PM's address at the Economic Times Awards function
Speaker: Dr.Manmohan Singh
Date: October 6, 2006 Mumbai

PM's address at the Economic Times Awards function Hindi Version "I am delighted to be with all of you today and be associated with the Economic Times Awards. I congratulate the winners of the Awards for displaying the creativity, dynamism and enterprise which have made each one of you role models for others to follow. Alvin Toffler, the futurologist, had once defined a 'generation' as eighteen years. By that definition, we are not yet a generation away from the new turn we took in our economic policies in 1991. Fifteen years, moreover, is not a long time in a nation's history. You will recall Mao Tse Tung's famous quip when Henry Kissinger asked his view of the impact of the French revolution. He said it was too early to tell! Mao probably exaggerated but, I am not sure if the time has already come for us to be taking stock of the reforms we initiated in 1991. But, let me sincerely compliment The Economic Times for thinking of this innovative manner of marking 15 years of economic reforms. I am truly grateful to you for inviting five of us here. My Cabinet colleagues Shri Chidambaram and Dr. Ahluwalia, my friend and adviser Dr. Rangarajan, and Governor Reddy were all undoubtedly part of the original Team of 1991. There were, of course, many others who not only played a critical role in managing the crisis of 1990-91, but also in launching far reaching reforms in our policies. In many ways, the seeds of reform were sown by Shri Rajiv Gandhi during whose Prime Ministership fresh thoughts and ideas seeped into our thinking in government. I must also acknowledge the intellectual role of an earlier generation who, in the 1970s and 1980s, wrote extensively on the constraints being imposed on growth by an out-dated regime of control and regulations. Economists like Raj Krishna, Jagdish Bhagwati, T.N. Srinivasan, Vadilal Dagli, P.R. Brahmananda, Mrinal Datta Chaudhuri, Shenoi, VK Ramaswami, B S Minhas, Ashok Desai, Arjun Sengupta, Shankar Acharya and so on. I had other colleagues in Government like M. Narasimham and Abid Hussain. In the final analysis, it was the thoughts, writings and deeds of countless concerned citizens which finally blew away the mindsets of the past and threw open the doors to a new era of dynamism, progress and growth. I recall what Robert Kennedy had to say about the shaping of history "It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope. And crossing each other from a million different centers of energy and daring, those ripples build a current which can sweep down the mightiest walls of oppression and resistance." By 1991, I do think that mainstream intellectual opinion had comprehensively rejected the regime that was dubbed the 'Licence Permit Raj' before we, in Government, finally managed to dismantle it. That is how social change has always come. That is why Lord Keynes had famously said that in the long run those who shape intellectual opinion have a greater bearing on the course of human history than vested interests. In fact, if we had allowed vested interests to have their say in 1991 - the reforms would probably have been rolled back - or, never have even taken place. For this reason, I am delighted that today it is in Mumbai that you are celebrating 15 years of reforms. For it was here that the Bombay Club was formed to seek a reversal of many reforms! There were many doom-sayers who predicted runaway inflation and a collapse of our economic system as we knew it. If we were able to overcome criticism and stay the course, it was not just because we were clear in our minds on what had to be done. It was also because public opinion was on our side. In shaping that opinion and in mobilizing that opinion, the media played a vital role. I must place on record the unwavering commitment of the Economic Times to economic liberalization and reform. In those early years The Economic Times stood by us, supported us and guided us. One of the significant aspects of the reforms we initiated was the sui generis nature of the Indian experience. We did not stick to a given formula. Many accused us at that time of reading from a script written in Washington DC. But I recall the meeting between Mr. Michel Camdessus, the Managing Director of the IMF, and Prime Minister Narasimha Rao. Narasimha Raoji told him that reforms in India would have to be mindful of Indian concerns. We are a democracy. The interests of our working people must be protected. We told the IMF that we cannot allow a single public sector employee lose his job as a result of our structural adjustment programme. I believe that we delivered on the assurance that the reforms would be calibrated to suit our priorities. And so they were. In retrospect, the decision then to move away from an oppressive tax regime to a moderate one has been proved correct and has paid rich dividends. The moves then taken to open up our capital markets to foreign investors, to liberalise the external sector by moving away from protectionist tariff walls, to liberalise the foreign exchange regime by introducing a market based exchange rate and dismantling the industrial licensing regime have proved to be durable. They have stood the test of time, withstood changes in governments and most importantly, won widespread acceptance. Fifteen years may not span a generation, but they produce a lot of change. Consider the fact that barely 15 years ago most of the awardees tonight were not well known public figures. A few weeks back, at a similar business awards ceremony in Delhi, I found that more than two-thirds of the nominees were not even in business in 1991! They were all children of reform, not necessarily children of businessmen. Many of the awardees tonight are also children of reform. That is a measure of the change underway. To all the successful entrepreneurs who have emerged from this process, my advice is to treat their wealth as a societal trust and manage it for the welfare of the nation at large. Lord Keynes, analysing the role of capitalists in 19th century Britain in his work The Economic Consequences of Peace said "If the rich had spent their new wealth on their own enjoyments, the world would long ago have found such a régime intolerable. But like bees they saved and accumulated, not less to the advantage of the whole community......... (they) were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of "saving" became nine-tenths of virtue and the growth of the cake the object of true religion." Economic reforms have created a new world that simply did not exist earlier. Fifteen years ago you had to be in a queue, use influence and offer bribes to secure a telephone connection, buy a scooter or even get a gas connection. Today, I find farmers, vegetable vendors and plumbers using mobile phones. Nothing symbolizes the change in our economy more strikingly than this. There is a new dynamism in India. Last week, Mr. Chidambaram told all of us that the first quarter growth rate for 2006-07 was almost 9%. For the first time in history, India has recorded a growth rate in excess of 8% for four years in a row. I see a new dynamism in our entrepreneurial class. I see a new energy, a new creativity, a new urge to show that India can do it. I do believe that India can do it. However, if we have to realize our full potential there is much work to be done. There is an agenda of reform that you are familiar with. We need to work towards a more open and efficient financial system, a system capable of generating the necessary financial resources needed for the rapid growth of our economy. We must also not give up the long term goal of full convertibility for the Rupee. This will require substantial preparatory work which has already begun. We have to improve the quality of our infrastructure - our ports, roads, airports, railways, power and water utilities, and so on. We need to cut down even more red tape and eliminate the "inspector-raj" just as we have done away with the "license-raj". I do not wish to take your time going over familiar territory. My friends on the dais have elaborated on these in detail. However, the point I would like to draw your attention to is one of even greater concern for the long term well being of the nation. Millions of our fellow citizens are still deprived of the benefits of a fast growing economy. While the belief in a market economy is certainly justified, it must be remembered that markets serve those who are part of it. They have no relevance to those who exist on the margins of subsistence and who have neither the physical nor the human resources to participate in them. Our growth processes, while generating wealth and prosperity across large sections of society, have not been able to generate employment opportunities on the same scale. Agriculture in the past few years has not exhibited the dynamism visible in the rest of the economy but continues to support 2/3rd of our population. By and large, the reforms of the 1990s were right. But I admit that there was a relative neglect of investment in agriculture, education and health care. Agriculture and employment generation can be ignored at our own peril. They can put at risk all the benefits that have accrued so far from reforms. We need to expand the meaning of reforms to include the reform of our education and health care systems. We need massive investments in education; in creating new and marketable skills; in skill building and vocational education; in the quality of governance at all levels of Government. There can be no political differences on this minimum programme. If we can devote our energies to improving the quality of our economic and social infrastructure, we can assure future generations that we have served them well. There is an agenda of reform waiting to be taken up. In the financial system; in agriculture, in infrastructure, in manufacturing, in banking and finance, in our educational and vocational training system, in health care, in government - at all levels of government. In no area of social and economic development can we, as a nation, afford to adopt a `Chalta Hai' attitude. We have to create an environment that will raise the level of investment. I recognise the need for greater flexibility in our Labour markets while ensuring that legitimate interests of workers are protected. Only such flexibilities can move investment away from capital intensive approaches to labour intensive ones so that the jobs our country needs can be created. But our concern is not just with getting new investment into the economy. We must also be concerned with raising the productivity of existing investment; improving the skills and capabilities of our people; making government more accountable and efficient. These are difficult tasks. But it is not these mundane matters of getting things done, and done better, that really worries me. What worries me is the mindset that restrains us, that constrains us, that holds us back. Reform is, in the final analysis, about changing mindsets. We must have the courage to think out-of-the-box. We must have the courage to think anew. To question old beliefs. To seek new pathways. As an old Chinese saying goes - a road is made by walking. We must learn to walk in new directions and create new roads to progress. I sincerely hope that the people of our great nation share with me this urge to be creative, to walk down untrodden paths, to find new answers to old problems. India is a nation of young people. New generations of voters and investors have been born in the last 15 years. If we do not address their concerns, if we do not meet their aspirations they will not forgive us. The road ahead has to be defined by their aspirations, and those of coming generations. The challenge before the political leadership in India today is to meet the aspirations of an energetic new India, and, at the same time, take care of the concerns of a less endowed, less privileged sections of our society, who are no less energetic. I know that I have in front of me, the elite of Indian enterprise. Many of you have inspired a new generation of Indians to seek greater glory and climb higher peaks. But I do want to remind you once again that we owe our society, our nation, our people an obligation. We must work together to rid this ancient land of ours of an ancient scourge - of poverty, ignorance and disease - in our lifetime. I am confident that this is possible. We must all work together to build a new India of our dreams - a prosperous India of more equity and greater equality. An India of more creativity and greater enterprise. The two can go together. And they must go together. No pyramid of achievement and progress can shine at the top for long, if its base is weak and crumbling. We have to build a stronger base. A more energetic and capable social and economic base for sustained and sustainable economic growth. You, ladies and gentlemen, are the beneficiaries of a more open economy and an open society. You have benefited from what our country has been able to give all of us. It is time you contributed, in your own way, to building a new India. And as I said long ago quoting Victor Hugo that "no power on earth can stop an idea whose time has come .... and the emergence of India is one such idea.' We have come far and this idea - which was an idea then - is now an accepted axiom. Working together, working creatively, working wisely, I am confident we can realise our collective destiny as a great nation."