Prime Minister of India - Dr. Manmohan Singh

PM Receives Kamal Nath's Book

"There is an old English saying 'those who can do, those who can't teach'. Kamal Nath has been an active participant in political processes. He has been a very successful businessman. Now this third role I did not imagine that he would perform and perform so admirably. I congratulate him for the vision, for the dedication and commitment that he has shown to our country's future. He has been enormous support to me as Sharad Pawar has been. They are the modern faces of our government and I feel very proud of both of them.

When I was a student at Cambridge some 50 years ago I had a great teacher Lord Nicholas Kaldor and in a lecture that he delivered after having visited China, the capitalist evolution in the light of Tenzian economics, the conclusion of that lecture was that there is no technical necessity for any system to do better than the other. There is no technical necessity for socialism to do better than capitalism or vice-versa. It all depended on the mindset of the people who made the key decisions of nations, the mindset of its politicians, the mindset of its businessmen, the mindset of the media baron, the mindset of the trade unions. I think we have crossed many hurdles. But we have still many hurdles to cross. India is a country of enormous possibilities. We have only scratched the surface. But I draw comfort for the fact that if you look at our top ten/fifteen business houses/firms I think many of them didn't exist in 1991. Narayana Murthy is the product of the reform era that began in 1991. That task is still not complete. India has to be a big industrializing nation. India has to be a big trading nation. People do not recognize that on a per capita basis India is not well endowed with many natural resources. If we have to overcome this scarcity of natural resource base, we have to be a major trading nation of the world. If we have to be a major trading nation of the world, we have to be a major manufacturing nation of the world.

I was just now five minutes ago talking to a group of distinguished businessman from various parts of Asia. The industrial revolution in England transformed England. It took away surplus population from agriculture to manufacturing. The same process has been underway in East Asia, in South-East Asia and in China. In our country the manufacturing has moved forward but it has not performed that historic task of taking lot of surplus population from agriculture into industry. I think governmental regulations, a mindset where government knew better than anybody else what is good for the country and excessively capital intensive design of development process plus also I think the rigidities of the labour legislation have created a situation that we have industry but it does not grow at a fast enough pace to create lot more jobs for our young population. Therefore, problems of labour rigidity, labour flexibility, these are still I think hurdles in India realizing it chosen destiny.

I cannot believe that India's economic and social problems can be solved only in the framework of our remaining a rural economy. Rural development is essential. It is essential to make our growth process inclusive. But if we have to aspire to be a major nation of the world, a power house of the world economy India has no option but to be a strong manufacturing nation and a type of manufacturing which creates a lot more jobs in the process of production. I think that is the task that we have. We have the contradictions that Kamal mentioned. We have done well in recent years. I often said that growth is not an end in itself. It is only a means to enable our people to lead a life of dignity and self-respect and unless people at the lowest rung of our social and economic ladder can become active partners in the processes of growth and development, I think we cannot rest content. And that means alongwith working for labour flexibility we must ensure that our children are well educated that our children reach their adulthood healthy, that they are not crippled by the burden of disease, by the burden of malnutrition and that's why the great importance of spending money on health, on education and on vocationalisation of education. This we will do, but governance is an issue which worries me. We talk about governance, but Mr. Rama Rao, the former Chief Minister of Andhra Pradesh, once said that the Centre is a conceptual myth, India lives in States and that is a reality. Unless the States' political system, the states' economic management improves, I don't think we can realise our growth ambition. So the central government saying right things is important, may be some educational value, but unless the political processes and the management structures the way our states are govern both public and private sector I think we will not be able to realise our chosen destiny. That is the task I believe. That brings me back to what I said about the mindset of our politicians, the mindset of our businessmen, the mindset of our trade unions. I think we have to work to change that mindset.

When I was the governor of the Reserve Bank some 25 years ago, I started the process of computerising the bank accounts. There was a strike in the Reserve Bank. Somehow we resolved that. Last time I went to the Reserve Bank, I think some two years ago, several of the trade union leaders came to me and they wanted to touch my feet and they said well what you did teach us that the value of computerisation, Rajiv Gandhi was the hero, but we all were in small ways active in that process and he said my daughter is now a computer engineer, my son is a computer engineer and they said with great pride that how this had transformed their lives. So, we are a democracy and I sincerely pray and hope and trust that India will remain a functional democracy. The democracy has certain disadvantages.

I recall, once a friend of mine who was the director of Asia department of the International Monetary Fund, he went to Korea and in those days Korea was run by authoritarian system President Palk was the President. They were discussing issue of devaluing of currency to get a standby. And when he talked to the finance minister, the finance minister said that it was a very difficult question - you don't expect me to give an answer right away. To which my friend said how much time do you require Mr. Minister. He said I require half an hour. I have to book a call for President Palk. Now consider this in our system time is not valued whether when dealing with government files, dealing with various applications for doing business, doing this thing that thing. Our system does not value time and that is one weakness of the India system which worries me a great deal. We have to work together to create therefore a new mindset.

Some ten days ago I was in Singapore, I had the privilege of meeting premier Wen Jiabau of China for whom I have great admiration both for him and President Hu Jintao. I have met both of them now five six times and the type of leadership China has produced right from the days of Deng Xiaoping is the greatest asset that China has. When I reached there, there was an address by premier Wen Jiabau gave to the University of Singapore in defence of opening up. And the moral of that beautiful lecture he said that if you really want to get rid of poverty, if you really want to become a nation which counts, you have no option but to open up. And China's example he said history guides, going back centuries he said whenever China shut its door to the outside world, it perished, it went down. Wherever it had the vision to look outward it prospered. The purpose in quoting all that is to say that all of us have an obligation to think afresh. The decisions that we make and that applied to politicians, that applies to businessmen and all other important agents associated with the change. The decisions that we take or the decisions that we don't take will have profound implications for the future of our country.

At the fag end of my life I feel that the best we can do is to help transform the mindset. And this is where people like Kamal Nath, Sharad Pawar, Chidambaram, Montek have been great help to me. Any nation will be proud of such dedicated public servants. So for me it is a great pleasure, a great honour to felicitate Kamal Nath for having produced a very readable and very instructive book."