Aug 29 2014 : The Economic Times (Delhi)
ET EXCLUSIVE - `If India Unleashes its Full Potential, It can Grow Faster than China'
Partha Ghosh & Ravi Teja Sharma
|
New Delhi:
|
Boston Consulting Group chairman Hans-Paul Bürkner is hopeful about Modi govt but is concerned about regulatory hurdles
The next 10 years could be India's decade and it is likely to beat even China in terms of growth, Boston Consulting Group chairman Hans-Paul Bürkner said.“I think there is no reason why India should not go back to 7% growth. I think if India unleashes its full potential, it can grow faster than China. China's growth rate will still be 6.5-7%, which is still very good,“ he said.
But India needs to open up its economy . “It requires significant investments in people, education skills, infrastructure and significant deregulation. It is a much-regulated market and its bureaucracy pushes papers around without really getting to decisions, which frustrates a lot of people,“ Bürkner, 61, said in an exclusive interview with ET. He hoped that the new regime under Prime Minister Narendra Modi will work towards changing this perception.
The Indian government has been making policy changes, pushing to get projects stuck in red tape moving again and trying to boost investor sentiment as it seeks to revive an economy that has slumped to decadal low rates of growth.
Bürkner said this decade would also see the rise of global Indian companies as they cross borders for acquisitions. On the other hand, a lot of companies globally are also waiting to enter India to tap into its demand as well as for its people. “We see more and more R&D centres, IT centres, and also more factories here. Ultimately, people want to build businesses here to export from India,“ he said.
These companies, however, are concerned about regulatory and other obstacles such as labour laws in India. “It is not always easy to set up a factory here. The infrastructure in some ways is an obstacle, there are lots of regulations,“ he said.
While Bürkner was enthused by the prime minister's recent announcements about a vision for local manufacturing in India and a stress on the `make-in-India' tag, he pointed out that getting permissions to set up businesses in India are a bit of a concern.
“To establish things here you need to have land, permissions from various agencies. If you have to deal with local, state and federal agencies, and there are dozens of them, and if everybody creates problems then that will be a challenge,“ he said. “And so are the labour laws. They need to become flexible.“
BCG works with several governments and on many socially relevant initiatives through its social impact initiative. At the global level, it works with the World Food Programme, the Bill and Melinda Gates Foundation, Save the Children, Teach for All and WWF (World Wide Fund for Nature) and also with several government bodies.
In India, for instance, it is working with the Haryana government on a transformation programme to improve the quality of teaching in 50,000 government schools in the state and had earlier helped reform the public distribution system (PDS) system in Odisha.
Bürkner said Modi has laid much emphasis on education and skill development, which is very important. “It's not just formal education, but vocational skills as well. We also need a lot of mechanics, electricians, plumbers and carpenters,“ he said.
Through its partnerships, BCG, he said, helps improve the quality of education and understands what works in different areas. In Haryana, the partnership with the government is not just an intervention at the school level -it is a complete system-wide transformation that looks at starting with the principal secretary , to the performance management down to change management, pedagogy changes.
It also ran pilot programmes in Odisha in partnership with the World Food Programme to improve the PDS that was riddled with leakages. “We created a holistic model after studying different issues and submitted it to the ministry of food, which then asked states to implement suitable parts,“ he said. BCG estimates that with these best practices, there was a potential to save anywhere between . 8,000 crore to ` ` . 10,000 crore in the country.
But India needs to open up its economy . “It requires significant investments in people, education skills, infrastructure and significant deregulation. It is a much-regulated market and its bureaucracy pushes papers around without really getting to decisions, which frustrates a lot of people,“ Bürkner, 61, said in an exclusive interview with ET. He hoped that the new regime under Prime Minister Narendra Modi will work towards changing this perception.
The Indian government has been making policy changes, pushing to get projects stuck in red tape moving again and trying to boost investor sentiment as it seeks to revive an economy that has slumped to decadal low rates of growth.
Bürkner said this decade would also see the rise of global Indian companies as they cross borders for acquisitions. On the other hand, a lot of companies globally are also waiting to enter India to tap into its demand as well as for its people. “We see more and more R&D centres, IT centres, and also more factories here. Ultimately, people want to build businesses here to export from India,“ he said.
These companies, however, are concerned about regulatory and other obstacles such as labour laws in India. “It is not always easy to set up a factory here. The infrastructure in some ways is an obstacle, there are lots of regulations,“ he said.
While Bürkner was enthused by the prime minister's recent announcements about a vision for local manufacturing in India and a stress on the `make-in-India' tag, he pointed out that getting permissions to set up businesses in India are a bit of a concern.
“To establish things here you need to have land, permissions from various agencies. If you have to deal with local, state and federal agencies, and there are dozens of them, and if everybody creates problems then that will be a challenge,“ he said. “And so are the labour laws. They need to become flexible.“
BCG works with several governments and on many socially relevant initiatives through its social impact initiative. At the global level, it works with the World Food Programme, the Bill and Melinda Gates Foundation, Save the Children, Teach for All and WWF (World Wide Fund for Nature) and also with several government bodies.
In India, for instance, it is working with the Haryana government on a transformation programme to improve the quality of teaching in 50,000 government schools in the state and had earlier helped reform the public distribution system (PDS) system in Odisha.
Bürkner said Modi has laid much emphasis on education and skill development, which is very important. “It's not just formal education, but vocational skills as well. We also need a lot of mechanics, electricians, plumbers and carpenters,“ he said.
Through its partnerships, BCG, he said, helps improve the quality of education and understands what works in different areas. In Haryana, the partnership with the government is not just an intervention at the school level -it is a complete system-wide transformation that looks at starting with the principal secretary , to the performance management down to change management, pedagogy changes.
It also ran pilot programmes in Odisha in partnership with the World Food Programme to improve the PDS that was riddled with leakages. “We created a holistic model after studying different issues and submitted it to the ministry of food, which then asked states to implement suitable parts,“ he said. BCG estimates that with these best practices, there was a potential to save anywhere between . 8,000 crore to ` ` . 10,000 crore in the country.
