ET BureauSandeep Gurumurthi, Executive Editor, ET Now, in conversation with Anil Agarwal, Chairman, Vedanta, Rana Kapoor, MD & CEO, YES Bank & Chairman, YES Global Institute, Bob Van Dijk, CEO, Naspers, Dominic Barton, Global Managing Partner, McKinsey & Company and William B Thomas, Chairman, KPMG International at the ET Global Business Summit 2018, talk about taking India to a $10 trillion economy by 2030.
Edited excerpts:
What are the advantages that India has that will help the economy accelerate to a $10 trillion one by 2030?
Anil Agarwal: One is absolutely the huge technology background, the kind of mind we have in the south. People all over the world look at the technology hub and they source technology from India. Number two is infrastructure, not even 10% infrastructure has been made so 90% infrastructure is needed. For every country, infrastructure is the catalyst to start the economy. Number two, India has a tremendous base of natural resources whether it is oil, gold, copper, or iron ore and not even 2% has been explored yet. So, with this two and the economy opening up, I feel that the economy will accelerate much more.
Rana Kapoor: We have to take steps short, medium, long. In the short term, we have taken many significant steps in terms of stratospheric reforms that change. I need not elaborate on that. These reforms have to now become fundamental to the execution of the economy’s future success.
Secondly, we have to recognise that the jobs in India and the skills in India are fundamentally created in the micro, small, medium enterprises and that is the job pyramid which is fundamentally the most important in our nation. With a 1.25-1.5 billion population, the jobs are going to be created in SME sector. The fundamental thing is to create the skills there.
The third aspect is the infrastructural opportunity on the anvil. We are doing a good job of some sectors like roads and all. We can do fantastic on transportation and logistics. We can do even more brilliantly given a head-start on renewable energy. The 175 gigawatts output, which seemed to be a challenge, today is very feasible and can be available at a very lucrative rate, as long as there is proper legal and statutory conformance to the pricing regulations.
I am deeply convinced that the Indian economy is on a threshold of 10% CAGR between now and 2025. From 2025 to 2030, to build the momentum, we will need a CAGR of 12% to get to a $10-trillion economy. I am convinced it can happen.
Bob, you have been investing in India for some years now with stakes in Makemytrip and Flipkart. What is it that you are so bullish about when it comes to India? Is it the market size, is it the demographic dividend?
Bob Van Dijk: Many of the points that Dominic mentioned are the drivers that make us excited. The number of people that will be migrating into the middle class in India is a stunning number but there is one number that gets us even more excited. We started investing in the Indian market in earnest in 2008 when we had a big internet gathering. At that time, India had about 10 million internet users which was the same as Holland with a population of 60 million.
Five years ago in 2013, again we had a big internet gathering here and India had 30 to 40 million internet users, a market the size of France.
Today India has between 300-400 million depending over its metric you want to look at. It is bigger than the US, it is still obviously not as big as China but it is the second largest internet market in the world and it has gotten there in a period of three-four years fundamentally, representing probably the most exciting transformation of internet growth opportunity in history. This was also seen in China which was tremendous for us but also for China. Explosive growth drives innovation,. It leads to leapfrogs and the innovation that will come out of India will actually be new to the rest of the world that is what I am really excited about. It has happened in China, I am sure it will happen in India.
It happened in China so it should happen in India. Dominic, what could be the risk-in? People often talk about the execution risk. That is a concern you have flagged and as a consultant it is only a strategic but if the execution is not good, it is not going to have any impact. So, how big a risk is that when we talk of a $10-trillion journey if we get the execution wrong?
Dominic Barton: First of all, I agree with what has been said with the digitisation as also the speed. But I do not think things are not going to be nice. I am very bullish on that but on execution, what I worry more about is consistency. If a new government comes in at some point down the road, let us not change, you got to have consistency. That is really important for infrastructure because if people want to invest in infrastructure, they want to know whether there is going to be a consistency in the regulatory approach and how pricing is done.
If we are going to think about the rules and how decisions get made, you got to have consistency and I would also argue one thing that we can learn from what is going in the United States right now. We underestimated the impact that deregulation had on economic growth there and it is whether you like it or not and how that works. It has led to growth. One of the things I would be looking at in India is how come we get decisions made done faster? I would have a clock speed. Why does it take so long to make infrastructure decision?
Whatever the decision, there should be measures out there on speed. It is a competitive advantage to get more capital, to get more innovative. You can unleash more people power. So, to me the key is consistency of policy.
Bill, what is going to be the key catalyst of change in the next 5-10 years? Is it going to be a combination of the economy making this whole digital transition and GST? The upside is what we could get on account of these two factors. Is that going to be the key catalyst of change, according to you?
William B Thomas: The catalyst to change is going to come from the consistency that Dom talked about it and at the end of the day, the opportunity is there if the reforms continue to make India more open for business. That will create economic growth in increasing pace. But real catalyst to change is going to come when you recognise that educating the population of incredibly talented people that you have in this country. If we saw that, then the $10 trillion is within reach and that’s the reason why you got to open up. The country is not going to get there by itself. It has to be open to the world in terms of economic flows but the world will come here to access that talent if it is accessible and that is the real catalyst for change.
On GST, when will the upside of GST be visible to the economy? When will it be visible in corporate balance sheets?
Anil Agarwal: I think it is showing. You cannot expect anything to happen overnight. It has to settle down. The government, the public and the way we do business is transforming and it is a question of time. India is a country of entrepreneurs. There are a lot of similarities between the US and India. India has grown because of the entrepreneurship.
In most of the democratic countries, business is run by the private sector entrepreneurs. The government looks at the governance and India is moving in that direction. At the moment, it is like a khichdi (hodge podge). This has to be resolved. The Indian entrepreneurs are very capable. Anything which they have trusted, they have delivered -- whether it is telecom, steel, airport, port...anything. The moment the government entrusted them, see the kind of world class capacity they have built. This is the one thing has to be recognised that India is a place for entrepreneurs.
I will give you the smallest example, today ONGC’s market cap is $30 billion. If it is privatised, it will be $300 billion. I will give you the example, Hindustan Zinc, when we bought it, the market cap was Rs 2000 crore. Today in 10 years, time it is Rs 200,000 crore. It is the same company and it is run by the same people. We have to understand the DNA of India. The Indian DNA is the entrepreneur DNA and the more entrepreneurship comes, the more you will see how GST is the right direction. As for demonetisation, at least there is a prime minister who takes a decision.
We speak a lot about the ease of doing business and not enough about way of doing business. Has the way of doing business changed and does it need to change more in corporate India, for us to get to this $10 trillion? What happened over the last two-three years is also a formalisation of the economy on account of some of these reforms. Does it necessitate a change in the way of doing business?
Rana Kapoor: What Anil just said is you are evangelising the potential of the economy, that is number one.
Number two, we have to understand that deep within the economy there are a lot of choked assets which are going through a little bit of turbulence through new regulations and because of the regulations, there are speed breakers and now they will transit into productive capacity. India is the most beautiful country in the whole world, in my opinion, on a buy versus build opportunity.
Number three, I like to believe that the consumption demand is practically permanent. How do you convert that with investment in capital formation which where India has been a little hesitant and has been on pause? This has happened in the auto sector, in two-wheelers and many other sectors. But, industrialists must make bold decisions now to recognise that there is a very sweet spot in the economy.
Please remember India has precipitated as an economy for the last 10 years and the best part of the last seven years was that because of headwinds of global economics, we could not export, we could not even import intelligently and oil etc. The point is, today you have a global economy which is growing as was stated only last month at 3.9%.
When mature economies and with a $20-trillion base grow at 3.9%, that creates a lot of tailwinds for India to tap. India’s automatic story unless we put a bullet through our own foot is that we can do wonders in getting back to a 9% growth story at most in the next one and a half years.
Are you seeing early signs of revival in private investment activity? Why is it that corporate India is not still putting its money where its mouth is?
Anil Agarwal: They have a tremendous capacity to risk taking. I can tell you one thing for sure. It is all about taking the risk and Indian entrepreneurs are definitely looking at how the government policies are changing, how things are settling. It it is very important the way Prime Minister Modi is talking about taking away the bureaucracy. Everywhere, we have a red carpet, less bureaucracy. There is no question about the amount of talent available in India. If you go to California, the maximum start-up is by the Indians, then why not in India? It will happen. I 100% believe things will change.
You touched upon the demographic dividend and in India about 120 million people are estimated to join the workforce over the next 10 years. That is about 20% of our current workforce. How big an upside is that going to give to India from a long-term growth potential?
Dominic Barton: It is a humongous upside because the biggest driver of productive growth is labour participation. Most OECD countries are seeing the exact opposite. They have had a massive headwind coming their way. They have had a tailwind for 50 years. It is now a huge headwind but the key is educating them and skilling the people,. People are building businesses in these areas too, we can train people in three months to get jobs, we do not have to send them away for two or three years to do it.
We have to rethink. If we are going to do conventional education on that scale just forget it. I do not think it is going to work. But that is okay. Let us decide how to do it and then have people can move in the system. Again, companies are going to play a big part in that.
AT&T Randall Stephenson is a hardcore capitalist. About 40% of my people will not have the skills to do what is needed in five years. Stephenson developed an online training programme with Georgia Tech. Audacity is a part-time course and so mid-career people can do it. He just did it, he did not wait for someone to tell him to do it. He just built it and it works. I just think we have to do that. I do not know how the benefit of that works out to exact GDP numbers. But, I do know, it is huge.
The other opportunity of course is to talk about the e-commerce space and how big do you think the e-commerce opportunity will be over the next decade or so? In 2017, e-commerce sales were around the $15 billion mark. Can it touch $ 200 billion in the next 10 years?
Bob Van Dijk: We will get there a whole lot quicker than that, actually. Currently e-commerce penetration as a percent of overall retail is 3-4%. Now, if you look at the sort of global benchmark, in UK it is around 18-19%. The catch up that a market like China has made -- and I believe India is on the verge of doing it – is that they went from sub 10 to 17 in five years’ time. If India can get to 15% in internet penetration in five years, I think you would be talking about a 10x growth.
I think there is another really important factor that we think about when we think about e-commerce in India. If you look at structured retail as a percentage of total retail, it is one of the lowest in the world in India. That means when very large e-commerce businesses like Flipkart come to scale, they will take a bigger role in the lives of the average Indian than they would do in Western economies. It is hard to overstate the size of the opportunity in e-commerce. It is 10x in 10 years’ time.
I cannot not ask you about the one story that has gripped the headlines over the last few days which is of course the fraud with one of the PSU banks. Do incidents like this hurt our attractiveness as an investment destination?
William B Thomas: I feel that it depends on how the country responds when this happens. Understanding what exactly went wrong, how did it happen and ensuring that every single party involved recognises that trust in the capital markets is of critical importance to the growth of the country, frankly, the growth of any country. Trust is going to be essential to drive the growth that you are talking about.
Rana Kapoor: I want to make one point on what he said that every problem can be solved through reconciliation and not through media.
Mr Aggarwal spoke about whether the government should take this opportunity to liberalise the banking space further, he spoke about how it is time to look at privatisation of PSU banks. As an ace banker sir, do you think this is an opportunity for reforms in that direction?
Rana Kapoor: I have a very strong belief that the private sector in India naturally performs better than the more subdued public sector system. At the same time, the public sector system are the public utilities and you cannot unwind them so quickly. Nobody understands what has happened, the fiscal dispensation of India in the quantitative easing that happened in the global crisis in 2008-09- and 2010 happened through the public sector banking system. So, you cannot change the plates so easily because the government did not have the Uncle Sam kind of proposition. The Reserve Bank of India had only blessings of giving soft interest rates but the fundamental aspect is that you cannot change so easily.
My personal view is that the government banks have to survive and there has to be a proper forced ranking of the ones that can survive and the others that need to amalgamate and the others that need to demise but the public utility, public aspect of these banks in catering to national India cannot be taken away, it is not an easy decision, it is like MTNL and BSNL, it is like Air India. They are strategically mission critical right.
Mr Agarwal, when do you see us getting to the $10-trillion market?
Anil Agarwal: I can talk about my subject. I am a natural resource person. India has been importing 85% of oil while we have a $70 billion worth of reserves. I produce 30% oil of the country, I produce sweet crude. I produce the low sulphur crude and I believe that India should have at least 20, 30, 40 companies coming up and producing oil.
I produce oil at $6. I want the economy to revive and for that energy is fundamental. Number two, the natural resource we import 100% of goods. We have the best batch of gold, copper, iron ore, aluminium… anything you talk about, all these have to be processed in India. Thousands of SMEs have to develop, startups have to come up. With the kind of talent which we have, the banking systems, everything will revive the moment you revive SMEs.
.
When will we get to $10 trillion – 2030, before that or after that?
William B Thomas: I will say if you continue to harness the entrepreneurial spirit of the population and continue on the journey to open up the country for business, you will get there before 2030.
Before 2030 that is very optimistic. What do you say, Bob?
Bob Van Dijk: I might sound similarly optimistic and the thing that makes me really excited is the fact that India is on the way to build a real domestic technology innovation capability, unlike Europe which I think is actually a digital colony of the US in many ways. If India can avoid becoming a digital colony and really have an eco-system of tremendous entrepreneurs and decision makers and leaders here, they can accelerate every business.
When do you think we will get to $10 trillion?
Dominic Barton: We should set a target for 2030. I see no reason why you cannot. We used to be shocked and when the tighter economies grew at 6% to 7%, that was a shocker! Who says that has to be the case and going back to the demographics, what we are seeing on the ecommerce side sounds like other things that we can unleash. It would be shameful for not being ambitious. It is shameful for all those people. Let us be ambitious and let it rip.
Rana Kapoor: If we get to this $10 trillion, what happens is our per capita which is $1709 now, catapults to $6600. The demand for food, agriculture, education, healthcare -- every product -- for the next 12 to 13 years is going to be tremendous. This is the best consumption, best investment, best capital formation economy in the world today.
Edited excerpts:
What are the advantages that India has that will help the economy accelerate to a $10 trillion one by 2030?
Anil Agarwal: One is absolutely the huge technology background, the kind of mind we have in the south. People all over the world look at the technology hub and they source technology from India. Number two is infrastructure, not even 10% infrastructure has been made so 90% infrastructure is needed. For every country, infrastructure is the catalyst to start the economy. Number two, India has a tremendous base of natural resources whether it is oil, gold, copper, or iron ore and not even 2% has been explored yet. So, with this two and the economy opening up, I feel that the economy will accelerate much more.
Mr Rana Kapoor, as they say ummeed pe duniya kayam hai (the world lives on hope). Let us assume that things are on track on the policy front. What is the one thing that you think needs to be done over the medium term to ensure that India gets through that $10-trillion mark by 2030 like you pointed out?
Rana Kapoor: We have to take steps short, medium, long. In the short term, we have taken many significant steps in terms of stratospheric reforms that change. I need not elaborate on that. These reforms have to now become fundamental to the execution of the economy’s future success.
Secondly, we have to recognise that the jobs in India and the skills in India are fundamentally created in the micro, small, medium enterprises and that is the job pyramid which is fundamentally the most important in our nation. With a 1.25-1.5 billion population, the jobs are going to be created in SME sector. The fundamental thing is to create the skills there.
The third aspect is the infrastructural opportunity on the anvil. We are doing a good job of some sectors like roads and all. We can do fantastic on transportation and logistics. We can do even more brilliantly given a head-start on renewable energy. The 175 gigawatts output, which seemed to be a challenge, today is very feasible and can be available at a very lucrative rate, as long as there is proper legal and statutory conformance to the pricing regulations.
I am deeply convinced that the Indian economy is on a threshold of 10% CAGR between now and 2025. From 2025 to 2030, to build the momentum, we will need a CAGR of 12% to get to a $10-trillion economy. I am convinced it can happen.
Bob, you have been investing in India for some years now with stakes in Makemytrip and Flipkart. What is it that you are so bullish about when it comes to India? Is it the market size, is it the demographic dividend?
Bob Van Dijk: Many of the points that Dominic mentioned are the drivers that make us excited. The number of people that will be migrating into the middle class in India is a stunning number but there is one number that gets us even more excited. We started investing in the Indian market in earnest in 2008 when we had a big internet gathering. At that time, India had about 10 million internet users which was the same as Holland with a population of 60 million.
Five years ago in 2013, again we had a big internet gathering here and India had 30 to 40 million internet users, a market the size of France.
Today India has between 300-400 million depending over its metric you want to look at. It is bigger than the US, it is still obviously not as big as China but it is the second largest internet market in the world and it has gotten there in a period of three-four years fundamentally, representing probably the most exciting transformation of internet growth opportunity in history. This was also seen in China which was tremendous for us but also for China. Explosive growth drives innovation,. It leads to leapfrogs and the innovation that will come out of India will actually be new to the rest of the world that is what I am really excited about. It has happened in China, I am sure it will happen in India.
It happened in China so it should happen in India. Dominic, what could be the risk-in? People often talk about the execution risk. That is a concern you have flagged and as a consultant it is only a strategic but if the execution is not good, it is not going to have any impact. So, how big a risk is that when we talk of a $10-trillion journey if we get the execution wrong?
Dominic Barton: First of all, I agree with what has been said with the digitisation as also the speed. But I do not think things are not going to be nice. I am very bullish on that but on execution, what I worry more about is consistency. If a new government comes in at some point down the road, let us not change, you got to have consistency. That is really important for infrastructure because if people want to invest in infrastructure, they want to know whether there is going to be a consistency in the regulatory approach and how pricing is done.
If we are going to think about the rules and how decisions get made, you got to have consistency and I would also argue one thing that we can learn from what is going in the United States right now. We underestimated the impact that deregulation had on economic growth there and it is whether you like it or not and how that works. It has led to growth. One of the things I would be looking at in India is how come we get decisions made done faster? I would have a clock speed. Why does it take so long to make infrastructure decision?
Whatever the decision, there should be measures out there on speed. It is a competitive advantage to get more capital, to get more innovative. You can unleash more people power. So, to me the key is consistency of policy.
Bill, what is going to be the key catalyst of change in the next 5-10 years? Is it going to be a combination of the economy making this whole digital transition and GST? The upside is what we could get on account of these two factors. Is that going to be the key catalyst of change, according to you?
William B Thomas: The catalyst to change is going to come from the consistency that Dom talked about it and at the end of the day, the opportunity is there if the reforms continue to make India more open for business. That will create economic growth in increasing pace. But real catalyst to change is going to come when you recognise that educating the population of incredibly talented people that you have in this country. If we saw that, then the $10 trillion is within reach and that’s the reason why you got to open up. The country is not going to get there by itself. It has to be open to the world in terms of economic flows but the world will come here to access that talent if it is accessible and that is the real catalyst for change.
On GST, when will the upside of GST be visible to the economy? When will it be visible in corporate balance sheets?
Anil Agarwal: I think it is showing. You cannot expect anything to happen overnight. It has to settle down. The government, the public and the way we do business is transforming and it is a question of time. India is a country of entrepreneurs. There are a lot of similarities between the US and India. India has grown because of the entrepreneurship.
In most of the democratic countries, business is run by the private sector entrepreneurs. The government looks at the governance and India is moving in that direction. At the moment, it is like a khichdi (hodge podge). This has to be resolved. The Indian entrepreneurs are very capable. Anything which they have trusted, they have delivered -- whether it is telecom, steel, airport, port...anything. The moment the government entrusted them, see the kind of world class capacity they have built. This is the one thing has to be recognised that India is a place for entrepreneurs.
I will give you the smallest example, today ONGC’s market cap is $30 billion. If it is privatised, it will be $300 billion. I will give you the example, Hindustan Zinc, when we bought it, the market cap was Rs 2000 crore. Today in 10 years, time it is Rs 200,000 crore. It is the same company and it is run by the same people. We have to understand the DNA of India. The Indian DNA is the entrepreneur DNA and the more entrepreneurship comes, the more you will see how GST is the right direction. As for demonetisation, at least there is a prime minister who takes a decision.
We speak a lot about the ease of doing business and not enough about way of doing business. Has the way of doing business changed and does it need to change more in corporate India, for us to get to this $10 trillion? What happened over the last two-three years is also a formalisation of the economy on account of some of these reforms. Does it necessitate a change in the way of doing business?
Rana Kapoor: What Anil just said is you are evangelising the potential of the economy, that is number one.
Number two, we have to understand that deep within the economy there are a lot of choked assets which are going through a little bit of turbulence through new regulations and because of the regulations, there are speed breakers and now they will transit into productive capacity. India is the most beautiful country in the whole world, in my opinion, on a buy versus build opportunity.
Number three, I like to believe that the consumption demand is practically permanent. How do you convert that with investment in capital formation which where India has been a little hesitant and has been on pause? This has happened in the auto sector, in two-wheelers and many other sectors. But, industrialists must make bold decisions now to recognise that there is a very sweet spot in the economy.
Please remember India has precipitated as an economy for the last 10 years and the best part of the last seven years was that because of headwinds of global economics, we could not export, we could not even import intelligently and oil etc. The point is, today you have a global economy which is growing as was stated only last month at 3.9%.
When mature economies and with a $20-trillion base grow at 3.9%, that creates a lot of tailwinds for India to tap. India’s automatic story unless we put a bullet through our own foot is that we can do wonders in getting back to a 9% growth story at most in the next one and a half years.
Are you seeing early signs of revival in private investment activity? Why is it that corporate India is not still putting its money where its mouth is?
Anil Agarwal: They have a tremendous capacity to risk taking. I can tell you one thing for sure. It is all about taking the risk and Indian entrepreneurs are definitely looking at how the government policies are changing, how things are settling. It it is very important the way Prime Minister Modi is talking about taking away the bureaucracy. Everywhere, we have a red carpet, less bureaucracy. There is no question about the amount of talent available in India. If you go to California, the maximum start-up is by the Indians, then why not in India? It will happen. I 100% believe things will change.
You touched upon the demographic dividend and in India about 120 million people are estimated to join the workforce over the next 10 years. That is about 20% of our current workforce. How big an upside is that going to give to India from a long-term growth potential?
Dominic Barton: It is a humongous upside because the biggest driver of productive growth is labour participation. Most OECD countries are seeing the exact opposite. They have had a massive headwind coming their way. They have had a tailwind for 50 years. It is now a huge headwind but the key is educating them and skilling the people,. People are building businesses in these areas too, we can train people in three months to get jobs, we do not have to send them away for two or three years to do it.
We have to rethink. If we are going to do conventional education on that scale just forget it. I do not think it is going to work. But that is okay. Let us decide how to do it and then have people can move in the system. Again, companies are going to play a big part in that.
AT&T Randall Stephenson is a hardcore capitalist. About 40% of my people will not have the skills to do what is needed in five years. Stephenson developed an online training programme with Georgia Tech. Audacity is a part-time course and so mid-career people can do it. He just did it, he did not wait for someone to tell him to do it. He just built it and it works. I just think we have to do that. I do not know how the benefit of that works out to exact GDP numbers. But, I do know, it is huge.
The other opportunity of course is to talk about the e-commerce space and how big do you think the e-commerce opportunity will be over the next decade or so? In 2017, e-commerce sales were around the $15 billion mark. Can it touch $ 200 billion in the next 10 years?
Bob Van Dijk: We will get there a whole lot quicker than that, actually. Currently e-commerce penetration as a percent of overall retail is 3-4%. Now, if you look at the sort of global benchmark, in UK it is around 18-19%. The catch up that a market like China has made -- and I believe India is on the verge of doing it – is that they went from sub 10 to 17 in five years’ time. If India can get to 15% in internet penetration in five years, I think you would be talking about a 10x growth.
I think there is another really important factor that we think about when we think about e-commerce in India. If you look at structured retail as a percentage of total retail, it is one of the lowest in the world in India. That means when very large e-commerce businesses like Flipkart come to scale, they will take a bigger role in the lives of the average Indian than they would do in Western economies. It is hard to overstate the size of the opportunity in e-commerce. It is 10x in 10 years’ time.
I cannot not ask you about the one story that has gripped the headlines over the last few days which is of course the fraud with one of the PSU banks. Do incidents like this hurt our attractiveness as an investment destination?
William B Thomas: I feel that it depends on how the country responds when this happens. Understanding what exactly went wrong, how did it happen and ensuring that every single party involved recognises that trust in the capital markets is of critical importance to the growth of the country, frankly, the growth of any country. Trust is going to be essential to drive the growth that you are talking about.
Rana Kapoor: I want to make one point on what he said that every problem can be solved through reconciliation and not through media.
Mr Aggarwal spoke about whether the government should take this opportunity to liberalise the banking space further, he spoke about how it is time to look at privatisation of PSU banks. As an ace banker sir, do you think this is an opportunity for reforms in that direction?
Rana Kapoor: I have a very strong belief that the private sector in India naturally performs better than the more subdued public sector system. At the same time, the public sector system are the public utilities and you cannot unwind them so quickly. Nobody understands what has happened, the fiscal dispensation of India in the quantitative easing that happened in the global crisis in 2008-09- and 2010 happened through the public sector banking system. So, you cannot change the plates so easily because the government did not have the Uncle Sam kind of proposition. The Reserve Bank of India had only blessings of giving soft interest rates but the fundamental aspect is that you cannot change so easily.
My personal view is that the government banks have to survive and there has to be a proper forced ranking of the ones that can survive and the others that need to amalgamate and the others that need to demise but the public utility, public aspect of these banks in catering to national India cannot be taken away, it is not an easy decision, it is like MTNL and BSNL, it is like Air India. They are strategically mission critical right.
Mr Agarwal, when do you see us getting to the $10-trillion market?
Anil Agarwal: I can talk about my subject. I am a natural resource person. India has been importing 85% of oil while we have a $70 billion worth of reserves. I produce 30% oil of the country, I produce sweet crude. I produce the low sulphur crude and I believe that India should have at least 20, 30, 40 companies coming up and producing oil.
I produce oil at $6. I want the economy to revive and for that energy is fundamental. Number two, the natural resource we import 100% of goods. We have the best batch of gold, copper, iron ore, aluminium… anything you talk about, all these have to be processed in India. Thousands of SMEs have to develop, startups have to come up. With the kind of talent which we have, the banking systems, everything will revive the moment you revive SMEs.
.
When will we get to $10 trillion – 2030, before that or after that?
William B Thomas: I will say if you continue to harness the entrepreneurial spirit of the population and continue on the journey to open up the country for business, you will get there before 2030.
Before 2030 that is very optimistic. What do you say, Bob?
Bob Van Dijk: I might sound similarly optimistic and the thing that makes me really excited is the fact that India is on the way to build a real domestic technology innovation capability, unlike Europe which I think is actually a digital colony of the US in many ways. If India can avoid becoming a digital colony and really have an eco-system of tremendous entrepreneurs and decision makers and leaders here, they can accelerate every business.
When do you think we will get to $10 trillion?
Dominic Barton: We should set a target for 2030. I see no reason why you cannot. We used to be shocked and when the tighter economies grew at 6% to 7%, that was a shocker! Who says that has to be the case and going back to the demographics, what we are seeing on the ecommerce side sounds like other things that we can unleash. It would be shameful for not being ambitious. It is shameful for all those people. Let us be ambitious and let it rip.
Rana Kapoor: If we get to this $10 trillion, what happens is our per capita which is $1709 now, catapults to $6600. The demand for food, agriculture, education, healthcare -- every product -- for the next 12 to 13 years is going to be tremendous. This is the best consumption, best investment, best capital formation economy in the world today.
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