Sizing up India’s economic growth
TEXT OF INTERVIEW
Kai Ryssdal: President Obama has really been making the rounds over in London. His schedule today was packed with meetings. Both the actual G-20 summit and one-on-one’s with a handful of other leaders, including Indian Prime Minister Manmohan Singh. Their conversation turned mostly on geopolitics — Pakistan and nuclear weapons. But over the past 20 years or so, the Indian economy has become a force of its own. Nandan Nilekani is the co-chairman of Infosys, that’s one of the big Indian IT companies. He’s also the author of a new book called “Imagining India.” And when we spoke I asked him how India has been doing so far in this global recession.
NANDAN NILEKANI: India, in particular, while it is affected by this downturn, it really doesn’t have some of the fundamental challenges of problems in the banking system or poor regulation. In some sense India has the potential to recover earlier than many countries in the world once the recovery starts.
Ryssdal: We haven’t really talked about the political side of the Indian economy. You live in a very rough neighborhood of the world. Geopolitics is a big factor in India and in the U.S.-Indian relationship. Is that an issue in how quickly or fully the Indian economy might develop?
NILEKANI: Certainly, I think we do have challenges on some of our borders, and it has the potential to disrupt what is happening in India. But fundamentally I think the inherent economic strength of the billion people, the demographic dividend, the huge diversity of entrepreneurs that we have, the democracy, all these things I believe are truly compelling arguments as to why once the crisis is over in the world, India will go back to very decent rates of growth.
Ryssdal: Interesting phrase, demographic dividend. Because, you know, there is a certain demographic burden that comes with India and a billion people in various states of social development. But another phrase for it might be human capital, right?
NILEKANI: Yes, in fact, I think the big change in India is that over the last 40 years we’ve gone from seeing a population as a burden to population as human capital. And the demographic dividend in particular arises because population growth rates have slowed down. And so we have a huge hump of people in the working age of 15-65, which is typically when economies grow very rapidly.
Ryssdal: Is it something specific to technology that has made the Indian economy as powerful as it is? I mean, is there big manufacturing, and do you rely on those kinds of things as well
NILEKANI: Well, technology has been an important part. It’s about a $50-billion industry in a trillion-dollar economy. But more importantly, the technology was the first sector to take off after the economic reforms, and therefore, in some sense, provided a role model for other industries. So you’re seeing a lot of innovation now in manufacturing, and hopefully soon, in agriculture too.
Ryssdal: That rise in the Indian-technology sector, though, came at the expense of a little bit of political blowback here in the United States. I mean there were problems and worries about call centers being outsourced — and if you had a computer problem you never knew if you were talking to somebody in New Delhi or in Michigan. I mean, it was a very big issue here.
NILEKANI: Clearly outsourcing is there. I guess in an environment where the economy grows slowly and there are less jobs around, it has a potential to become a political issue. But I do believe that it is very much required. It’s part of free trade in a global economy. India imports, for example, billions of dollars of computers, of mobile phones, of planes from countries like the U.S. So really I think if we keep both economies going, it’s a two-way street.
Ryssdal: Let me ask you to try to put yourself in the mind of the American reader of this book. It’s called “Imagining India.” And I’m wondering what you think American readers currently imagine India as.
NILEKANI: There is a lot of sort of ambiguity about what India is. And my purpose in writing this book for the global reader is to really explain India’s contradictions and complexities. At the same time paint a picture of how India can do well. And I think India doing well is very important for the U.S. Because this is one-sixth of humanity. The future of the world in terms of global warming will be decided by how countries like India and China embrace the post-carbon economy. So really there are many, many dimensions of what’s happening in India and its future.
Ryssdal: Nandan Nilekani is the co-chairman of Infosys Technologies, one of India’s leading information technology firms. His new book is called “Imagining India.” Mr. Nilekani, thanks so much for your time.
NILEKANI: Thank you.
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