Getting India ready for the fourth industrial revolution

Swami Vigyananand of World Hindu Economic Forum is a monk on a mission. A bachelor in engineering from the Indian Institute of Technology (IIT), he, however turned down many lucrative offers and embraced monkhood. He now uses the forum on various global platforms to promote the need of the Hindus of the world to become more entrepreneurial and contribute to the country's GDP. The seventh edition of World Hindu Economic Forum just concluded last week in Mumbai. The next edition will take place in the Hague. This week's Newsmaker, Swami Vigyananandji engaged in a freewheeling conversation on a range of subjects.

How is the World Hindu Economic Forum functioning and what are your initiatives?

If the global Hindu population is around 17%, the global contribution of India's economy is not more than 3.5%. With such disparity you cannot take a large population out of poverty. In simple language, in America there are 4% people and they have 20 rotis if there are 100 rotis in the world. However, in India 16 people have three rotis. That is where we are. So our larger population is poor. Only government schemes cannot uplift such a population. So here are a few things that I do.

The Hindu businessmen should get global market access. This means that wherever there is an emerging market and opportunity the businessmen should be taken there, should be talked about, and facilitated. This will ensure their growth. One brother was running a provision store in a village. Another brother came to the city and started a supermarket. The only difference was market access. In the first conference that we had, we decided to promote Africa. Prior to that no one discussed much about Africa. It was after we discussed, the Economist magazine came out with two issues on Africa. This started off a discussion. We had two regional conferences each in Durban and Kenya. Later where businessmen went there, we studied the market place. Nobody wants to import in the African union. We urged Indian businessmen to start a processing industry which was a win- win situation for all.

Infrastructure, road, port and highway are all captured by the Chinese. We have an edge in manufacturing, medicines, culture and services. We promoted Vietnam, Myanmar as a part of our look east policy. It is an ASEAN gateway. We had a good presence there. There is a major demand for plywood and we set our industry there. So, there is an opportunity in every field. Our representative went to the Algiers and told me that we have beaten the French.

Second part of our initiative is affordable capital. You should have boot level capital, then there are angel investors. Then there are growth funds as well as distress funds. Abroad these funds help individual and hence it is easy to get money. However, that is not the case in India. We are still very much banking reliant. So, we need to develop a financial ecosystem.

The third part is that we look out for those who are looking for the money and those who have money. We make it a point to make both parties meet. This is called affordable capital.

In the 80s there was a term called the Hindu rate of growth which was not used in positive sense. From then to now, there are has been a perceptional change. How did it happen and what more needs to be done?

The credit goes to Narsimha Rao. He is the greatest Prime Minister in my opinion. The credit of today's aspirational India goes to Narsimha Rao. He undertook economic liberalisation and he unshackled the economy. He converted an economy with a 2% growth to the second fastest growing economy competing with China. We were a 300 billion economy and now we are more than a three trillion economy. We grew in every sector, captured global frontiers due to this.

After that Atalji did good work. In the first term Manmohan Singh was good but not so much in the second term. Prime Minister Modi had to face the adverse impact of that. There was no money with Modi government. He took measures like the demonetisation. There is no money even today. The NBFCs are failing and people are suggesting different ideas. Till there is no money, there won't be any growth. You need to aggregate the talent pool. So, wherever there is an affordable technology we should incorporate it. Even our businessman should be trained to adopt the technology. We try that they get the latest and affordable technology for their business. Since 90% of our business is MSMEs, our another area is technology. The last thing important is promoting enterprise and entrepreneurship. India has a lot of traditional business communities like Chettiars in Tamil Nadu, Shetty in South India, Shah in Gujarat and Seth in Punjab. Their kids are no longer in business. They are happy doing white collar jobs. If a businessman's son does a job then the business will collapse. A case in point is the Chettiar community. They were the most resourceful. The Marwadi, Maheshwaris and the Agarwals were next to them. Since India was a poor country back then, they sent their kids abroad. There were single roads, one had to convince a minister for a telephone connection. As a result, their businesses collapsed. There are only 68,000 families who are Chettiar now. Unless we bring in more youth to continue our business, our demographic dividend will be a disadvantage. These days the youth don't want to work with their fathers.

How are you going about helping the start-ups with funding and market access?

We are facilitators and look at start-ups in general in terms of their requirements. There are various ways to support, motivate and encourage the initiatives being taken up. Our focus in the recent conference was fourth industrial revolution. India missed the third revolution and we want the nation to benefit extensively from the fourth one. This requires work to be done in a few areas.

First is industry-specific specialised training and going beyond the small programmes being held under the Skill India initiative.

Second is focus on technology keeping in mind the role Artificial Intelligence, internet, machine learning etc will play across businesses in the coming years. These will have to be made affordable for our micro, small and medium enterprises (MSMEs) to integrate into their ventures. These initiatives will help in creating a conducive manufacturing environment as a result of which Indian entrepreneurs will benefit from the fourth industrial revolution thus leading to wealth creation and employment generation.

Banking and finance is another area of focus. We are working on how such institutions can support the entrepreneurial initiatives. Agriculture is another crucial area that we are working on extensively. Making agricultural activities respectable and profitable is of utmost priority.

You talked about funding concerns for Indian start-ups, but there are a good number of private investment institutions and individuals funding the ventures.

There aren't enough though. Look at the overall numbers in terms of funding being done by the angel investors in India. Compare it with the size of the Indian economy and you'll see it's too small a number. For instance, when Mark Zuckerberg came out with the initial public offer for Facebook, investors and funds picked up a large chunk and the company was able to raise $20 billion from the market. Tell me, in the recent years, which Indian company has been able to achieve such a feat. That's because India doesn't have or have managed to develop a system like that yet. That's why there is a need to create a system like that and an affordable one too. Funding in international markets is available at 3% rate of interest whereas it's nothing less than 10% in India. How will companies compete in an international market where one is getting funds at lower single digit rates while the borrowing cost for Indian companies is in double-digits.

Has your organisation taken any initiatives on making funds available to Indian businesses at affordable rates.

The funding space in India is very regulated. So we have created digital platform comprising investors looking to invest and start-ups, entrepreneurial ventures and other business promoters that are looking to raise capital. The two parties meet and explore investment or funding opportunities through our planned networking initiatives through the platform. There is no element of charging any commissions on the deals or transactions that get done through the platform. Over 500 business enterprises and 5,000 indirect beneficiaries have benefited directly through our platform. We try to see that funding happens across the sectors and have not just restricted ourselves to technology related businesses.

A lot of industries today are under stress owing to policy issues. Are you also working on any initiatives that can influence the policy matters/ decisions?

We'd put together a team of economists during the first term of Narendra Modi government. A very crisp policy document was presented but I am not sure if the bureaucrats really read it. Governments, irrespective of which party at the centre, will definitely have to work on the economic manifesto. Favourable policy framework will happen and we have already seeing some work being done by the policy makers in that area over the past few months. I think, incentivising research and development (R&D) is one area that needs to be supported and promoted extensively in India. An executive summary of the report, with all the research and references, will be submitted to the government post our recently concluded summit.

How receptive are the decision makers to various suggestions that you put forth in the reports and research material?

Bureaucracy is the biggest hurdle in India as far as getting work done is concerned. Their job and remuneration is fixed/ certain irrespective of whether they perform or not. And to top it all, there is absolutely no accountability of what they are doing or not doing. If India needs to move forward, Prime Minister Narendra Modi will have to take very crucial decisions in the area of judiciary and administrative reform. How will he do it effectively is something that will have to be figured out though. That's what is holding India in terms of progress and that's a big challenge.

PLANNING PROGRESS

World Hindu Economic Forum

Bureaucracy

The Hindu businessmen should get global market access. This means that wherever there is an emerging market and opportunity the businessmen should be taken there, should be talked about, and facilitated. Second part of our initiative is affordable capital. The third part is that we look out for those who are looking for the money and those who have money. We make it a point to make both parties meet. This is called affordable capital.

Bureaucracy is the biggest hurdle in India as far as getting work done is concerned. Their job and remuneration is fixed irrespective of whether they perform or not. And to top it all, there is absolutely no accountability of what they are doing or not doing. If India needs to move forward, Prime Minister Narendra Modi will have to take very crucial decisions in the area of judiciary and administrative reform.