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'China will lead till 2050, then it'll be India'

Last updated on: December 12, 2007 15:11 IST
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Do political reforms and business process outsourcing intrigue you? Do you take a keen interest in innovation and entrepreneurship in information technology in India and security? Is India actually shaping up to be a super power?

Do you need information about the state of development in India? What needs to be done to expedite India's growth?

In an hour-long chat on on Tuesday, Stanford don and author Rafiq Dossani spoke to our readers. Here is the transcript:

Rafiq Dossani says, 
Hallo, everyone, this is Rafiq Dossani. I am looking forward to discussing "India Arriving" with you. Though most may not have read it, I'll be glad to run through the basic thesis, or you could read the interview posted on the Rediff site.

Madan asked, How about IT in the next 5 years. Say what about companies like Infosys TCS Wipro.. in the next 5 years in growth
Rafiq Dossani answers,  at 2007-12-11 14:36:03Living in Silicon Valley, as I do, I can tell you that the large IT firms in India are currently giving sleepless nights to their western competitors. From being coders (programmers) 5 years ago, they have become system integrators and, slowly, are entering strategic consulting. Thus, they are touching the highest value added portions of the work that IBM, Accenture, etc., do
Dean asked, According to Manmohan Singh, he said he would bring 'Human face reforms'. After 12 long years, Indian poor people became much poor and a lot of people in the way of suicide. Do you have to tell something them?
Rafiq Dossani answers, Although reforms were started by Manmohan Singh in 1991, they were concentrated on things that would help large firms in the private sector do well, such as delicensing of industry. This was probably necessary at the time, given the financial crisis. However, the poor have not benefited from those reforms - particularly those in rural areas. So, you have a point - though I see some profound changes in the political structure that will help them: something we can discuss further, if you like.
kalyanchaubey asked, I work in one of the most famous Silicon valley based chip manufacturer. The problem we face here in India office is the middle leadership. The managers here can not think out of the box. The reason perhaps is the education system, even in the IITs people do lot of theory oriented work. Because of that, no excellent high-tech product has come out of India. May be there are bits and pieces here and there. But no indigenious innovation like a Laptop, a Mercedes car, an i-Pod, www. There are lots of talk . But no result has been evinced yet. Somehow starting from the onset, free thinking is not encouraged in India. How this can be changed?
Rafiq Dossani answers, The education system is being completely turned around by the entry of private providers. As you may know, the private colleges now account for 80% of engineering seats and over 50% of all college seats. Some of these are of good quality, some are not. But there is a deeper problem to the education system. A student at Stanford University recently compared the content of the English language examinations at 10th standard under the ICSE system. She found that there had been no change in the proportions of rote-learning, comprehension, problem solving and creative thinking over time. The exams are still 90% focused on testing rote-learning.
Roger asked, Hi Rafiq. How do you feel about the standard of technical and professional education in India? Is the quality of education available to the masses in India good enough to support the economic growth in the next few years?
Rafiq Dossani answers, This relates to the earlier question on education. I think that the reliance on private providers has a short-term downside and a long-term benefit. The short-term problem is that the good government institutions like the IITs are rapidly losing their best faculty to the private colleges. This is because the private colleges can afford to pay 3x-4x what the IITs pay (which is capped at Rs.50,000 p.m.). The long-term benefit is that the IIT model is not sustainable anyway and has to be replaced by a system of local, state-owned colleges and private providers.
Mahi asked, Sir, do you foresee Indian economy superceding China's?
Rafiq Dossani answers, This is a question I am often asked and I enjoy answering it! The reality is that Chinese infrastructure is far ahead and the quality of the workforce in terms of having a minimum level of secondary education and health care is very high. For example, primary health care in India touches less than half the population. In China it is 100%. Secondary education in India only reaches 35% of the population, in China it is 70%. The advantages that India has are better institutions (such as institutions for regulating government, bureaucracy, judiciary, stockmarkets, etc.). For example, in China, there is no real protection of intellectual property, so it is routinely stolen. India's other advantage is a longer culture of entrepreneurship. So, it will be interesting to watch how this plays: India's rural population, poor infrastructure, weak health care and education vs better institutions and entrepreneurship. My guess is China will lead till 2050 and then India will lead
Bharath asked, How does the fallout of the Nuclear deal with US affect India and its much talked growth? Are the Indian students aspiring to study abroad going to be affected?
Rafiq Dossani answers, The US is very keen to get this deal - without it, they will not count India as an ally. Being an ally of the US is a double-edged sword since a superpower will insist of having its way in times of crisis. So, it is an interesting situation that we are faced with in India-US relations: Indian politicians need to be responsive to local needs for food and water, while managing relations with the US in order to access their capital and technology. The rankings of these needs will conflict with each other some times. But it won't affect Indian students aspiring to study in the US in any way.
KSRao asked, Many leaders of the current India are promoting narrow casteist ideologies and endangering the future of democracy. How can we prevent this? How can we make the illiterate masses to be interested in democracy and its functioning?
Rafiq Dossani answers, The rise of casteism is happening simultaneously with the rise of regional politics. The latter is a good thing because it brings politicians in closer touch with the people who elected them. India lost out for many decades because of New Delhi's insistence that it alone must control the nation's destinies. The bad part is that immaturities such as casteism and other ethnic divides will increase for a while. On the whole, I see regionalism as a good thing provided civil society can develop as a counterweight to its ills.
Anjum asked, Hi Rafiq, this is Anjum Rajabali. The way the English-language media has reported Nandigram, and the way it editorialises on the Left's position on every issue, makes us wonder if there really is a conspiracy to discredit the CPM for stalling the Indo-US
nuclear deal. What is your analysis?
Rafiq Dossani answers, Luckily, the English language media's influence is restricted to those who matter less and less in Indian politics, i.e., politicians in New Delhi. I think that, in the states, there is acceptance that the Left is a legitimate political player, with greater concern for the problems of the poor than New Delhi. You may ask why the English language media is unresponsive to all but big business. I think its ownership structure forces it to be so.
anju asked,  do not completely agree with your viewpoint on the future of Indian IT companies. They would definitely grow but not necessarily move up the value chain. They are able to compete with IBMs and Accentures not really because of the value they are able to add but because of the low cost for the low value services that they offer. ravikumar says, hi mr. Dossani how are you
Rafiq Dossani answers, I just did a large conference at Stanford last Friday before coming to Mumbai today. The conference was on IT services. Speakers included IBM, CapGemini, and other biggies from the west, apart from the Indian leaders, TCS, Infy, Wipro, Satyam and Cognizant. So, you can say it was quite representative. We also had several client firms present. It became clear that the western firms' have serious quality issues. The evidence is that they are poaching people from TCS, etc., rather than the other way around. As one person put it to me, "we're just supporting IBM because we don't want it to disappear." That said, I agree that applications development remains the bread and butter of the Indian firms and that, without the cost advantage, they would not have been competitors. But, now, the situation has rapidly changed.
drupad asked, sir...if u have a background in finance..then u would agree tht america is financially it worthwile being an aemrican ally at this time?
Rafiq Dossani answers, I don't agree that the US is financially (or intellectually) bankrupt. The US's strengths in technology, project management, education are there for all to see. The NRIs' role in transferring those skills is absolutely key to the future of India's IT and several other industries. That said, the weakness of the US is that it is unable to see other countries in terms of pluralism. It is either "you are with us or against us." This was why Nehru could never get along with the US, for example, so it is not a new, post cold war attitude. It is a feature of their somewhat homogeneous nationalism. Whereas, India's strength is its diversity. In the world of the 21st century, the market economy and democracy may advance everywhere, but tastes, faiths, cultures, etc. will remain different. India is like that already. Succeeding in the 21st century will be easier if outside observers understand how India is doing it.
Sanjay asked, Sir, you don't think if people of Gujarat should give chance to Mr. Narendra Modi because he is welcoming the industires in the gujarat. I personally think that he should given the chance - let me tell you that i m not in any party - not BJP / Congress.
Rafiq Dossani answers, Plenty of questions on Gujarat, no doubt because of the elections! One wishes civil society was as active when Mr. Modi was doing his best to subvert it. On Gujarat's progress, I spoke at a management institute in Ahmedabad recently, so am aware of the tremendous progress that Gujarat has made economically. But, one does not want the crony capitalism that he represents to succeed - that is the China-Indonesia model, very unsuited to India.
rohit asked, Sir, do you support what Left Front did in Nandigram?
Rafiq Dossani answers, Short answer, no!
Anwar asked, Sir i had read about US economy slowdown which said to be would be affecting indian economy too. Does this will affect very badly for our economy ? Does we are so dependant on US.??
Rafiq Dossani answers, The weakness of the US economy is being underreported even in the western press. It is very unusual for the government to put together a package to save vulnerable home-owners - an indication of the depth of the problems. India's resurgence is less dependent on the US economy than you might think. Some sectors are heavily dependent, eg., IT, which generates 5% of GDP; but most of the Indian economy is internally driven and becoming more so with time. I, therefore, don't believe that the US slowdown will hurt India much.
fr asked, When we talk about Indian development mostly we talk about IT. and what is more apparent to you staying in Stanford, is the IT. But still there are other sectors except IT services where India is lagging behind. We do not make sportscar. We do not make cruiseliners. we do not make other world quality products. Except IT services, do you see any future of India as a high-tech high quality high cost product giant?
Rafiq Dossani answers, As I had noted in an earlier reply, India does not have the quality of manpower for large scale manufacturing. This is due to poor provision of healthcare and basic education. It is changing, but slowly. The best people are being cherry-picked to become engineers and management graduates for the services sectors. But no country in history has succeeded without a manufacturing base and I doubt if India will be the exception. That's why I made the earlier forecast that it will be 2050 before India will be a global force in manufacturing.
ChandanOne asked, Sir, what is your take on the situation unfolding in Pakistan in terms of security implications for India? Is there a chance of pakistani nukes falling into jehadi hands? Should India prepare and plan for such a scenario? Is there a possibility that Pakistan may break up?
Rafiq Dossani answers, Pakistan has not had the institutional base of India. This happened despite a similar economic and social base at independence. The reason was that the leaders of Pakistan's independence struggle came from what became parts of India post-independence, and so found themselves at odds with the majority powers in what became Pakistan, i.e., the feudal areas of Punjab and Sindh. The result was that democracy never took hold. When it did, for short periods, the feudal powers captured democracy. This is still the situation. Hence, Pakistan's success relies on a balance between the army, judiciary and an elected legislature. It just does not have the political maturity to go into a purely democratic system. This imposes severe risks, which we could go into in more detail, perhaps too long to go into here
KSRao asked, Prof. Kishore Mahbubani believes the future belongs to India because of its pluralistic character. Do you share this view?
Rafiq Dossani answers, yes, I absolutely agree
Rafiq Dossani says, Thanks, everyone, for participating. Feel free to keep in touch - my Stanford em address will always get me. And, for those who read the book, please send me your comments.

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