Sean Lloyd






International relations


Sep 2018 - May 2020

By Sean Lloyd

Ideas of India: where past and future collide

Namaste! As I wrote in my last blog, the third module of our course was also our first international module – in Mumbai, India. The course, part of the “Global Rules of the Game” series, focused on India’s emergence as a significant economy and what this meant for business – both foreign businesses investing in India, and for Indian businesses going outwards. For me, it was my second visit to Mumbai, the first was as a tourist in 2013.

Streets of Mumbai

India’s economy has a couple of surprising feature for the uninitiated – firstly, that its economic growth has been built on the services sector rather than the manufacturing sector (think Tata, Infosys, Wipro) and secondly that, despite its sheer size, India has a very obvious “missing middle” – the mid-sized companies that are often the engines of growth in an economy. Due to a range of historical legacy issues from the pre-liberalisation era, and continuing strict labour laws, India’s companies are a dichotomy of small, almost cottage, industries and mega-corporations such as Tata.

One area that particularly interested me – and many of the cohort – was Modi’s introduction of a requirement for companies to spend 2% of their net profits on corporate social responsibility (CSR) initiatives. Naturally, this is a controversial scheme. The economic rationalists would argue a company’s sole social responsibility is to generate profit, not run social development programs. The development activists would argue it should be greater. Whatever you believe, we are undoubtedly in an era where “big business” has never had a poorer reputation and the leveraging of arbitrage opportunities in developing countries by multinational corporations has led to a range of negative externalities. Many companies are paying at least basic heed to incorporating CSR into their activities to improve their public relations.

Soccer with street kids at Vatsalya Foundation

So does mandating a specific level help? The bureaucrat in me says “yes, but…”. Having worked alongside development programs – both Australian and others – for much of my career, it is a truism that the more aid money you apply, the more opportunities there are for corruption and wastage. This is not to say development aid isn’t needed and important, but every organisation has an absorptive capacity and without proper planning, strategy and process, all the good intent in the world can end up without a good result. So as much good as this initiative can do, it also needs to align company CSR initiatives with their relevant corporate expertise and India’s social development priorities, and be rigorously monitored. Without those principles, there are surprisingly large downside risks for the scheme.

At the end of the week, then, what sort of impression were we left with about the future of India? We were asked to consider whether India would collapse under the weight of its own contradictions, or become the next global superpower. Maybe my background makes me less extreme in predicting the future, but I thought the answer was neither. India has many things going for it – a coming demographic dividend, a lot of easy wins on economic reform that will accelerate growth, a significant opportunity in improving educational outcomes and an IT acceleration that will open more opportunities for all.

Visiting IBM India

Equally, my impression was that India is not always the sum of its parts – it is more like an aggregation of at times wildly varying state economies in an overall federal structure. India’s diversity is a challenge as much as it is a strength – the multiplicity of interest groups means reform is tough work. That tendency to introspection means that India’s global weight is not necessarily what it could be. So for me, India will continue to do what it has done since independence – progress, in its own time, in its own way, not seizing every opportunity on offer but doing enough to ensure that its track remains upwards. Perhaps it’s not the most inspiring prediction – but it also says something about the profound resilience of India as a nation.

So as we head into the holiday season, India has given us a lot to reflect on – and also plenty of laughs as the Indian team in our cohort introduced the finer side of Indian culture to us over a few repeats of Panjabi MC… I look forward to resuming the adventure in January. Acchi sehat ke lie! (Cheers).


Author’s note: The views expressed in this blog are my own and not as a representative of the Australian Government.

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