India Economic Summit

Building Centres of Excellence

New Delhi, 2-4 December 2007

Report
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Contents

Page 3
Preface

Page 4
Summary: Building Centres of Excellence

Page 8
State and National Competitiveness

Page 10
Inclusive Growth

Page 14
Infrastructure Development

Page 18
Risk Management

Page 22
Building Centres of Excellence in the WorkSpace

Page 24
Acknowledgements
2 | India Economic Summit
Preface
The theme of the 23rd India Economic Summit,
Building Centres of Excellence, acknowledged India’s
remarkable achievements in creating highly competitive
and innovative companies. But more importantly, it also
underscored the challenge of extending that success
beyond traditional industry, urban and academic
centres to rural communities, where 70% of the
population still resides. The record 800 leaders from
business, government and civil society, representing
over 40 countries, were in strong agreement that,
without building centres of excellence in new domains
and states, the country’s economic and demographic
strengths could transform quickly into weaknesses in a
highly-competitive global economy.
Tellingly, there was no evidence of complacency setting
in as a result of the country’s record GDP growth,
strengthening currency and historically high equity
markets. Indeed, the challenge of spreading higher
growth across more state economies and developing
industries, and into rural areas, was seen as remaining
for a generation or more. Therefore, the mood at this
year’s Summit was about how to get things done in
these areas, sooner and faster.
Discussions did not focus, as in the recent past, on
how to achieve greater consensus among industry,
state and national leaders around key growth
challenges, but were directed instead at adopting and
scaling grassroots innovations that are delivering faster
and greater results on the ground.
It was in this spirit of getting things done faster that the
India Economic Summit programme was designed to
tap into the collective intellect, on-the-ground experience
and global insight from among its community of
stakeholders. There was perhaps no better symbol of
this spirit than the introduction of the WorkSpace to the
India Economic Summit, which offered a unique
collaborative environment for decision-makers to co-
design responses to address the big challenges of today
and tomorrow. A series of highly interactive and
professionally facilitated WorkSpace sessions focused on
such topics as expanding India’s competitive edge,
developing a strategy for climate change, leveraging
innovations from social entrepreneurs and building the
new Indian multinational. We also published the
India@Risk 2007 report in collaboration with the
Confederation of Indian Industry (CII). And, for the third
consecutive year, the Schwab Foundation for Social
Entrepreneurship presented the India Social Entrepreneur
of the Year Award for 2007 on the occasion of the
Summit. We look forward to continuing to build on these
successful initiatives in the coming years.
As you read the key points and data presented in this
report, we look forward to hearing your thoughts and
welcome your suggestions as we prepare the
programme for the 24th India Economic Summit,
scheduled for 16-18 November 2008. The challenges
faced by India, and the world for that matter, are more
complex, interrelated and intractable than ever before.
With over two decades of commitment to addressing
these challenges, we hope that the India Economic
Summit can continue to serve you as an important
platform for collaborative thinking and creative solutions.
W. Lee Howell
Senior Director
Head of Asia and Global Agenda
3 | India Economic Summit
Summary:
Building Centres of Excellence
“ As long as advanced and developed
economies have an edge over
developing countries in knowledge,
financial and material resources,
I do not think we should rush to the
conclusion that power has shifted.
Palaniappan Chidambaram, Minister of Finance of India
While there was confidence among the participants at
the 23rd India Economic Summit, there was no
complacency. India’s Finance Minister Palaniappan
Chidambaram, for example, was candid in his
assessment of the challenges ahead. Despite all the
progress India has made in recent years, particularly
as a result of substantial investment and spending
growth, “my worry is whether we are getting bang for
the buck,” he said. “While outlays have increased
manyfold from 2003-2004 to 2008, are these outlays
resulting in outcomes in the field?”
That was the main question on participants’ minds: Is
India getting the results it needs now that it is
achieving 8-9% growth a year and foreign investment
has risen sharply? It was not enough to recognize
problems; participants focused on finding solutions to
the root causes of India’s competitiveness deficiencies.
Minister Chidambaram, for his part, pinpointed the
lack of sufficient restructuring in the financial sector as
an obvious failing. “The financial sector is the heart of
the economy and we haven’t been able to push
through reforms; that’s a disappointment.”
4 | India Economic Summit
“ The greatest challenge facing India is
to build an effective, efficient, scaleable
and sustainable infrastructure for this
“
“ fast-emerging economy.
Hector de J. Ruiz, Chairman of the Board and Chief Executive
Officer, AMD (Advanced Micro Devices), USA; Co-Chair of the India
Economic Summit
At the end of the Summit, participants agreed on the
areas in which action will have the greatest impact.
The agenda of priorities for the coming year includes
skills development, improving governance, upgrading
education, building public-private partnerships (PPPs)
in infrastructure, and addressing environmental
degradation and water scarcity. All are enormous
tasks, but perhaps the most challenging will be the
development of India’s enormous human resources
through skills training and education. In many of the
sessions, time after time, participants stressed that it
is critical for India to take full advantage of its
demographic advantages by providing the schooling
and instruction necessary to raise the skill levels of its
expanding workforce and to create the millions of jobs
necessary to allow them to be productive and
contribute to inclusive economic growth.
India will be able to build the many centres of
excellence it needs to sustain high growth with equity
over the long term only if it can educate and train its
people to be productive at all levels of society and in
both the rural and urban areas. “What we now need
to do is roll up our sleeves and deliver on the

“ India has always been outside the
epicentre of events and yet we get drawn
in by the sheer gravitational pull of our
“ State and National Competitiveness
geography, resources and potential.
Anand G. Mahindra, Vice-Chairman and Managing Director,
Mahindra & Mahindra, India; Co-Chair of the India Economic Summit
expectations for India that exist around the world,”
stated Anand G. Mahindra, Vice-Chairman and
Managing Director, Mahindra & Mahindra, India, and
Co-Chair of the India Economic Summit. He added
that the country needs to develop the competencies
that will deliver on the promise of India.
The India Economic Summit, convened in partnership
with the Confederation of Indian Industry (CII), was
organized under four sub-themes: State and National
Competitiveness, Inclusive Growth, Infrastructure
Development and Risk Management. In addition, for
the first time at the India meeting, four WorkSpace
sessions were held on the following topics: Innovative
Models: Expanding India’s Competitive Advantage,
Getting Ahead of the Climate Change Curve, Excellence
Despite the Odds: The Social Entrepreneur in India
and Unlocking the DNA of an Indian Multinational.
“ A key to future growth is the enormous
domestic market and the consumption-led
economy, which has powered India’s growth “
and provided a degree of resilience and
protection from global ebbs and flows.
Orit Gadiesh, Chairman, Bain & Company, USA; Member of the
Foundation Board of the World Economic Forum; Co-Chair of the India
Economic Summit
India has become one of the most successful
economies in the world in attracting the attention of
global business strategists and investors. But to
improve its competitiveness in the long term, it will
have to address its economic weaknesses. The most
pressing among them is the need to increase skills
training to better prepare its young population to enter
the workforce.
Poor infrastructure, differences in regulatory and policy
regimes across states, the absence of a single
national market, deficiencies in the manufacturing
sector, bureaucratic red tape and corruption are
among the key obstacles to improving India’s global
competitiveness.
• A major priority is the skills deficit. While labour
productivity has improved, India does not have the
skill levels to sustain 9% growth.
• Training young people for vocational work is critical
if India is to take full advantage of the demographic
dividend it can gain from its fast-growing
workforce.
• Government-controlled education and vocational
schemes may not be sufficient to address the
problem. The private sector must be involved to
create jobs for new entrants.
• Investors should be encouraged or even required
to set up training institutes in their respective
sectors.
5 | India Economic Summit
“ There are great opportunities in India,
but don’t take anything for granted.
Keep investing in education and
“ “
address infrastructure.
Edward J. Zander, Chairman and Chief Executive Officer,
Motorola, USA; Co-Chair of the India Economic Summit
Inclusive Growth
India faces a major challenge in dealing with its urban
poor and the even larger numbers of people who live
in poverty in rural areas. As India aims for growth with
equity, it may be difficult to improve conditions in the
countryside without making the situation worse in the
cities.
• About a quarter of Indians live below the poverty
line, while almost 70% of the population is in the
countryside.
• The rising discontent among the poor has led to a
political backlash, including violent protests and
insurgency. The growth of regional parties is, in
part, a result of the need for the disadvantaged to
have their voices heard.
• To address the concerns of the poor and
disenfranchised, the government and national
parties will need to embrace local interests. A key
priority must be to increase spending on rural
infrastructure.
6 | India Economic Summit
You need to take the untapped human
resources and bring them to fruition;
“
otherwise, India will have a different
value proposition.
Ben J. Verwaayen, Chief Executive Officer, BT, United Kingdom;
Co-Chair of the India Economic Summit
• The private sector has a role to play. Banks, for
example, can promote microfinance and provide
rural Indians with education on the basics of
finance.
• The government must raise incomes in the
countryside without accelerating the rush to the
cities. Tools to achieve this include technology to
turn rural India into a service centre for urban areas
and regulations and incentives to encourage
companies to “ruralize”.
Infrastructure Development
One of the biggest challenges India faces is to
address its lack of adequate and well-maintained
infrastructure. Infrastructure investment must rise to
around 9% if India is to sustain 10% growth. The
challenge: to forge the public-private partnerships
necessary to marshal the resources and expertise
needed to dramatically improve the situation.

“ Within India, the challenge is how
“
to create 100 million new jobs in
the next 15 years.
Mukesh Ambani, Chairman and Managing Director, Reliance
Industries, India; Co-Chair of the India Economic Summit
• The public sector has insufficient resources to
tackle the infrastructure deficit, while the private
sector has funding and talent issues of its own.
• The successful completion of the National Highways
Authority’s Golden Quadrilateral project is an example
of a public-private revenue sharing agreement.
• Even if clearly defined projects existed, pricing and
risk management, especially between public and
private entities, need more sophistication and
should move away from the traditional “cheapest
supplier” mindset.
• Cross-sector government cooperation must be
improved so that an integrated approach may be
taken in constructing infrastructure projects such
as airports, which will need roads and transport
links to allow easy access.
• India does not have sufficient capacity to execute
multiple mega-construction projects due to the lack
of qualified engineering firms and the paucity of
trained manpower.
Kamal Nath, Minister of
Commerce and Industry
of India
Risk Management
In managing the risks that threaten its current
expansion, India must aim to turn some of the threats
into opportunities. Although the rest of the world
considers India to be an emerging superpower, it is in
the country’s strategic interest to resist complacency
and to avoid hubris.
• Economic success should not be narrowly defined by
the middle class, white-collar ideal. India needs to fill
the burgeoning demand for skilled, blue-collar labour.
• India must address global problems such as
HIV/AIDS and global warming.
• Climate change is exacerbating the rapid decline of
India’s freshwater supplies. India must focus on
building the necessary infrastructure to harness
rainfall and floodwaters for productive use.
• Protectionism, both at home and abroad, is
another looming risk to India’s growth.
• The prospect of a US economic slowdown may
also have a negative impact, but India may be
better insulated from a recession in America than
East Asian economies.
• India could risk raising social tensions if not enough
jobs are created to absorb the increase in the
workforce. A major challenge is to provide young
people the skills they need to be productively
employed.
7 | India Economic Summit
State and National Competitiveness

“ Labour productivity has been rising but our skill levels

have been abysmal. The skill levels of the labour force
are lower than what we need for 9% growth.
“
Suman Bery, Director-General, National Council of Applied Economic Research, India

In recent years, India has clearly been one of the most Figure 2: India's Competitiveness

successful economies in the world in attracting the India shares characteristics of both factor- and innovation-driven economies

Institutions
attention of global business strategists and drawing in Innovation Infrastructure

foreign investment (see Figure 1). According to official Business sophistication Macroeconomic
stability
figures, FDI in the financial year 2006-2007 totalled Innovation-driven economies
India
Factor-driven economies
US$ 19.5 billion, up from US$ 7.7 billion the year Market size Health and primary
education
before. The government expects US$ 30 billion for
2007-2008, an ambitious target that is still only about Technological
readiness
Higher education
and training

half the inflow to China. The Planning Commission Financial market Goods market efficiency
sophistication
Labor market efficiency
forecasts that the economy will grow by 8.5% to 9%
over the current financial year to March 2008. The goal Source: World Economic Forum

going forward: sustained 9% growth that is inclusive.

regimes across states, the absence of a single national
To get there will require addressing serious market, the need to develop the manufacturing sector,
constraints. At this and previous India Economic bureaucratic red tape and corruption. Each pressing
Summits, participants have identified and debated the problem requires urgent attention. The divide among
widely recognized challenges confronting India as it states, for example, is already leading to dangerous
seeks to boost its global competitiveness and achieve social tensions and anti-government protests. According
China-level growth rates (see Figure 2). These familiar to a recent study by Lehman Brothers, the poorest
obstacles to raising productivity include poor five states, where about 40% of the total Indian
infrastructure, differences in regulatory and policy population lives, account for just a quarter of national
output, while the five richest, with only about 26% of
Figure 1: Foreign Investment in India the population, produce more than 40% of the output.
Portfolio inflows for the first half of fiscal year 2008 greater than 2006 and 2007 combined

At this Summit, a spotlight was trained on one glaring

Foreign portfolio investment inflows (US$, millions)

$25,000

20,000
deficiency that has not received as much attention in
previous meetings: the need to increase vocational
15,000
training and technical skills in the workforce. India’s
10,000
achievements in IT and pharmaceuticals, as well as the
5,000
cadres of top managers who have spread across the
0 world are testament to the talent that India has
-5,000 produced. What India lacks are people with the skills to
1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008*

keep its economy humming – the masons, carpenters,

Source: Reserve Bank of India hotel waiters and armies of workers who are the
Note: * Years are fiscal years ending March. 2008 data includes FII flows through 19 Oct 2007,
and ADRs/GDRs through July 2007. foundation of any economy. “Labour productivity has

8 | India Economic Summit

 “ “
“ We need skills development
as a major initiative.
Sunil Bharti Mittal, Chairman and Group Chief Executive
“ Young people want to learn and
become skilled.
Ambika Soni, Minister of Tourism and Culture of India
Officer, Bharti Enterprises; President, Confederation of Indian
Industry (CII), India

been rising but our skill levels have been abysmal,” said
Suman Bery, Director-General, National Council of
Applied Economic Research, India. “The skill levels of the
labour force are lower than what we need for 9% growth.”
Much has been made of India’s youthful demographics
where over half the population is under the age of 25
(see Figure 3). According to Goldman Sachs, the
number of people of working age (15-60 years old) will
peak at about 64% around 2020. This can be a
significant global competitive advantage, but only if the
jobs are created to accommodate the bulge in the
workforce. It all starts with education, Indian Finance
Minister Palaniappan Chidambaram told participants.
“India can reap the benefit of its demographic
dividend and avoid it turning into a demographic
liability by ensuring that every child can access quality
education and stay in school for at least 10 years.”
It also requires a concerted effort to provide skills
training. The government acknowledges this critical
task. “For every one of our people to benefit from new
employment opportunities being created across the
economy, we must ensure that every Indian is
educated and skilled,” said Prime Minister Manmohan
“The government needs to let go of its control over
the education system,” said Shiv Nadar, Founder,
HCL; Chairman and Chief Strategy Officer, HCL
Technologies, India. Syllabus-driven state schools do
not give students the skills they need to compete.
“We need skills development as a major initiative,”
Sunil Bharti Mittal, Chairman and Group Chief
Executive Officer of Bharti Enterprises and President
of the Confederation of Indian Industry (CII), agreed.
Colette Mathur, Senior Adviser at the World Economic
Forum, offered a practical proposal with respect to the
development of special economic zones: require
investors to set up a training institute for workers in
their sector. Ambika Soni, Minister of Tourism and
Culture of India, supported the idea. “Young people
want to learn and become skilled,” she said, noting
the need for training facilities in such fields as tourism,
hotel management and healthcare. There are
opportunities for investors, the minister concluded.
Figure 3: India Younger Than Many Asian Peers
Over half the population is younger than 25 years old

Singh in his Independence Day message to the nation 100%

21% 16% 9% 9% 7% 6% 6%
90 17% 16% 17%
21% 20%
in August this year. Singh announced the launch of a
Percentage of population, 2005

80 24%
29% 24% 22%
23%
Vocational Education Mission to open 1,600 industrial 70
60
28% 26%

24%
training institutes and polytechnics, 10,000 vocational 50
20% 19% 19% 20%

40 18%
schools and 50,000 skills development centres. Every 30 15%
18%
34% 35% 35%
15%
27%
year, he said, over 10 million students will receive 20 22% 23%
10 16%
vocational training, four times the number today. “We 0
Japan Australia South Korea China Indonesia Malaysia India
will seek the active help of the private sector in this
60+ years old 40-59 25-39 15-24 0-14
initiative so that they not only assist in the training, but
Source: Asian Demographics Ltd
also lend a hand in providing employment opportunities.”

9 | India Economic Summit

Inclusive Growth
“ If we can take opportunities to rural
India, there’s no reason why rural
India would wish to come like
“ The rising discontent of these have-nots has already
lemmings to urban India.
Mani Shankar Aiyar, Minister of Panchayati Raj and Youth
Affairs and Sports of India
There are two types of poor in India: the millions
packed into India’s growing urban slums and the even
greater number eking out life in its rural heartland. The
conundrum the country faces is that improving the
situation in the countryside will likely make matters
worse in the city.
“What do migrants want?” asked Anand G. Mahindra,
Vice-Chairman and Managing Director, Mahindra &
Mahindra, India; Co-Chair of the India Economic
Summit. “They want diversity of income, sanitation,
drinking water, power, roads. But even when they get
those, they will still want the life they see on their
televisions. Human beings like to live in cities; they
have done so for thousands of years.”
It is no secret that India needs to make its tremendous
economic growth more equitable, to spread it more
fairly among society – not just wealth, but
infrastructure and educational opportunities. Roughly
one quarter of Indians live below the poverty line, and
almost 70% of Indians live in rural areas, where
desperate farmers too often find solace in suicide.
10 | India Economic Summit
produced a political backlash. A radical Maoist
insurrection, Naxalism, has spread through some
states while, across the country, regional political
parties are growing in strength, upsetting the
dominance of national parties and forcing them to
cobble together coalition governments – like the one
now in power in New Delhi (see Figure 1).
While these new political parties offer an important
voice for those disenfranchised or displaced by
economic development, they often base their appeal
on caste and the personality of their leader, making
them divisive and raising concerns about corruption.
“They can muster big crowds but they are perceived
to be not very honourable,” said Arun Jaitley, Member
of Parliament and General Secretary, Bharatiya Janata
Party, India.
Figure 1: India's Parliamentary Parties
Parliamentary power now spread among more political parties
14
Average number of parties winning seats
12
for elections in 5 largest states
10
8
6
4
2
0
1985-89 1990-94 1995-99 2000-04 2005-07
For elections occurring during periods (parliamentary
terms not aligned across the five states)
Source: Election Commission of India
Ben J. Verwaayen, Chief Executive Officer, BT, United Kingdom; Co-Chair of the India Economic Summit;
Mani Shankar Aiyar, Minister of Panchayati Raj and Youth Affairs and Sports of India; Anand G. Mahindra, Vice-Chairman and Managing Director,
Mahindra & Mahindra, India; Co-Chair of the India Economic Summit and Mohamed A. Alabbar, Chairman, Emaar Properties, United Arab Emirates
listen to Nik Gowing, Main Presenter, BBC World, United Kingdom
“ What do migrants want? They want
diversity of income, sanitation, drinking
water, power, roads. But even when
they get those, they will still want the
life they see on their televisions. Human “ microfinance, providing rural development capital while
beings like to live in cities; they have
done so for thousands of years.
Anand G. Mahindra, Vice-Chairman and Managing Director,
Mahindra & Mahindra, India; Co-Chair of the India Economic
Summit
The proliferation of coalition governments that rely on
consensus decision-making could also have a
diminished ability to formulate and implement effective
policies. “Coalition government has its own
compulsions and its own limitations,” said Vilasrao
Deshmukh, Chief Minister of Maharashtra, India. “It
can delay decisions.”
To achieve a broader mandate and regain political
momentum, national parties need to boost regional
chapters to embrace local interests; likewise, regional
parties need to develop more robust national agendas.
Achieving inclusive economic growth is a priority for
India’s current government. Its latest budget includes
a 31% increase in spending on rural infrastructure –
15% of public infrastructure funds are expected to be
allocated to rural irrigation (see Figure 2) – and
broadens access by farmers to credit. In doing so, it is
helping to plug a gaping hole in funding for connecting
rural Indians to the mainstream economy.
The private sector is also making great strides through
freeing many rural people from the grip of
moneylenders. Instead, microfinance offers the rural
poor a way to leverage their own industry and thrift by
popularizing not only debt but also savings accounts.
“The bank account has become a status symbol in
the villages,” said M. R. Rao, Chief Operating Officer,
SKS Microfinance, India.
To realize the potential microfinance has tapped,
however, India needs greater deregulation. Existing rules,
for example, prevent bankers from tying up with
telecommunications companies to use established
cellular customer networks to distribute financial services.
Figure 2: Rural Infrastructure Investment
Rural irrigation expected to receive 15% of public infrastructure funds
1,500,000
Projected infrastructure investment, 2007-12 (Rs, crore)
Water supply/Sanitation
Electricity
1,250,000 Rural
Rural roads
Telecoms
1,000,000
750,000
Irrigation
Urban
500,000
250,000
0
Source: Government Planning Commission
11 | India Economic Summit
Palaniappan Chidambaram, Minister of Finance of India and Sunil Bharti Mittal, Chairman and Group Chief Executive Officer, Bharti Enterprises;
President, Confederation of Indian Industry (CII), India

Bankers concede, however, that their industry is also

guilty of holding back. Microfinance typically charges
relatively high interest rates, yet default rates among
micro-borrowers remain near zero, indicating what
“ The war for talent is such that we
have hundreds of millions of people
who cannot monetize their skills today
bankers say is excessive caution on the part of micro- because we haven’t connected them. “
lenders. Part of that caution, they say, stems from the It’s in everyone’s interest that we
fact that there is no credit bureau to keep track of unleash that capability and that talent.
rural borrowers, nor a reliable way – such as driving
licenses or birth certificates – to even identify them. Ben J. Verwaayen, Chief Executive Officer, BT, United
Kingdom; Co-Chair of the India Economic Summit
Some have called for the government to issue national
voter registration cards.

Bankers also have an important role to play in filling
the rural education gap, by teaching rural Indians the
basics of finance. To be sure, education often serves
as a politically correct panacea in debates about
poverty relief, but this year’s Summit broke from the
platitudes by outlining practical areas where education
can have an immediate impact. Improved vocational
training was singled out as a critical necessity for India
that would address its growing shortage of skilled
trades workers while recognizing that a higher degree
may not be a realistic aspiration for the bulk of the
country’s youth. Vocational training is an area,
moreover, where companies can get more immediate
returns on their investment, either by conducting their
own training, financing vocational programmes or
helping to develop curricula.
The good news for India is that its economy is largely
driven by domestic demand as opposed to exports.
The rural population, therefore, represents a critical
source of new labour for India’s services-led growth.
But solving the riddle of how to raise income levels in
the countryside without accelerating the rush to the
cities requires new thinking on what urbanization means.
In short, convincing rural Indians not to move to big
cities will require moving the city closer to them. “If we
can take opportunities to rural India, there’s no reason
why rural India would wish to come like lemmings to
urban India,” said Mani Shankar Aiyar, Minister of
Panchayati Raj and Youth Affairs and Sports of India.

12 | India Economic Summit


Industries that rely on rural inputs – food processing,
biofuel production and handicrafts – should move
closer to their production centres. Doing so will
encourage the creation of new urban centres, turning
villages into towns, and towns into small cities.
Technology can also be used to turn rural India into a
service centre for urban India in the same way that
India has become a service centre for the world. “The
war for talent is such that we have hundreds of
millions of people who cannot monetize their skills
today because we haven’t connected them,” said Ben
J. Verwaayen, Chief Executive Officer, BT, United
Kingdom; Co-Chair of the India Economic Summit.
“It’s in everyone’s interest that we unleash that
capability and that talent.”
Ultimately, it may take a more concerted push by
government to make this shift out of the cities
happen. Regulations and incentives may be needed to
encourage companies to “ruralize”. But it is clear that
India can no longer afford to let investment and
commerce remain confined within the city limits.
“Rural and urban are not separate; both are
connected, said Aiyar. “Until we see that, India will
become prosperous and Indians will remain poor.”
Ajit Gulabchand,
Chairman and Managing
Director, Hindustan
Construction Company,
India, speaking at the
SlimCity private session
Transformation – Sustainable
City Development and Inclusive
Urban Growth
At a session on the new SlimCity initiative of the World
Economic Forum, business leaders concluded that far-
reaching change is imperative in order for India’s cities to
achieve sustainable development and provide inclusive
growth for its citizens.
Accountability, coordination and resources were identified
as the three core areas in need of transformation.
Participants underlined the success of the Delhi Metro
development as a widely recognized example of the
overwhelming advantages of clear accountability in city
governance and transparent, coordinated public sector
project management. Participants highlighted the fact
that India possesses world-class resources, but its
economic and inclusive growth can only continue if
leaders from the public and private sectors rise to the
challenge of putting these resources in the hands of
those who need them.
The World Economic Forum’s SlimCity initiative is a global
partnership of leading city mayors and private sector
board executives, supported by the World Bank, the
International Energy Agency, UH-Habitat and ICLEI. The
initiative provides a risk-free, dynamic, multistakeholder
environment within which cities and the private sector
can pursue the development of energy and resource
efficiency in cities.
13 | India Economic Summit
Infrastructure Development
“ At the end of the day it’s easier
“
to build a road than it is to build
a democracy.
Nandan M. Nilekani, Executive Co-Chairman, Infosys
Technologies, India; Member of the Foundation Board of the
World Economic Forum
“The greatest challenge facing India is to build an
effective, efficient, scalable and sustainable
infrastructure,” noted Hector de J. Ruiz, Chairman of
the Board and Chief Executive Officer, AMD
(Advanced Micro Devices), USA; Co-Chair of the India
Economic Summit. As India’s economy continues its
high growth trajectory, its lack of infrastructure
becomes an ever-increasing concern.
To sustain and realize India’s growth potential, the
government of India has tabled ambitious plans to
boost infrastructure investment from historic levels of
3-4% of GDP to around 9% by 2012. The Planning
Commission’s current infrastructure investment
estimate within the 11th Five-Year Plan period stands
at US$ 490 billion. These plans do not include private
capital expenditure investments, which will lead to an
even greater demand for infrastructure-related
services and products. But many business people
harbour doubts that these plans will come to fruition
because of resource gaps faced by the public and
private sectors.
But the cost to the economy of not dramatically
improving infrastructure will be huge. Even though
India’s US$ 1 trillion economy is growing at 8-10% per
14 | India Economic Summit
annum, most analysts agree its lack of infrastructure
costs the economy between 1.5% and 2% of GDP
per annum. This equates to between US$ 95 billion
and US$ 134 billion lost in cumulative GDP by 2012.
The Indian government recognizes that it faces a
significant task. On one hand, public sector borrowing
restrictions and the lack of construction resources
mean it has to approach the private sector to help
fund and implement their plans. On the other hand,
the private sector faces significant resource and talent
issues of its own to cope with extra demand for
construction. The current five-year plan for
infrastructure sets aside an average of 30% (US$ 145
billion over five years) in PPPs and purely private
infrastructure-related projects. Telecommunications,
roads, ports and airports are the main targets for the
higher share of private funding, reflecting recent
significant steps taken by the government towards
embracing the private sector (see Figure 1).
Figure 1: Infrastructure Investment, by Sector
Private sector contribution expected to be 0% of irrigation funds, but nearly three-quarters of ports spending
100%
Private
infrastructure investment, 2007-12
75
Projected share of total
50
States
25
Centre
0
Irrigation
Water supply/
Sanitation
Railways
Electricity
Gas
Roads
Storage
Airports
Telecom
Ports
Source: Government Planning Commission
 Rajat M. Nag, Managing
Director-General, Asian
Development Bank,
Manila
The National Highways Authority of India has led the
way by successfully completing the Golden
Quadrilateral project through revenue sharing
arrangements with private contractors, introducing
model concession agreements as well as acquiring land
in a practical manner. The government did not interfere
when the telecommunications private sector innovated
by introducing leapfrogging technology to eliminate
the need to lay an expensive network of land cables.
Further, the government has “pre-approved” 11
international and domestic consultancies to advise on
infrastructure related projects to make the bidding
process simultaneously quicker and more transparent.
Additionally, it has authorized a viability-gap financing
mechanism for projects that do not meet purely
return-oriented targets, and recently set aside a US$
100 million fund to finance the exploration and design
of designated projects.
However, there are many areas that still lack clarity
and need attention. First among these is the lack of
“bankable” projects. General project funding
requirements are easy to determine, but private sector
players complain there are no clearly articulated projects
defined in a way that they can readily start executing.
Even if clearly defined projects existed, pricing and risk
management, especially between public and private
entities, will need more sophistication and should
move away from a traditional “cheapest supplier”
mindset. For example, two ultra-megawatt power
facilities have been negotiated on 40-year fixed price
contracts. While in the short term this may seem like a
great deal for the government, it has unwittingly
introduced unsustainable pricing and risk policies that
may deter future private players from bidding by such
risk distortion.
Indeed, more broadly, public and private entities need
to reflect on their respective abilities to manage and
control the variety of development, construction,
financial structuring and market risks, and allocate
them appropriately within PPP frameworks. And the
social consequential risks need addressing too,
especially regarding the resettlement and rehabilitation
of affected voting populations.
Complicating the picture further, cross-sector
government cooperation is not strong. Silo-led
developments, rather than integrated approaches,
lead to stunning examples of where nearly-built
structures, such as Bangalore’s international airport,
will have no quality roads leading to or from them
when they open.
But blame is too easily put on the government.
Consumer mindsets are also a problem. Central
government ministers as well as state chiefs are rightly
afraid to place a price on commodities seen as
essential to rural area welfare, for fear of a voting
backlash. Rural areas, in particular, expect water to be
provided without cost. Some experts have suggested
introducing a “water credits” system similar to carbon
credits to discover the price of increasingly scarce
potable supplies. But the Planning Commission does
not envisage much private participation in either
irrigation or water supply.
15 | India Economic Summit
“ The government regards infrastructure
as a critical constraint. It is our view
that the target we have set for the
economy which is to accelerate to an
average of 9% growth cannot be
“ Singapore, noted, “When you talk about skilled labour,
achieved if we fail to make efforts in
infrastructure.
Montek S. Ahluwalia, Deputy Chairman, Planning
Commission, India
Dispute resolution needs to be significantly streamlined.
Complex decision-making jurisdictions that are
constitutionally mandated within national, state and local
power seats add significant cost and time overruns to
infrastructure projects that cross boundaries and
encroach on several sovereignties. A properly functioning
and responsible arbitration mechanism is generally
absent with non-binding decisions and cases waylaid in
courts or automatically referred to the Supreme Court.
But even if mindsets shift significantly, will there be
sufficient capacity to execute? First, large engineering
and construction companies with mega-project
management capabilities in India are few in number.
The industry lacks not only size but also appropriately-
trained manpower. Of the 500,000 total engineering
graduates, only 5% are civil engineers. And even
those graduating are lured by higher wages in other
non-infrastructure-related sectors such as call centres or
jobs in the Middle East offering much higher salaries.
Especially acute is the shortage of talent at the
planning, design and maintenance levels – particularly
at the middle-management stage – which will
16 | India Economic Summit
inevitably lead to improperly planned projects risking
high alteration costs and poor quality execution. Thus,
the commonly held perception that India is an abundant
oasis of engineering talent is plainly false. As Chaly C.
K. Mah, Chief Executive Officer, Asia Pacific, Deloitte,
there is a massive shortage in India and the core is to
ensure you have a solid education system.”
Even though the engineering and construction
industry in India employs over 32 million people, it has
not until recently been recognized as an industry.
However proud India is of its centres of education
excellence, they only cater to a minute proportion of
the population. The rest of the “educable” workforce,
as N. K. Singh, Deputy Chairman, Planning
Commission, Government of Bihar, India, dubbed
them, are not emerging with the right skills, leaving
many enlightened companies to take the initiative to
train them “on the job” and issue skill certificates.
Government officials and private sector players agree
on one thing, though: comparisons between China
and India regarding infrastructure development should
stop, since the two systems are so unlike one another
when it comes to large-scale planning. Indian officials
like to portray China as a centralized polity that has no
problem or issue with moving large populations to make
way for critical infrastructure projects. Of course, this
view misses the underlying tensions between centre
and provinces. But one thing is clear, and put best by
Nandan M. Nilekani, Executive Co-Chairman, Infosys
Technologies, India; Member of the Foundation Board of
the World Economic Forum: “At the end of the day, it’s
easier to build a road than it is to build a democracy.”
Rajiv Lall, Managing Director and Chief Executive Officer, Infrastructure Development Finance Company, India; Montek S. Ahluwalia, Deputy
Chairman, Planning Commission, India; Rajat M. Nag, Managing Director-General, Asian Development Bank, Manila; Ajit Gulabchand, Chairman and
Managing Director, Hindustan Construction Company, India

Meeting India’s Infrastructure Challenge

The current state of the country’s infrastructure and the Building on the findings of the World Economic Forum’s
government’s new proposals to increase expenditure to Engineering & Construction: Scenarios to 2020,
9% of GDP by 2012 (see chart) formed the basis of a participants noted that the central government has
workshop organized by the World Economic Forum made a lot of progress on changing mindsets by
and the Confederation for Indian Industry (CII) ahead of actively involving the private sector and making the
the India Economic Summit. The private meeting bidding process for projects more transparent.
comprised a broad array of stakeholder groups Financing for projects in general did not seem to be an
including government officials, private sector players, issue, but participants called for greater depth in
global engineering firms, consultants, financial private sector bonds to match project tenures.
intermediaries and multilateral organizations, including
the World Bank. Private sector participants also called for more clarity
on the range of detailed projects envisaged by the
Infrastructure Spending government to assist in their planning and more detail
Overall infrastructure investment expected to increase from regarding the mechanism of public-private
$201 billion in the 10th plan, to $492 billion in the 11th
partnerships. They also highlighted the fact that
Water supply/
Sanitation

Storage
Airports

different sectors should learn from others in terms of

Ports

Gas

Electricity Roads\Bridges Telecom Railways Irrigation

best practice. In addition, they commented that, given
11th plan
(FY07-12) the growing number of options for investment
opportunities globally, India needs to focus on making it
easier for multinational companies to work on
infrastructure projects.
10th plan
(FY02-07)

$0 100 200 300 400 $500 Finally, the group mandated that the Forum and CII
Anticipated investment (US$, billions)
produce a series of case studies highlighting
Source: Government Planning Commission; Lehman Brothers
infrastructure solutions already being implemented
around the country. This, they said, would help share
best practices within India and shed light on the Indian
infrastructure situation for global companies.

17 | India Economic Summit

Risk Management
“ The real economy, including
manufacturing, is what is important and
“
the appreciation of the rupee is making
that economy suffer.
Rahul Bajaj, Chairman, Bajaj Auto; Member of Parliament, India
India’s boom is replete with risk. The World Economic
Forum’s India@Risk 2007 report outlined just six of the
major global risks to the country, including the loss of
freshwater, economic shocks and oil peaks, the
economic impact of demographics, globalization vs
protectionism, climate change and infectious diseases.
Most people associate risks with jeopardy, but risk is
an essential ingredient in success. “Risk is not identical
to threat,” explained Sean M. Cleary, Chairman,
Strategic Concepts, South Africa. “Risk lies on the
cusp between threat and opportunity. The challenge
when addressing risk is to turn it into an opportunity.”
To do that, it is important not to see India’s problems
as insoluble, nor to take India’s success as
preordained. Indeed, talk of India as a new economic
superpower may be premature, warned Palaniappan
Chidambaram, Minister of Finance of India. He added
that a superpower is a magnet for knowledge, a
financial centre and has access to abundant natural
resources. India has yet to secure these things and so
must avoid hubris or chauvinism.
India must not, therefore, let economic success be
narrowly defined by the middle class ideal as seen on
television. Between peasantry and prosperity, India
18 | India Economic Summit
needs to fill the burgeoning demand for skilled labour.
“The concept of dignity of labour has to be
established to a much greater degree than we have,”
said Anjali Raina, Country Training Director, Citibank,
India. And as large and complex as it is, India cannot
afford to turn its back on the world’s problems – they
have historically had a way of pulling India in.
HIV/AIDS is an example of an imported problem that
will require Indian solutions to solve. With at least 5.7
million HIV-positive people, India last year overtook
South Africa as the country with the largest number of
people infected with the virus that causes AIDS.
Global warming, meanwhile, is exacerbating the rapid
decline in India’s freshwater supplies (see Figure 1). By
2025, India’s per capita supply of renewable water is
projected to drop to only a quarter of what it was in
1975. India, however, receives more rainfall than it can
manage, which often results in flooding. Harnessing
those floodwaters will require that India build dams
Figure 1: Access to Renewable Water Dropping
2025 per capita water supply in India is expected
to be less than half the supply in 1975
3,500
Renewable water per capita (cubic metres)
3,000
2,500
2,000
1,500
1,000
500
0
1975 2000 2025
(medium estimate)
Source: United Nations Food and Agricultural Organisation
“ Along with national security, the three
pillars of security – human, economic
and physical – need to be raised to
bring the economy to a position where
the challenges can be met. The risks
were identified because of their
“
interconnectedness, which magnifies
their impact.
Shamsher S. Mehta, Director-General, Confederation of Indian
Industry (CII), India
and reservoirs, as China has built infrastructure such
as the Three Gorges dam. “India must summon that
kind of determination and will to execute the projects,”
said Chidambaram.
Many worry that the government has adopted a short-
sighted approach to the environment, however,
rejecting calls to cap emissions growth despite
abundant evidence that India is choking on its
pollution. While critics agree with India that the West
must lead the world in cutting emissions, many say
India shouldn’t use development as an excuse for
repeating the West’s mistakes. Instead, said Stuart
Popham, Senior Partner, Clifford Chance, United
Kingdom, India has an opportunity to leapfrog ahead,
“and formulate regulations that might be the template
for the rest of the world”.
Protectionism, both at home and abroad, is another
looming risk to India’s growth. India has its own
opponents to free trade and capital flows, and many
Indians who are afraid of displacement want to block
the creation of special economic zones that stand to
boost investment and create centres of job growth
outside major cities. In the United States, a growing
number of people see the rise of India and China as a
threat to their own prosperity.
India is fortunate in that, relative to export-dependent
East Asia, it is somewhat insulated from the market
turmoil emanating from the troubled US housing
market. India relies largely on coal for its energy, and
its economic growth is driven primarily by domestic
demand rather than exports.
Nonetheless, India relies on imports for as much as
80% of its fuel needs and is trying to substitute coal
with cleaner, but imported, natural gas. Rising oil
prices have repercussions for India, and India has
room to play a more assertive diplomatic role where
its energy supply is concerned.
The prospect of a US economic slowdown next year,
while of greater concern to East Asia’s exporters, also
has a potentially negative impact for India. Already this
year, the US dollar has fallen dramatically against the
rupee, making it harder for Indian exporters to
compete overseas and luring speculative investments
into India, which is in turn pushing the rupee up even
19 | India Economic Summit
India@Risk: Six Global Challenges Ahead session: Robert D. Blackwill, President, Barbour Griffith and Rogers International, USA; Chaly C. K. Mah,
Chief Executive Officer, Asia Pacific, Deloitte, Singapore; Shekhar Dutt, Deputy National Security Adviser, National Security Council (NSC), India;
Madeleine K. Albright, President, The Albright Group, USA; Stuart Popham, Senior Partner, Clifford Chance, United Kingdom and Shamsher S. Mehta,
Director-General, Confederation of Indian Industry (CII), India

Business Leaders in India Take on
the Climate Change Challenge
Business leaders sat down at the India Economic Summit
to discuss the climate change challenge. The high number
and level of participants during the programme’s two
faster (see Figure 2). Normally a rising currency helps
keep a lid on inflation but, in India, the flood of cash
into the country and rapid growth are combining to
accelerate price increases.
Figure 2: Value of the Rupee

sessions on the topic showed that there is rising business The rupee's relative value changing as the dollar-euro rate evolves

concern in India about the issue. 140

Appreciation
Relative value of the rupee (100=January 2002)

120
Participants were given expert overviews of the scale and Against US$

urgency of the climate change problem facing the

100

subcontinent. As well as the adaptation challenge – which,

if not met, has huge potential to stunt future national growth 80
Against
Depreciation

– there are predictions of a seven-fold increase in energy

consumption in India by 2030, 60-70% of which will be 60
1/1/2002

7/1/2002

1/1/2003

7/1/2003

1/1/2004

7/1/2004

1/1/2005

7/1/2005

1/1/2006

7/1/2006

1/1/2007

7/1/2007

provided by coal. India will soon become a major emitter of

greenhouse gases and will face increasing international Source: Reuters

pressure to reduce emissions levels.

Urgent action is required to avoid the tipping point that
scientists say will be reached if fast-growing countries emit
as rapidly as others have in the past. Business participants
stated that the case for action in India is simple and
undeniable, and they are willing to step forward if
government hesitates. Participants expressed their view
that, irrespective of the United Nations Climate Change
Conference 2007 outcome, the Indian business community
should show leadership and start taking the first steps
forward.
Some Indian industrialists suggested capital controls
to help stem the inflow of portfolio investments.
“Something has to be put there – not for money going
out but for money coming in,” said Rahul Bajaj,
Chairman, Bajaj Auto; Member of Parliament, India.
Despite the experiences of Malaysia and Chile,
economists warn that capital controls would be a
mistake. The strong rupee lowers the cost of importing
much-needed capital goods, which can in turn be used
to boost productivity. India’s capital markets need to
be liberalized, they say, so they grow and become less
volatile. But until that happens, Indian companies will
have to get used to bigger swings in the rupee’s value.

20 | India Economic Summit


A longer-term risk to Indian economic growth is its
rising population of new job entrants. With half of the
population under 25, the Indian working-age
population is expected to rise by more than 10% to
762 million by 2012. The added savings and
consumption will propel the Indian economy even
faster.
With most of these young people counted among the
rural poor, however, the worry is that limited access to
education has left most of them lacking marketable
skills. That could leave India short of skilled workers,
but teeming with restive unemployed.
The government aims to broaden access to primary
and secondary education, and increase college
enrolment. But economists and executives stress that
it is the quality, not just quantity, of education that
counts. They feel that too many colleges are
producing under-qualified graduates. At the same
time, many college graduates are often over-qualified
for service sector jobs such as plumbing and electrical
work.
Vocational training is an area into which companies
can invest directly and reap rewards in a relatively
short time. If India can manage to train more of its
poor, rural young people to take up skilled jobs, it will
be able to fill not only its own need for labour, but find
more jobs to meet the rising shortage of skilled
workers in nations with ageing populations overseas.
India@Risk
India is at an inflection point – while the prospect of
sustaining 8-10% growth is achievable, it is not a given,
according to a report released by the World Economic
Forum's Global Risk Network and the Confederation of
Indian Industry (CII). Decision-makers cannot assume that
tomorrow’s growth story in India will read like today’s. The
economic fundamentals are in place, but political dynamics
and the scope of structural reforms are more likely to shape
the next chapter, according to the India@Risk 2007 report
released at the India Economic Summit.
In the short term, three economic threats loom large: a
rising rupee, an oil price shock and a collapse of asset
prices (especially property or shares) triggered by a global
re-appreciation of risk. In the medium and long term, risk
mitigation should focus on building increased resilience via
continued investment in basic infrastructure and education,
in order to reap the demographic dividend of a young,
aspirational and growing populace.
With more than 71 million new jobs required over the next
five years, inclusive growth is an imperative for India.
Another key priority highlighted in the report is water – per
capita supply in 2025 is expected to be less than half of
that in 1975 (see chart). There is no doubt that the current
water situation in India will get much worse unless different
approaches are taken. India has enough precipitation but
not enough storage in terms of dams and reservoirs; it
needs improved groundwater recharge and should explore
opportunities for further public-private partnerships.
Other risks that could derail India’s future growth prospects
include climate change, infectious diseases and the
potential backlash against globalization (i.e. rising
protectionism). “Some of these risks are beyond India’s
control, including exogenous economic crises and an oil
price shock,” said Palaniappan Chidambaram, Minister of
Finance of India, adding, “Other risks are endogenous and
can be overcome – for example, risks associated with
demographics and the lack of freshwater.”
The report concludes that for India – a country
characterized by huge opportunities and ever-increasing
regional and global interdependence – the imperative is for
collective action to mitigate these shared risks. For the full
report go to: http://www.weforum.org/pdf/grn/indiarisk.pdf
Access to Renewable Water Dropping
2025 per capita water supply in India is expected
to be less than half the supply in 1975
3,500
Renewable water per capita (cubic metres)
3,000
2,500
2,000
1,500
1,000
500
0
1975 2000 2025
(medium estimate)
Source: United Nations Food and Agricultural Organisation
21 | India Economic Summit
Building Centres of Excellence in
the WorkSpace
Participants at the India Economic Summit had the opportunity to take part in four WorkSpace
sessions, which focused on different issues important to India’s future and sought a uniquely Indian
perspective in addressing them.
Innovative Models: Expanding
India’s Competitive Advantage
Participants looked at various innovative models that
are transforming India into a centre of excellence.
These models were explored across sectors,
industries and business domains to determine how
they could be replicated. Participants split into groups
from various industries, where they co-designed ideal
3-D models that would enable innovation in any context.
The groups came away with insight into how to
encourage an environment conducive to innovative
thinking. All agreed that innovative ideas and
processes can often be applied from one industry to
another and that industries can learn from one
another. The concept of innovation may by necessity
mean that organizations need to develop new
business models to remain relevant. This is particularly
important for top-down institutions. Innovation is not
only about inspiration; it goes beyond new products
and services and should be viewed as a strategic
issue. Trying something new may mean making
mistakes, but should also mean being willing to invest
in making mistakes to get to something really good.
Many participants concluded that innovation could be
viewed as an excursion: taking a few steps away from
their comfort zone and then returning full circle to their
issue or challenge with new insights and solutions.
22 | India Economic Summit
Getting Ahead of
the Climate Change Curve
Experts and business leaders in this session looked at
climate change from a sector perspective to identify
cross-sector risks, explore leading practices and build
systemic solutions to this very relevant global issue.
Participants divided into groups to look at risks and
identify leading practices to start defining concrete
actions they could take immediately. All concurred that
India has a large role to play in rolling back the effects
of climate change.
Generally, the participants identified innovation as a
key to tackling the effects of climate change, as
drastic solutions are needed to ensure a sustainable
future. Participants noted that knowing the carbon
footprint of a business’s supply chain is an important
step in learning where to make changes to reduce the
footprint to zero. Energy efficiency was also flagged as
an important priority for businesses to make, including
investing in green technologies and products.
Participants further highlighted the significance of
advocating national and international frameworks such
as market mechanisms to price carbon; a “greener”
approach to urban and rural design; and a
consumption tax, as opposed to an income tax.
Excellence Despite the Odds:
The Social Entrepreneur in India
Building on the World Economic Forum’s and the
Schwab Foundation for Social Entrepreneurship’s
focus on social entrepreneurship, this session
explored the concept of social entrepreneurship and
how it could be relevant and applicable in an Indian
context. Participants were greeted in small groups by
a number of entrepreneurs from India and abroad,
who explained how they became socially engaged.
Groups then broke out again to design their own
ventures to address an issue relevant to India’s future.
Nearly all groups agreed that effective social
entrepreneurship is about scale. One person acting
alone is a good place to start, but has a small impact;
a larger group scales up the results and raises
awareness about an issue. Further, scalability and
sustainability require easy access to capital and a
secure operating environment for socially-minded
projects. One group coined the term social incubator
– referring to the environment that fosters interest,
investment and commitment to social projects.
Moreover, social entrepreneurs should leverage
collective experience by collaborating with like-minded
individuals and companies. Companies should be
approached with a value proposition to leverage their
strengths, help them expand into new business
markets and address gaps in Indian society, such as
access to clean water or education for rural migrating
workers. Entrepreneurs by nature need to think
creatively. For example, one group of participants
sought to address the shortage of cooking fuel for the
rural poor by creating a company producing cooking
gas from animal and human waste. Nearly all
participants thought that, if a socially-minded venture
is not a good business model, it is not worth doing.
Social entrepreneurship is not only about doing good
for good’s sake, they agreed.
Unlocking the DNA of
an Indian Multinational
This WorkSpace session focused on exploring the
elements that make companies successful.
Participants studied various cases, such as the rise
and decline of empires, the unfair competitive
advantage of some economies, the viral nature of the
“Facebook” phenomenon, and the concept/lifestyle
branding of enterprises such as Manchester United to
review what factors and unique features make them
successful – or unsuccessful. Participants examined
what elements might be transferable to Indian
companies, then identified features that could
contribute to Indian companies’ international growth.
Under the categories of brand, culture, cost
effectiveness, growth and innovation, participants
found a number of positive factors unique to India.
Culturally, Indians are positive about the future, learn
quickly from others and adapt well to change. Their
success in the last century is a testament to these
cultural characteristics, which have allowed India to
thrive in the face of challenges. The brand India itself
is a positive force for international growth. Instead of
focusing on low costs, India should develop a high
value proposition in niche markets. One such niche
market identified by one group is the wellness market,
to which India’s cultural focus on holistic living,
spiritualism, yoga and Ayurveda is highly valuable and
marketable. Participants recommended that Indian
companies operate with a view to sustainability by
increasing brand awareness, expanding country and
local knowledge and by cultivating talent to lead
globally. Indian companies are smart to look at
growth, while recognizing their limits. Indian
companies should identify their competitive
advantages and exploit them, scale up intelligently and
rapidly, and develop new models and concepts.
23 | India Economic Summit
Acknowledgements

The World Economic Forum would like to thank the officers and staff of the Confederation of Indian
Industry for their partnership in the India Economic Summit.

The World Economic Forum wishes to recognize the support of the following companies as Partners of
the India Economic Summit:

Strategic Partners Morgan Stanley

Nestlé
ABN AMRO Bank NYSE Euronext
Accenture Olayan Group
AMD PepsiCo
American International Group (AIG) Reliance Industries
Apax Partners Reuters
Audi Standard Chartered Bank
Avaya Swiss Re
Bahrain Economic Development Board UPS
Bain & Company VTB Bank
Bombardier
The Boston Consulting Group
BP Summit Supporters
BT
CA Apollo Tyres
Citi Capgemini
Clifford Chance Department of Industrial Policy and Promotion,
The Coca-Cola Company Ministry of Commerce and Industry of India
Credit Suisse DLF
Deloitte Emaar Properties
Deutsche Bank Financial Technologies India
Deutsche Post World Net Rakindo Developers
DuPont
Ernst & Young
Kudelski Group Service Providers
Lehman Brothers
Manpower NDTV
METRO Group Taj Palace Hotel
Microsoft Corporation

The World Economic Forum would also like to thank Sheila Dikshit, Chief Minister of the National Capital
Territory of Delhi, and RAK Investment Authority, Government of Ras Al Khaimah, United Arab Emirates,
for hosting activities during the India Economic Summit.

24 | India Economic Summit

25 | India Economic Summit
Contributors

W. Lee Howell is Senior Director, Head of Asia and Global Agenda at the Forum. Sushant Palakurthi Rao is Associate
Director, Deputy Head of Asia at the Forum. The India Economic Summit was under their direct responsibility with
Chantal Adamson, Senior Event Manager and Summit Coordinator, and Shruti Bhatia, Senior Manager, India and
South Asia.

Lena Hagelstein, Global Agenda, Programme Manager Geopolitics, and Global Leadership Fellow, World Economic
Forum; Vidhi Tambiah, Associate Director, Content Development, World Economic Forum; and Samantha Tonkin,
Senior Media Manager, World Economic Forum, worked with Wayne Arnold and Alejandro Reyes, report writers
tasked by the World Economic Forum to produce this report.

The World Economic Forum would like to express its appreciation to the summary writers for their work at the
Summit. Session summaries are available at: www.weforum.org/india/summaries2007

Editing: Janet Hill, Editor, and Fabienne Stassen Fleming, Senior Editor

Design: Kamal Kimaoui, Associate Principal, Production and Design

Layout: Kristina Golubic, Graphic Designer

Photographs: Prabhas Roy

Special thanks to PricewaterhouseCoopers for their help in preparing data and statistics underpinning this report.

26 | India Economic Summit

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