 2000 is in the offing.

Our recent review suggests that as many as 10 power projects can reach financial closure by end-March, 2001.

Our privatisation policy involves important strategic sales in several significant areas that should strengthen our competitive efficiency.

We have accorded priority to social sector development, particularly health, primary education, drinking water and rural road construction. Policies and programmes are being reshaped so that benefits of growth percolate to the masses.

New technological innovations and the new economy industries, such as information technology, pharmaceuticals and biotechnology, are in the forefront of Government’s attention. We will avoid the pitfalls of a digital divide so that the benefits of the information revolution are shared by all.

There is some evidence of a global slowdown. But, even within this framework, I am convinced that India’s environment for business will improve steadily and significantly. This will encompass policy-making, procedures and implementation.

I have been taking personal interest in ensuring speed and transparency. A Strategic Management Group in my office is meeting every week to hasten the pace of implementation. I am receiving support from Chief Ministers many of whom have set up similar monitoring groups for their State Governments.

India will pursue with determination the reform strategy articulated in the manifesto of the National Democratic Alliance. The next generation of reforms entails difficult decisions. In implementing them, we will no doubt encounter resistance and transitional difficulties. But we shall overcome them.

We shall constantly endeavour to evolve national consensus. We believe that the agenda for economic change should not be unduly politicised.

Our goal is clear: We will globalise to India’s advantage. In the process, we will ensure that the fruits of productivity and the gains of growth bring about a qualitative change in the life of our people.

Your partnership in our challenging task will be invaluable. I seek your cooperation in realising our vision.

Thank You.