India Needs Better Growth, Not Just More Growth

Navi Radjou, Executive Director of the Centre for India & Global Business at Judge Business School, University of Cambridge, is blogging from the India Economic Summit, held in New Delhi 14-16 November 2010.

by Navi Radjou (@NaviRadjou)

Yesterday I attended the opening day of WEF's India Economic Summit 2010 and the key takeaway was: "Quality is more important than quantity". Let me elaborate.

Indian policy-makers and CEOs are fond of throwing around optimistic statistics and projections such as "Foreign direct investments will far exceed $100 billion in 2010" and "By 2020, India will account for 25% of the global workforce".
 
While quantitatively-speaking these numbers look impressive, what matters is the intrinsic quality of what these numbers represent.

For instance, many of yesterday's speakers – from Bharti's Sunil Mittal to CII's Hari Bhartia – acknowleged that India's so-called demographic dividend (half of India's population is below 25) could easily turn into a demographic disaster unless India's young workforce is properly skilled and employable by global standards. Unfortunately this is far from being the case today: 70% of India's 509 million-strong working population has not received a primary education and only 11% of those aged 17-23 receive a higher education.

Similarly, Harvard University Professor Gita Gopinath explained that while India is well positioned to attract hundreds of billions of foreign investment in coming decade, what matters is the quality of these investments: long-term FDI investments in infrastructure, manufacturing, education are better than speculative short-term ones (which caused the 1997 Asian economic meltdown!)

I can't agree more. For India's growth story to be sustainable, it needs to focus on driving high-quality growth, not just more growth for the sake of growth. 

This message was echoed by ICT (Information and Communication Technology) industry members who participated in a private pre-Summit workshop I moderated yesterday morning. In 2010, India is expected to export software and services worth $60 billion. Yet the country scores very poorly in WEF's Networked Readiness Index 2009-2010 due to poor usage of ICT at the individual level. The workshop attendees all agreed that India will never become a knowledge superpower unless it first develops a strong domestic IT market.

Let's hope that India's future growth will be equitable, inclusive, and of higher quality.