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BHARATH VISWESWARIAH: My name is Bharath.
I'm the Executive Director of the University
of Chicago Center in Delhi.
And in opening today's event, what I
wanted to do is to just very quickly give you
a sense of what the center is and what we do,
and then to just very briefly introduce Mr. Ninan and Bill.
The center has been in existence for very close to two years
now.
At the end of March, we'll come up on our second anniversary.
And the reason that we set this up is to provide a hub,
provide a home away from home, for our faculty members
at the University of Chicago that
are interested in doing programs, research, teaching,
or any other activity related to India.
In fact, all of South Asia is what the center spans.
So what we do is to provide grants
to our faculty members that are interested in doing work
in India.
And that has already translated into a number
of really vibrant research programs
that are running on the field across different parts
of the country.
And many of those programs culminate
in seminars, workshops, and other academic discussions
here at the center.
In addition to that, what we also want to do
is to make the center an intellectual destination
in its own right, a place for interesting, vibrant, rich
discussions on topics that matter to all of us.
So it's in keeping with that mission
that we do a number of programs that are public in nature.
Many of these are free and open to the public.
And today, of course, is a great example of one of those.
2015 was actually of course, our first full year in existence.
And across all of 2015, we did a 100 programs like this,
with over 5,500 people having attended those programs.
So I think it's already turned into a really vibrant space
for wonderful discussions like today's.
And to those of you who've been here before,
thank you for your support in making
the center such a success.
And for those of you who are here for the first time,
hopefully this has given you a sense
of the kind of programming that we do here.
I'd also encourage you to visit our website.
It's uchicago.in.
It's a great way to get a sense of all
of the different programs we have going on here.
You can also interact with us on social media.
You can see our Facebook name, and our Twitter
handle on one of the banners over there.
And for those of you that are on Twitter,
we'd encourage you to tweet about today's event
as well, Ninan@uchidelhi is the hashtag that we've
created for today.
So hopefully you'll make use of that.
Turning to today's event, I'd like to quickly introduce
our speakers.
It's a real pleasure to introduce
our very distinguished guest, Mr. TN Ninan.
Mr. Ninan serves as the Chairman of Business Standard, Limited.
During almost a quarter century at the helm
of different publications, Mr. Ninan
has been the editor of Business Standard, also its publisher
from 1996, The Economic Times and Business World.
Bringing about radical change and achieving radical growth
in all of them during his stewardship.
He was also the executive editor at India Today in the 1980s,
and for many years he's been a television commentator
on economic and business issues.
Thank you again, Mr. Ninan, for being here.
Bill Kooser is the Associate Dean
for global outreach at the University of Chicago Booth
School of Business.
Based in Hong Kong, Bill has helped hugely already
in raising the school's stature and activity in India.
Thank you very much for being here, Bill.
And I'll turn this over to you.
TN NINAN: For a journalist who's used writing 800 or a thousand
words, and going home at the end of the day,
the prospect of doing a major thing is forbidding.
But Vijay Joshi at Oxford is an old friend.
And has also been writing for The Business Standard.
So he comes to India a couple times a year.
And we met for lunch.
And he said, you know, I'm thinking of writing this book.
So why don't you join me, and we'll do it together?
And the idea that he had was exactly what
you just said that there is no comprehensive book on India.
Which covers-- he's an economist,
and I'm a business journalist.
But it covers not just business and economics, but all
the other issues as well.
And there is a gap, which gives us hope to write a nice book.
So actually we started out together.
But then our writing styles didn't match.
And it was difficult to meld it together.
So we finally agreed with the publishers
that we would write two separate books, which
they would publish.
So actually Vijay is just about finishing his manuscript.
So it should come out in a few months.
It's a little more academic than this one.
But that's the way he deals with issues.
So actually that's how the book came into being.
But the idea was that there is no comprehensive book on India.
And we went back, looking at all the books
that have been published.
And none of them actually quite fit that bill.
So that was the idea that anyone who
wants to read and understand, here's
one book that sort of tries to give it to you.
BILL KOOSER: Simply a matter of here's
laying out what some of the issues and prospects are.
TN NINAN: Well, obviously the hope
would be that it would stimulate some change.
But it will be asking for a lot of a book
to do that, particularly when I think
most of our [INAUDIBLE] class doesn't actually
read these books.
I mean I've sent out copies to a lot of people in government.
And I've actually got zero come back from them.
Whereas lots of other friends who are in business and media,
of course, and from the diplomatic world, some
of the ambassadors in Delhi have been very, very encouraging
in the way they have responded to the book.
So there are people who are doing that.
But from the government, no.
BILL KOOSER: No reaction?
TN NINAN: Either they're too busy.
Or they'll read it only when they retire,
or I don't know what.
BILL KOOSER: What-- as I've read through the book,
you are very frank in lots of areas.
You have a clear outline of many the frustrations and challenges
facing India, but also lay out some
of the wonderful opportunities.
And people asked me earlier today,
is it generally an optimistic or pessimistic book?
And I said, you know, I'm not really sure.
How would you characterize your view?
TN NINAN: That is actually a good question.
Because I found that a lot of people who read it feel
I'm being pessimistic.
And actually my take on what I have thought I've written
is a cautiously optimistic book.
That it's laying out a scenario where
India will do better progressively over time,
in a variety of ways, and for different reasons.
And we would-- it will never be a story completely done,
so to speak.
It's always work in progress.
It's partially done.
It's two steps forward, one step back.
It's messy.
It's all of what India is.
So it's never a cut and dry kind of picture.
So it's complicated.
But it is not pessimistic.
It is actually cautiously optimistic.
It's saying don't expect us to get everything right.
That will never happen.
But there is enough in the system
to make it keep moving in the right direction.
BILL KOOSER: One of the things that has, I think,
has an effect on how people view, whether they're
optimistic or pessimistic, is the measures one uses,
and who you're comparing India to.
And one of the things you point out early on in the book
is this question of size and the relevant measures
and the relevant comparatives.
And I think it would be useful to talk a bit about that.
TN NINAN: I'm glad you raised that.
The two or three points I make in that
is number one that size is what defines India.
Even when we were pathetic income levels, huge poverty,
tiny share of world trade, half of 1%, the country mattered.
And it mattered because of size.
And size in many different ways, population, geography,
et cetera, et cetera.
And what will define India in the future as well is size.
Now also because the economy is reaching a certain threshold
where-- and I make the point that even as recently as 2008
or at the time of the financial crisis,
we were the 12th largest economy in the world.
And in seven short years, by 2015,
we had moved from 12th the seventh largest, almost
unnoticed.
And again, most people don't realize
that we've averaged in the last seven years more than 7%
GDP growth annually.
Which is longer or faster than-- it's
slower than the previous decade, or the previous five years,
but faster than any other long-term period we have.
So we sometimes don't give ourselves
enough credit for what we do.
And the competitors have argued we've often
used the wrong competitors.
We keep comparing, with let's say, Southeast Asia.
The point is that our starting position
was way worse than almost any Southeast Asian economy.
And I go into the numbers.
We reached Taiwan in some other number of what year later,
an so on.
So these were countries that started off
at a much higher level than India was.
And the fact that it was India that
was byword for poverty, and not Malaysia,
or the Philippines, or Indonesia,
or any of those countries.
So we started off.
And then I'd look at Angus Maddison's historical reworking
of numbers to ask, is there any country
that started off with the social economic numbers
that we did back in 1950, which has done better than us?
So let's now look at-- so now, this
is not a very attractive set of countries to compare against.
Because you're comparing with most of Africa
and some countries in Indochina and so on.
And then you get the explanation that there
is no country other than Botswana because of diamonds,
which has started off at our level,
and ended up ahead of us.
So now that's a different picture altogether.
And then I say that if you take the last quarter century,
even you take all of the rapid growth of Asian countries.
We've grown faster than all of them
in the last quarter century.
That includes Thailand, Malaysia, Indonesia, South
Korea, Taiwan, the lot.
Their growth period was earlier.
And then after the Asian crisis of '97, they all [INAUDIBLE].
So from 1988 to 2013, which is the period I looked at,
we've actually outdone all of them.
So sometimes we don't give ourselves
credit for what we've done.
And if you look ahead, and in these 25 years
we've done about 6.5% annually GDP growth.
And as I mentioned, we've done 7-plus actually
in the last seven.
So it's reasonable to expect, unless the world
implodes, I mean that moment you come from Hong Kong.
Everybody's so nervous there what's
going to happen in China.
But at the moment, the world looks a little uncertain.
But unless things just fall apart,
there's really no reason why you shouldn't expect to achieve 7%.
And then every decade you're seeing quantum leaps.
And I give the example of what happens to markets.
Because number one, today's middle class broadly,
and the number I put out is 27% in 2011, maybe a little higher
now.
So let's say 30% of India's properly middle class,
using an international income benchmark.
So the system works for 30% of the population.
Assume ten years from now, because the economy has doubled
and it has become the fourth-largest economy
in the world.
It overtakes Germany, Britain, France, the lot.
And you then on the one hand, get
markets which are the third-largest
in the world, and all the forecast,
not by Indian forecasters, but international forecasters.
It will be the third-largest car market, bigger than Germany,
bigger than Japan.
It will have the third-largest civil aviation industry.
And third because China and the US will always be [INAUDIBLE]
number.
So you can't hope to be first or second, except maybe
in mobile phones.
But otherwise, you're third-largest
in civil aviation.
Outbound tourism, Indian traveling overseas,
in the last decade it's gone up from 5.5 million to 16 million.
So it's tripled.
And in the next decade, it will triple again.
So now 16 to 50 million is an order of magnitude difference.
And you think of what's going to happen to aviation.
Which is why I said, this will be the third-largest aviation
market.
So when you get scale, suddenly you count in ways
that you didn't before.
Which is why I say it's a turn of the tortoise.
Because we've been slow.
We've been left behind by all the rapid hares that
ran ahead of us.
But the time has now come when you
can see that the combination of size and speed,
and I make the point about how speed
is different from momentum.
Because momentum comes with mass.
And momentum is speed plus mass.
A bullet traveling at 600 miles an hour
is different from a meteor traveling at 600 miles an hour,
because sheer mass of it, there's so much more energy.
So when let's say today we're a 2.2 trillion economy.
But suppose a 4 trillion economy is growing at 6% or 7%.
The sheer impact of that is what we've seen happen with China.
It shakes up all world markets.
So ten years from the now, you might well be doing that.
So that's the scenario that [INAUDIBLE].
BILL KOOSER: So it's interesting.
I mean one of the things that struck
me is that perhaps the best comparative countries would
be sub-Saharan African countries looking at 1950 to now.
But because of the size issue, the typical comparison
is always China.
And as I think you point out that may not
be a fair comparison.
I'd like you to talk a little bit
about the India-China, which you touch on
in another couple of full chapters.
TN NINAN: I've actually got a whole chapter up
in the beginning in front to say that
this whole India-China comparison is simply
a wrong thing to do.
And it started with Jack Welch back in 1989,
landing up here, before our reform program began,
two years before the reform program began.
And I remember being at lunch which
was organized by GE for him.
Where he was sitting on a table.
And he said, two markets for the future, China and India.
And GE is going to focus on these two.
You know, in 1989 you're not used to listening to that.
So you say, hello.
What is the guy seeing?
And then you began to see more and more people
and Jairam Remesh coined this term, Chindia, China and India.
And you basically were saying that they're
both graphically large.
They're both civilization entities in a way.
They both have huge populations.
Both countries have entered a decline,
and now are sort of finding themselves again.
So there are some similarities, which
when you actually look at country performance
is misleading.
Because the operative factors are totally different.
China has had 2,000 years of centralized administration,
with meritorious bureaucracy, and we have not.
They've had central authority, waxing and waning
at different points of time.
Whereas ours has been feuding monarchies.
They've had-- they have a sort of greater majority, whereas we
are, as diverse as you can get in caste, community, language,
ethnicity, and so on.
So their history, they can use nationalism.
And they can use their history to build nationalism.
And here, you try to build nationalism,
and it becomes a very contentious issue.
So how do you motivate the people?
And then the whole business about what
Lee Kuan Yew said very dismissively at a thing
that I'll forget.
Because just a bit brief digression,
but there was a business conference in Singapore.
And Lee Kuan Yew was speaking at lunch.
And the focus was on China, inevitably.
And I was at a table where there was a guy from McKinsey who had
come from the Beijing office.
So after this whole China business
was going on, this chap stood up, and said, Mr. Mentor,
or whatever he was being called at that time.
You've been talking about China.
But there are two countries that are rising,
both China and India.
So what about India?
And the minute he asked this, I was telling myself,
you know this is asking for trouble.
And Lee was so dismissive.
He said, you know, the Chinese do, Indians talk.
And it sort of, the hall erupted in laughter.
And I wanted to be swallowed by it all.
And I've quoted that in the book to say that we
are an argumentative people.
And we find it difficult to follow standard operating
procedure.
Chinese can do a inroad all the time.
Whereas we always want to--
BILL KOOSER: Do it your own way?
TN NINAN: Doing something else.
Do it differently.
And it shows up even in industry.
I was talking some years ago to a production director
for Siemens Worldwide in Berlin.
And I asked him, I said, you've got stuff in India for decades.
And you've got stuff in China.
So how do you compare the workers in the two countries?
So he said, if you want the same thing done over and over
and over again, there is no worker better than the Chinese.
But if want a little application of mind, a little difference
in the way it's done and done differently,
then the Indian worker is far superior.
And in the book I quote this example
of this leather manufacturer, a high designer,
who is quoted in The Economist to saying that he tried
his level best to get his leather workers to produce
with the efficiency that the Chinese managed to do.
Which was, I think if I remember the figures right, 12 bags
a day per worker or something.
He was at three.
So he said, no matter what I tried,
I couldn't get past nine.
To finally I said, I can't compete like this.
I can only compete if I introduce
some different element, some design
thing or some other unique element to the product,
so that I'm not competing just on price--
BILL KOOSER: Here price and efficiency.
TN NINAN: And this is true in textiles and garments as well.
When you talk to-- I've quoted some of them,
the garment exporters, again they
say that you are able to compete when there's
a little bit of a design thing that you can do,
so you're not just churning out the same shirt 5,000 times
a day.
So there are fundamental differences.
Which is why I don't believe we can do this copying of China
on manufacturing.
It's just not going to work, partly
because the times have changed.
There's much more automation than before.
So the two countries are very different.
And I think it's misleading to compare them.
BILL KOOSER: Well, and certainly I
think through much of, certainly in the United States
and around much of rest the world,
it is a natural comparison just simply because of size.
And ignorance in the United States,
certainly, people just don't have
any conception of what's going on in this part of the world.
So they don't have a basis from which
to make valid comparisons, which I think you point out very,
very, very nicely.
TN NINAN: Even-- now even on size--
I mean China is five times our size, in the economy.
And I make the point that in India we keep
comparing ourselves to China.
Nobody in China compares themselves to India.
They are comparing with the US.
And in India, we don't compare with Iran,
which is one fifth our size.
So why should China compare with India,
which is one fifth their size.
This is a game that we are sitting here and playing.
But those guys are not doing this.
BILL KOOSER: I think every organization, countries as well
as organizations, I mean we as a business school,
look to certain schools as competitors.
And they may or may not look at us as competitors,
and vice versa.
So I think that's human nature, perhaps.
So you're here cautiously optimistic.
But I want to touch-- begin to touch a little bit on some
of the challenges.
One of the quotes, and I don't have the full quote here.
But there was someone you mentioned
who said, when we bet on the people we do well.
When we bet on markets we do OK.
And what we bet on policies and government,
it's a disaster, more paraphrasing.
Explain a little bit more what that means to you
and what some of the issues are between people, markets,
and policy.
TN NINAN: If you look at the success stories,
they are fundamentally the quality of the Indian person.
Of course helped by education in the better education
establishments, not all of them.
But it's the quality of the Indian human being
which makes a difference.
Now it could be in tech.
I mean I know a German who used to head SAP's
Bangalore office for years.
They had three research centers in the world,
three major research centers.
One was in California.
One was in Germany.
And the third was in India.
Later they've added one more in Beijing.
But at that time, they had these three.
So I said, this is a question that everybody is asking me.
So I asked him.
I said, tell me.
Tell me what you get.
So he said, in India we get California-style productivity
with Indian costs.
You talk to Shell, which has a major research
facility in Bangalore, and really cutting-edge stuff.
And you ask them, are you basically here because of cost?
They said, initially we did.
But now actually, this guys are better than we have elsewhere.
So it's a quality of the Indian worker, mostly white collar
admittedly, which has made the difference to tech,
to pharmaceuticals, to the guys, the diaspora, all the Indians.
So you can bet on the Indian person or the Indian people.
And companies have made it a success.
IBM has more workers here than anybody else in the world,
and so on.
So that's one.
So when you bet on the Indian people, it works.
And bet on the Indian markets for a long time,
nothing much is happening in the Indian market.
We are growing at 3.5% or 5%.
It's slow.
And everybody else was obviously Asia was the big story.
And before that it was Tigers, Korea, and Taiwan and so on.
So we were not important as a market.
And if a lot of people-- most of the investment companies
who actually came here in the early '90s,
and the first flush of enthusiasm about globalization,
a lot of them just failed.
Because they said, hello, 1 billion people,
200 million middle class, this is an opportunity
waiting to happen.
And they would-- Kellogg would come and open up.
And they thought they were going to get--
and they just collapsed.
So then you sack your chief executive and all this goes on.
So the market wasn't working for them.
But now it is.
I mean you talk to Ford.
And they are setting up.
They want to set up their single largest car manufacturing
facility in the world in [INAUDIBLE].
Why?
And they are just desperately hoping that we finish our,
we come to terms with our free trade agreement
with the European Union.
Because they want to send cars to Europe.
And they say there is nowhere else
we can make these cars at lower cost at the same quality.
So the market is now also beginning
to work because mobile phone, you know the whole list.
So the market is also now beginning to work.
And if you are the seventh largest economy, heading
to be the fourth or fifth largest, then
obviously the market size is important, [INAUDIBLE]
which just keeps moving along.
I mean I don't know when we'll do evidence-based policy-making
in a way that makes complete sense.
All change seems so difficult.
Sometimes we don't realize how difficult
it is when you're sitting inside government to make
those changes.
Somehow the perspective from the outside is clearer.
When you're sitting inside, you see all the complications,
and all the way things can go wrong.
They are smart people.
You know with Lant Pritchett's thing from Harvard,
where he says, he calls it a flailing state, which
I referred to in the book.
That you have really smart guys who
are the head, who are really comparable to the best
in the world.
But the arms and legs are flailing because nobody
listens to anybody.
I mean there was a report in The Times of India about a week
or 10 days ago, about this crazy flyover
outside-- well something you wouldn't know about.
But everybody who lives in Delhi will know
how they built it too narrow.
And so it's causing endless bottlenecks
as you come out from the airport.
So they need to build another one next to it.
And they decided on that three years ago.
But nothing's happened.
Why?
Because the national green tribunal
wants to know whether this area is going
to be an extension of the ridge, which is a green belt.
And if it is, you're not going to be allowed to cut any trees.
So the green tribunal, which is mandated under law,
has to first decide whether they're
going to be allowed to cut more trees, three years.
And there are high-pressure gas lines, and some other stuff.
So they were told, look hey buddy,
just because we're doing this.
And they said, well, give us 70 crores, and we'll do that.
Because that's what it costs.
70 crores is 700 million rupees.
So the government says, well, why would it cost so much?
It is [INAUDIBLE] wood.
It's public purpose.
Nobody's going to pay you any money.
Just move it.
So, number two.
Number three, when you want to build this,
you need to use-- divert traffic to roads on either side.
So that you don't get a problem during the construction phase.
Now you can't do that.
Because there are encroachments to those roads.
And who's going to remove those encroachments?
Somebody wants to [INAUDIBLE].
I mean it becomes an issue.
So this one flyover is going to take 10 years to build.
And if you ask yourself, why can't we
do it the way China does it?
They built the Beijing Shanghai super-fast train
line in two and a half years.
We can't acquire the land in two and a half years.
And it's not because we don't know how to acquire land.
But look at this.
The system is federal.
It's all manner of independent forces working.
So it's not China.
BILL KOOSER: So are there, say two or three policy areas
that you would like to tackle first
that you think are causing some of the most difficulty?
TN NINAN: I only have two, which is health and education.
I mentioned the whole issue about factors of production
being three, which is land, labor, and capital.
And we have big issues in all of them.
I mean if 70% of Indian banking is government-owned banks,
and with all the new disclosures that are coming out.
On average they've got about 8% of their loan book
is non-performing.
And the capital adequacy is about 10-12%.
And some of those banks have non-performing loans
of 13% and 14%.
Fundamentally they're bankrupt.
So the government has to recapitalize.
The government has fiscal problems.
So your capital markets, and this
is a banking-centric capital market.
I mean the stock market is there.
But it's small.
The bond market doesn't exist.
So you have a fundamental problem
with your capital market.
You have a problem with your land market,
both before and after the new law.
You have a problem with the labor market.
Because even Mr. Modi with a massive mandate,
when he was asked, why don't you address this,
he will say, no, no, no.
I don't want to upset trade agreements.
So if you don't feed the factors of production,
how do you get the system to a higher productive level?
So those are constraints.
But I really see no reason why we should not be addressing
health and education.
And I've mentioned in the book.
I feel really concerned about the capture
of the health-care system by these corporate hospitals.
It's a complete outrage.
And then they get tax benefits through this medical insurance
thing, where the patients only go to them.
And if you took that same money, and diverted it
and built public hospitals, there
are three patients for every bed in a Delhi public hospital.
If you triple the number of beds,
you'd get a proper public health system going [INAUDIBLE].
So, I think health and education.
BILL KOOSER: Tell me more about the education piece,
given that we are--
TN NINAN: Sorry?
BILL KOOSER: Tell me a bit more about your views
on the education piece.
That's our business.
TN NINAN: We have average years of schooling
of five and a half.
China has 7.7.
Most developed economies have 10-11 plus.
And we were stuck for a long time at four and a half.
Now we managed to move to five and half,
partly because through the last decade
and this whole millennium development goals drive,
we've achieved universal enrollment
at the primary level.
But as the annual status of civilian education finds out,
class five students can do class two level math comprehension.
And the only time when we send our students
to make our students participate in the international PISA
comparison, our students came out
second worst, ahead of one country, which is Kyrgyzstan.
Now if that is the state of your school education,
somebody's got to do something about it.
You don't hear anybody talking about it.
It's all about who's [INAUDIBLE] in the [? AFTII, ?]
and what's going on about the students who
side in the [INAUDIBLE].
Nobody talks about schools.
And it's just beyond me.
BILL KOOSER: Well, it's interesting,
given how culturally important education seems to be here
in India, and the very high quality
at the very top of the higher education
pyramid that the rest of the system
doesn't seem to work as well as it should.
TN NINAN: And as a society, we value education.
Parents will spend their last rupee
to send their kid to whatever they can afford,
or whatever they can't afford.
So it's not that the system does not value education.
It does.
But you're not providing what people want.
And it's a non-functioning system.
BILL KOOSER: And what are some of your thoughts
on how to address that?
I mean one of the things I think you talk about,
and I've read elsewhere, is absenteeism
by teachers and people coming to school and not having anybody
there, leaving early or what have you.
And there does seem to be a lack of accountability
all the way down the system.
What's possibly done?
TN NINAN: You know, I have no solution.
Because I refer to Banerjee and Duflo and this marvelous book
they've written called, Poor Economics, which
is very easy to understand.
Any layman can read it and understand it.
It's a terrific book.
It's based random surveys and evidence-based conclusions.
And the extraordinary conclusion they come to
is that don't expand the government
system, because it won't work.
When two people say that from MIT, it's quite extraordinary.
And we interviewed Abhijit Banerjee for the book.
And he was saying, this will not work.
But I can't see-- no country has developed
with essentially private education
or private medical care.
Every country has got public health-care and public
education.
And if you can't fix it, you've got to find some way to fix it.
BILL KOOSER: Yeah.
Some of it, I mean certainly in the United States,
public education, the public education
is generally at a very low level.
I mean so where I come from the school district
encompasses 60,000 people.
TN NINAN: It depends on the school district.
That's true.
BILL KOOSER: So I mean your big cities are much larger.
But it's not nationwide.
TN NINAN: That is true.
BILL KOOSER: The accountability is at a much lower level.
TN NINAN: Yeah.
But I'll give you an example of we
had a Chief Minister for 15 years,
before she got replaced two years ago when she lost
the election, Sheila Dikshit.
And one of these chaps who runs a couple of private schools,
so the lady actually went to her, and said,
you know Sheila, if you give me two of your government schools,
I'll show you what I can do with them.
I don't want any money.
I'll use the same teachers, [INAUDIBLE].
I've been to [INAUDIBLE] schools in Mumbai, where there
are a couple of these NGOs.
You know, the municipal schools mandatorily
have to offer the local language, Meraki,
as the medium of instruction.
So you have English stream, and you have a Meraki stream.
And no kid from any slum wants to go to the Meraki school.
They all want English.
So you have a [INAUDIBLE] laws in schools in [INAUDIBLE] which
are empty, the classrooms, the works,
where there are no students.
So I know a couple of these people who went to [INAUDIBLE]
and said, [INAUDIBLE].
We will bring our teachers.
And we need to get the kids from the slums.
And we will teach them our way.
[INAUDIBLE]
And the operation said, all right.
And the results are amazing.
So it just tells you what can be done.
BILL KOOSER: So staying on this theme
of a kind of government role, one
of the things you mentioned.
And I don't know if I get the quote properly.
But it's that the government really
should shed all nonessential activities.
What you do you view as nonessential activity?
What do you think is the proper role of government in India,
in an ideal situation, again avoiding--
what's political or possible.
TN NINAN: I mean you spend 20,000 crores on Air India.
And now you want to spend another 20,000
crores in Air India?
Why?
You have profitable private airlines.
DL and Air India's share of the market has shrunk steadily.
Why do you want to run an airline?
Why do you want to run hotels?
Why do you want to get into all these activities when you
don't-- you're not hiring teachers.
You don't have enough judges.
You don't have enough policemen.
We have particular kinds of policemen
that you need to have.
So we are an under-governed country.
So you should [INAUDIBLE] in law and order, justice system,
the jails, school teachers.
Why are you going into all these other areas?
I don't understand why they just don't prioritize mining.
Okay.
It got nationalized in the 1970s.
Why do we stay with it?
Just let the big companies come in and mine.
If you have a proper regulator, which we don't have today.
And let them mine it.
So why should Coal India have a monopoly in that?
BILL KOOSER: So some of the things, particularly airlines,
seem to be kind of national status symbol somehow.
And I've never fully understood that.
I mean do you have any perspectives on why does
the national government decide they want an airline,
whether it's in India or elsewhere?
What is it about politicians that feel that's appropriate?
TN NINAN: Well, you know, I think
the way the aviation industry was organized,
you had an [INAUDIBLE] carriers.
But it's long past that.
You have foreign investment in domestic carriers, capital
in the gulf, in Singapore.
You know, if somebody took those decisions,
you might be surprised to find that people cheer [INAUDIBLE].
I mean, OK, the employees may be upset.
Or you give them a handshake to show they're taken care of.
It's cheaper than spending this kind of money on it.
BILL KOOSER: Given your comment about the airline industry
here having the potential to grow extraordinarily quickly,
you could take the Air India assets
and turn them into a private airline that could conceivably
do much better than it currently does.
TN NINAN: So all governments, not just the central states,
they're all busy doing things that they
have no business doing.
BILL KOOSER: Let's touch just briefly
on the corruption issue.
Again, you have a whole chapter on corruption.
Perspectives on what can be done, what should be done,
the challenges therein?
TN NINAN: My sense is that-- I'm sort of going out
on a limb on this one-- is that the really
big ticket corruption we may not see again
in quite the same way.
Because of what happened between 2010 and '12.
And I mentioned that 13 or 14 people
were in jail, senior politicians,
or being charged or potentially in jail.
So the thing that you still have not
found an answer to how to finance a political system
and the electorate system.
And we have still-- we are trying to use technology
to try and get rid of petty corruption, which
is an irritant to most people.
It's still work in progress.
So once again, it will get better.
But it won't be perfect.
BILL KOOSER: You talk in particular
about the [INAUDIBLE].
TN NINAN: I think that I was the extreme.
The reason why I say it won't happen again
is that the [INAUDIBLE] government
was a coalition government.
The prime minister effectively did not
appoint his cabinet colleagues.
Because it was a part of a coalition arrangement.
So the coalition partners would say
I want this portfolio or that portfolio.
And then they would actually nominate somebody
from their MP list would be made the Minister.
And in fact, the telecom Minister's appointment
was announced in Chennai by [INAUDIBLE].
It wasn't announced by the prime minister.
So it tells you how much the coalition partners
were deciding.
And now you're not appointing him.
You can't dismiss him.
Because your government will fall.
so the guy is an independent republic.
And he has to give money to his party bosses.
He wants to make money for himself.
And the prime minister either couldn't or wouldn't stop it.
That is certainly not the case today.
You have a strong prime minister.
You have a single-party government.
He appoints and he will sack.
So ministers will not try to play ducks and drakes the way
they did in the previous government.
Therefore, I think this is a fundamentally different
situation from what used to exist.
BILL KOOSER: Great.
TN NINAN: And the telecom thing happened really
because of the coalition.
BILL KOOSER: Right.
But clearly big, visible, and large dollar at stake.
TN NINAN: Yeah.
BILL KOOSER: Last subject, and then
we'll open it up for questions, is looking forward
at India's role in global geopolitics.
Comparison with China, balancing off China's growing power, just
some of your views there, where coalitions could be, should be,
are being developed, and what India's role
could be in thinking about the whole region,
and what its position ought to be.
TN NINAN: Well, India's diplomatic position
has always been that we want a strategic economy.
The words used in a different era was non-alignment.
The words used today are strategic economy.
They mean be the same thing, frankly.
We don't want to get caught in somebody else's war.
And we want to be standalone, and we want our own turf.
Now that's been threatened by the rise of China.
And it's interesting that all the alignment of interests
with the US are to the east of India,
because the China factor.
The US wants you to play a larger role there.
The US wants you to expand your Navy there.
You get Japan, and the US and India
doing joint naval exercises, Australia joining.
This entire thing of alignment of interest
is because of China.
And then if you look to the west of India,
there is a complete divergence of interests,
a total divergence of interest on Afghanistan.
And the US kept India out of the key negotiations for the post
arrangement after the coalition would move out.
There is disagreement on everything
to do with the Arab countries.
There is disagreement on all the multilateral issues,
whether it's trade or you name it.
BILL KOOSER: Trade, climate.
TN NINAN: So there is climate change, all of them.
So the only alignment is because of China.
Now I mentioned this, the two worlds operating here,
and the operative word really is China.
And if you don't strengthen yourself,
you could actually lose out.
And that's the risk we run that you never know.
It may seem highly unlikely today.
But you never know when a big 2 can get together.
And then are left nowhere.
Obama tried it in his first trip to China, and got a rebuff,
and came back so angry that he then
changed his whole position.
But on that first visit, the declaration actually
said that the US and China were to work together on South Asia.
It got everyone here in India riled.
So you have to be careful.
So you need to build up your strength,
and the bottom line is that you'll build up your economy.
And we're not doing-- we're still playing
the 70s game of blocking.
We can block the WTO because it's not
doing what we think it should.
We can block climate change.
Because we think that the West is not playing a fairness game.
But I think the West has gone beyond wanting to listen
to arguments about fairness.
That's not what they want to hear.
They want to hear how can we get things done.
And hence, in all these forums, it's
increasing coalitions of the willing.
TPP is a coalition of the willing.
The Transatlantic Partition will be a coalition of the willing.
So then you are now getting marginalized.
You're being left out of these coalitions.
Now you have to decide.
Are you OK with that or are you not OK with that?
China used the negotiations to enter the WTO 10 years ago
to fundamentally reform itself.
And now when it looks at TPP, I mean
China's got all kinds of immediate worries
to sort what's happening to them, and not blow up.
But until the [INAUDIBLE] thing happened,
they were finally focusing on how do we get ourselves ready,
so that we can actually say we want to be part of TPP?
Whereas the scenario here is defensive.
No, no, no.
We don't want to.
This is intrusive.
This is going beyond normal trade issues.
It's going beyond border issues, as they call it,
into environment and labor standards.
And these are not part trade things,
and we don't want to talk about all this.
So it's a very defensive approach.
And my belief is it won't get you anywhere.
Because [INAUDIBLE].
BILL KOOSER: And it seems to me, and I
think you may touch on it, is that as India continues
to grow, if it gets to be that third, fourth, fifth-largest
economy, it will have greater influence in the world.
And needs to step up in some of these areas,
and decide what its interests are, rather than tacking on to,
yes we're going to go along with the US,
or we're going to not go along with the US,
or whatever it might be.
And really establishing here's what's
in this country's best interest, which might roll one way one
time, and then in a different direction a different time.
TN NINAN: I think we know our interests.
But we're falling short on our economic management,
and definitely are losing out.
I think the way we run our defense system is hopeless.
The important decisions on hardware
are consumed by scandal and blacklisting,
and endless delays.
The domestic development of production programs
are subject to endless delays, and then probably no product
delivery at the end of it, in some cases.
So, either way, you are-- I mean everybody,
I think, is slowly becoming more and more conscious of the fact
that our defense forces are simply in no shape
to actually get into a fight, if you have to get into a fight.
Because you haven't got a modern rifle.
You haven't got nitrogen fighting capabilities.
You don't have an air defense environment.
Your destroyers and frigates don't
have anti-submarine helicopters on them.
Because you haven't ordered the helicopters.
You don't have long-range missiles
because you're still developing them as well.
Meaning these are ships that can't fight.
They look wonderful.
10,000 ton destroyer on the sea.
But the damn thing can't fight.
BILL KOOSER: We'll call it destroyer
for peace, or something.
TN NINAN: Yes, somebody wisecracks,
saying it's the most peaceful navy in the world.
BILL KOOSER: A peaceful navy.
That's right.
Interesting challenges.
Well, thank you very much.