In Conversation with Gurcharan Das
In an interaction with Gurcharan Das, author, commentator and former CEO of Procter & Gamble India, he shares his view on topics ranging from the state of the Indian economy, to the performance of the current government to qualities he saw in himself that made him a successful and best selling author.
“Why should it take 15 years to get justice in the courts? Why is it so difficult to file an FIR to the police?”
“We overvalue intelligence but leadership is much more about determination.”
You sound optimistic about the manufacturing sector in India although its contribution is only about 16% of GDP.
I think because we are so low we have greater potential to catch up. No country, no major country has a manufacturing share as low as ours, even our competitor nations, emerging markets, are around 30% or 30% plus and India is 16%. I think about the fact that we still have a demand for labor-intensive small shops. They are manufacturing because they are kind of workshops. There was a survey which shows that actually manufacturing jobs grew at 5.6% between 2002 to 2012. The proper word is organized sector jobs. Now they may have been informal jobs, informal meaning people on contracts – that’s how India Inc. gets around labor laws. The fact is that organized sector jobs grew at 5.1% but the labor market grew at 1.6% per year. So there was a manufacturing push. The ideal kind of jobs we should get, are the ones that are leaving China. There is potential in defense and railways and e-commerce and these things will come but the key thing is to cut the red tape and Prime Minister Modi has given that job to Amitabh Kant whose group is trying to very hard to but they are getting push back.
What more can the current government do in this regard?
Well to start with the Prime Minister could personally speak to BJP Chief Ministers and push them to cut out the red tape and become more competitive. Also focus on the ease of doing business. They are doing a survey in this regard that will be much deeper than the World Bank study. And they are going to then have a conference of all the chief ministers and Prime Minister Modi is going to then declare the winner regarding which state has the best ease of doing business.
Do you think this initiative by the government will be successful?
Well it depends in to how much of the messy detail of day-to-day implementation the leader gets into and Prime Minister Modi can because he knows how to break boundaries. What will take others in his team two to three months to do, he can do it with one phone call. A good leader is not just one who proclaims strategy. I personally think that these campaigns Swachch Bharat, Make in India, are all related. Besides we elected Modi for three reasons. We elected him to stop inflation, second to stop corruption, and third to bring jobs. Now he has achieved 2/3, the first two, I mean there has been no corruption scandal in the 12 months and inflation has come under control. Third is a much tougher thing, so he has to really pay more attention to this.
How would you rank Prime Minister Modi on things that are essential to India like education?
Yes those are concern areas and I personally think that they need to have more balance in the government but clearly the economy has turned around, it is in the process of recovery. At the same time education and health and agriculture are being neglected. The job in education is clearly quality. The achievement of the last 20 years is that we now have children in school. So the quantity issue is gone. The Right to Education act should have been called the Right to Quality Education. The problem with that law was precisely that there was no talk about outcomes. It is all about inputs without even willing to measure outcomes. Anyway it is not an easy area because the delivery is by the States.
What about agriculture?
It has been a bad year for agriculture. State level reforms are needed here too, just open up distribution, allow farmers to sell across the state borders, create a market. The first priority should be a system of delivery of benefits. All indications now are that we are going to move to an Aadhar link, a Jan-Dhan Yojana bank account link, and mobile phone link for efficiency and a whole safety net. Jan-Dhan Yojana is one of the most impressive feats of implementation and how fast Aadhar is moving and I think we are very close now at a billion phones. So a billion Aadhar numbers, billion cell phones, and a billion Jan-Dhan Yojana or at least family accounts because there won’t be a billion people means all families will be covered. This can really revolutionize all the food corporation corruption. The procurement, the eating of the food that is stored by rats, all that will be left behind. Only a very small buffer slot for emergencies will be kept. A mountain of food and drinks will not need to be kept which has been such a wasteful exercise. Nobody calculates the inventory carrying cost of 60 million tons of grains plus all the corruption so to speak.
What’s your view on the structural problems that still persist in India?
The Indian economy at the moment is in a positive position; demographics are favoring India; high savings rate, all these things are in our favor. The real challenges are institutional. Why should it take 15 years to get justice in the courts for example?
Why is it so difficult to file an FIR to the police? Why is medical care such a mess and why is the government not investing in it? Why are government institutions so slothful? The fact that one out of four schoolteachers don’t show up in classrooms to teach shows that the problem is partly an institutional problem. If you ensure assessments, if you ensure that they are punished, then you will find an improvement.
On a slightly different vein, what’s your view on leadership?
We overvalue intelligence but leadership is much more about determination. If we see a candidate from IIM, IIT, Harvard Business School we decide s/he must be recruited but what we don’t look at is attitude. We should always hire for attitude and train a person for skill—it is much easier. Attitudes are set in the first three years of life. You can’t change your attitudes. As business people when we hire people in our organizations we get impressed with their credentials and we don’t look into qualities like determination that’s what makes leaders.
Yes but does it have to be an either or scenario?
Well ideally you would want somebody who has got all those credentials and determination. But in the real world you don’t get such people because people are not perfect so if I had to choose I would any day take a person with determination. We have a bias for thought and not a bias for action. That was part of the problem in the last government, too much thought. Growth is the best tonic for poverty elimination and we did a damn good job as a country in the last decade of poverty elimination because of high growth, not because of NREGA and the food security and all that. Jobs came because of growth.
How do you think consumerism in India has evolved since liberalization? We definitely had very few choices in the 80s up to the 90s. There was no quality, no competition.
I must say philosophically I am not a consumerist. I don’t frankly buy very much, books maybe. I just replaced my car you know my car was 18 years old, can you believe it. Consumer choice does not have to mean consumerism and I philosophically believe in choices in all areas. Liberal people are by nature consumerist. I agree with the view that the sin of capitalism is greed but the sin of socialism is envy and that to me is a worse trait than greed. During the days of socialism, deep down, people loved money but they were hypocritical, they couldn’t admit it and now young people have no problem with saying I want to get rich. So all that hypocrisy is gone which is good. I grew up through the License Raj and the whole period from independence. I think we got our political independence in 1947 but we started getting our economic independence only in 1991. We are very young country for markets. We didn’t let the market function until after 1991 and even there we are still not fully reformed. But to me what is amazing about the India story is that as a democracy we have gone from a closed economy to the second fastest growing economy in the world, and now we are about to become the fastest growing economy in the world.
Do you think it is right to compare India with China?
India will overtake China in growth rate and so we can keep doing that for another two decades. I think that we will be just doubling per capita income every 8 to 10 years.
So before we realize it the 2 trillion economy will be 4 trillion, 4 trillion will be 8 trillion and 8 trillion will be 16. The mistake we make when we compare India and China we talk about who is going to get rich first, that’s not the race, both countries are going to turn into middle income countries. Both will have per capital income but both China and India think that they’re going to manifest when they reach $40,000 why 40 because that’s the US per capita income. But that’s not going to happen unless India fixes its governance and China fixes its politics. The race is who will fix the government first. China has to give freedom towards people and India has to improve the day-to-day governance. In India, the executive has become very weak and that’s where you need reform. For example, why should a civil servant who works one hour a day and a civil servant works 14-hours a day get equally rewarded. They earn the same salary. They get promoted on the same day. Now, can you imagine an organization that functions like that? The prime minister also said in the beginning of his term that we should put people who have been elected to parliament and state assemblies with a criminal record on fast track so that within a year they are out of the system and the honest ones are cleared and dishonest ones are removed. These are the kind of reforms that are crucial for the country.
A last question for you—you have come full circle as you started as a philosopher then you went into corporate sector now you’re back as public intellectual and a writer. Can you tell us about your journey?
Well you know the fact is that in one lifetime you can reinvent. I quit the corporate world at 50. I still could look forward. It was not retirement. I looked forward to another career.
I always had that passion. I did a degree in philosophy. I went into business by accident. It wasn’t planned at all. I was going to do a PhD at Oxford and at the last minute that summer before I went for my postgraduate work I suddenly asked myself do I want to spend the rest of my life in that stratosphere of abstract thought and so I got scared, I got cold feet. So while I was trying to figure out what I was going to do in life I was back home and it was very embarrassing for my parents to have an unemployed son at home who had been to Harvard. I think just to save that embarrassment, I answered an advertisement from Vicks Company who were looking for a trainee in sales and marketing and I got the job and stayed on but still spent my weekends reading. I never got into that whole corporate world of golf over the weekends and then when I was reading at some point I said you know you can’t, reading is all taking in and I said you got to give back, you got to take something out and so I started writing a play. So I think it takes both love and skill. And passion. I mean I sometimes ask myself and my wife also asks that question that look you achieved all this then why must you wake up every morning at 6 o’clock, go to your desk and then I work flat out till about 1, from 6 to 1. I think that there has to be the kind of passion that it doesn’t feel like work. I think one of the jobs of a teacher or a parent is that while the child is growing up, to help the child discover their passion.