Synergies Between Government and Industry
– Emerging Markets Club Panel

Emerging Markets Club panel had R Santhanam, MD, Hindustan Motors Limited; Bhaskar Ghose, MD & CEO, IndusInd Bank; and Suhas Tuljapurkar, Director, Legasis Services Private Limited as speakers. The moderator was Brigadier P Raj Kumar, Head of Faculty, College of Defence Management. The panel focused on the necessary synergies needed between corporate India and bureaucrats, and the need for overcoming the uneasy alliance between India Inc and policy makers.

R Santhanam commenced the session talking about how the government and industry came together against numerous odds to accomplish the reduction of pollution levels in New Delhi. In order to tackle the problem, the government decided to introduce low pollution CNG powered buses for public transportation. The government played a coordinating role, and through a series of incentives for each stakeholder, was able to implement the CNG proposal successfully. “Determination, discipline, focus and control helps create the synergies which lead to better results,” he concluded.

Bhaskar Ghose said that liberation reforms experienced by India Inc in 1991 were a result of necessity, and not Government conviction. He went on to elaborate on the existing synergies that existed between the government and the private sector, and the consequences of these synergies in the form of reduced tariff barriers for imports, increased FDI in retail, increased government investment in infrastructure, greater formulations of public-private-partnerships. He cited government’s assistance in growth of BPO and software exports, and the examples of Indian Railways, National Institute of State Governance and Cochin International, as examples of the achievements of Public Private Partnership. The other areas he touched upon were partnerships between the corporate sector and the government in the banking arena, kiosk banks, rising role of self help groups and microfinance, growth of securitisation etc He cautioned that this partnership was nothing close to perfect, and the battle was against crippling levels of government bureaucracy, intrusive policies and powerful but irrational regulations. “India has a unique advantage in that apart from it’s prowess in the manufacturing and services sector, it’s true muscle lies in its vibrant economy, and it is up to the government along with the corporate world to take it to the next level,” he said.

Suhas Tuljapurkar was of the opinion that the paradigm shift in economic policy and liberalisation norms of 1991 were “forced” by prevailing circumstances rather than careful policy planning. He spoke about regulatory authorities in India and their shortcomings. One of the examples he quoted was the January 2006 decision of allowing 51% FDI in the retail sector. The regulation norms were so ambiguous that it took almost 6 months for Wal-Mart to interpret and plan an entry. Speaking about Public-Private Partnerships (PPP) he said that despite the government having identified education and water as areas where PPP can be effective, no synergies have been built. “ Is the licenser Raj being replaced by the regulator Raj?” he asked.