Kalam for 10% GDP growth

President Kalam highlighted the following sectors as being the most important ones to uplift the 260 million people of India from below the poverty line: agriculture and food processing, reliable and quality infrastructure, education and healthcare, information and communication technology, and the development of strategic sectors. He also stressed on the importance of micro-financing in being able to accelerate the development process.

The most interesting point was the observation that 50% of the population is below 25. This is surprisingly different from the ageing populations of countries like Germany, and indicates the tremendous amount of youthful workforce in the pipeline, which should be leveraged. President Kalam proposes creating two cadre of people: skilled youth with special skills who can drive the manufacturing industries, and youth with higher education who can drive the IT and other production sectors. Is this something like a fascist approach where the government tells people what to do? Well, even if it is, we know that it worked very well in the past with other countries, and if it can be exercised even loosely in the Indian democratic system, transparently, then it surely makes a lot of sense.

CII highlights the importance of manufacturing to achieve these high GDP growth rates, and also cites skill development as one of the most important to-dos. However, it is not the only to-do and there are many other stakeholders as well. The government needs to revise policies for more flexible labor laws, and cost and access to credit. The infrastructure needs to be improved. And most importantly, new technology needs to be developed.

This last point on research and development in technology has been highlighted in another article as well. We are doing well in the services sector, and hopefully we will continue to do well if the infrastructure is improved and skilled labor is available. But what about the products space, that is, new products to manufacture, and technology to make this production more efficient? The revenues from services are linear in terms of the number of employees, but it is product development that makes these renevues exponential. At least in IT, we are gradually moving to a stage where we can leverage the expertise we have gained from services, to innovate and develop product companies. The same should be done for manufacturing too, just like what China did. The time is ripe and all the investment is already coming in for the sectors of chip manufacturing, networking equipment, automobiles, telecommunications, and consumer electronics. We need to view these developments in not the present tense, but the future vision of gaining expertise and then leveraging it to manage our manufacturing sector ourselves.