$5 trn. Economy of India by 2024 – Integrated approach beyond numbers
$5 trillion Economy by 2024 is good to have ASPIRATION, great to chase TARGET and desirable GOAL POST, which will hopefully, keep alive the achievement orientation of political leaders, government officers & business leaders. This milestone can only be achieved through collective efforts of 1.3bn people of India and their leaders. It is good thing to talk about the math of $5 trn and assign percentage growth rates for sectors of Industry in various states of India. But equally important is the QUALITATIVE ASPECT OF GOVERNANCE & MANAGEMENT. What do I mean when I say QUALITATIVE ASPECT OF GOVERNANCE?
The three BIG ideas for taking ‘$5 Trillion Economy – Vision to Reality’
If we adopt these three ideas in an integrated manner, not only $5 trillion economy is a possibility by 2024 but even $ 10 trn is a possibility by 2030.
First BIG idea - Trinity of Leadership:
1. Public leadership (include Political leaders & Govt. officers – Policy makers)
2. Business leaders (include Boards/ Management/ Institutional Investors / Asset Managers.
3. Civil Society leaders – which is also called Third sector
What can each of these leaders do?
Expectations from Public leaders (include Political leaders & Govt. officers – Policy makers):
As Kofi Annan - Former Secretary General of UN says, “Good Governance is perhaps the single most important factor in eradicating poverty and promoting development.” We need inclusive growth. We are 1.3bn people in India; millions of them need to be pulled out of the poverty line. Inequalities are becoming unmanageable. (1% of World’s Super rich - Oxfam Report.)
There are Six Global Governance Indicators, as per the WGI, research produced by Daniel Kaufmann, Natural Resource Governance Institute (NRGI) and Brookings Institution, Aart Kraay, World Bank Development Research Group. They have tracked 200 countries From 1996–2019. These six dimensions of governance are:
In addition, World Economic Forum in its Global Competitiveness Report 2019, has mentioned about 12 Indicators to improve any country’s Competitiveness, they are: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability.
Our political leaders, Govt. officers & Policy makers need to give a hard look at the above six dimensions of governance and focus on 12 indicators above, if we want to achieve $5 trn economy by 2024.
Expectations from Business leaders: Adopt high standards of corporate governance and ethical business practices. It is in the enlightened self-interest of businesses that they become responsible and think Stewardship, Environmental, Social & Financial Stewardship. Here is my favorite quote and there is enough empirical research supporting this “Socially responsible businesses, who provide safe products & services and respect mother earth, are rewarded by all the stakeholders, handsomely – employees & customers reward them with their loyalty, suppliers reward them with priority status, regulators & society reward them with respect. As Ms. Lise Kingo - Executive Director, UN Global Compact says, “The idea of business as an agent of change and a purveyor of positive values is gaining traction and legitimacy around the world.”
Expectations from Civil Society leaders: Civil Society also referred as ‘Third Sector’. NGOs, labour unions, charities and foundations - civil society is more than the sum of its parts. Civil Society leaders should galvanize citizens by use of technology, social media platforms and formats such as video and podcasts to raise awareness about societal causes. They should try and influence policies through advocacy to ensure that policies are inclusive, which should lead to sustainable development of society. For example Some Civil Society organizations have developed new partnerships with UNICEF, to create bot software to engage with young people on social media platforms. UNICEF’s ‘U-Report’ bot is a free SMS social monitoring tool. It assesses how young people feel about important issues based on responses to SMS polls and alerts.
e.g. without the Responsible behaviour of civil society, Indore would never have become ‘CLEANEST CITY’ of India – 3 years in a row! This is glaring example of Trinity of Leadership. All three leaders in Indore worked in an integrated manner to make Indore as ‘CLEANEST CITY’ of India.
Second BIG idea - Re-Think Capitalism: Most forums around the world have come to a conclusion that Capitalism in its current form has ‘failed’ us. Thus we need to rethink Capitalism. Different business leaders have talked about bringing different kinds of change in capitalism, but very little has happened. Sample the following versions of capitalism:
Capitalism is desperately in need of a modifier! Business leaders in India have an opportunity to become ‘Modifiers of Capitalism’ and raise the bar for Business Responsibility – Stewardship & Good Corporate Governance. Environmental, social and economic agendas can no longer be pursued separately and in parallel: they must be merged into a single sustainable and inclusive growth agenda.
The world has come a long way since the view of the Nobel laureate economist Milton Friedman in 1970 “There is one and only one social responsibility of business, to “engage in activities designed to increase its profits.” Companies must obey the law. But beyond that, their job is to make money for shareholders. As recently as 19 th Aug. 2019, Business Round Table Statement signed by 181 top CEOs of America redefined ‘Purpose of the Corporation’ and announced a new purpose for the corporation. The statement is 300 words long; shareholders aren’t mentioned until the 250 th word. There is a noticeable shift from ‘Shareholder’ primacy to ‘Stakeholder’ primacy.
Third BIG idea - India’s opportunity to play a leading role with SDGs:
India has an opportunity to play a leading role in speeding up the achievement of Sustainable Development Goals by 2030. As Economic Outlook by World Bank mentions “India’s ability to achieve rapid, sustainable development will have profound implications for the world. India’s success will be central to the world’s collective ambition of ending extreme poverty and promoting shared prosperity, as well as for achieving the Sustainable Development Goals (SDGs) by 2030.”
As Mr. Ban Ki-Moon - Former UN Secretary General says “Business is a vital partner in achieving the SDGs. Companies can contribute through their core activities, and we ask companies everywhere to assess their impact, set ambitious goals and communicate transparently about the results.”
Thus in conclusion, when trinity of leadership work in an integrated manner, and think beyond numbers and focus on qualitative aspects of governance like, voice & accountability, absence of Violence, government effectiveness, regulatory quality, rule of Law & control of corruption, $5 trn economy will become a reality, its only a matter of time. (1264 words)_____________________________________________________________________________________________
*Author is Chairman, Mahendra & Young Knowledge Foundation Chairman - Fino Payment Bank and Vice Chairman - Global Advisory Board, Asian Centre for Corporate Governance & Sustainability.