A recent Indian best seller had used the metaphor of the hare and tortoise to describe the race for economic supremacy between Asian giants China and India. While the prediction was that this would be a race for one of the participants to lose, recent developments have shown that both players are choosing the path of inclusive growth to create sustainability in their racing strategies.
Pranab Mukherjee's recent budget rightly placed emphasis on the rural sectors with enhanced allocations to education and healthcare in an attempt to include half a billion and more Indians who are in danger of being disenfranchised if growth is restricted to the cities where capital intensive manufacturing and services growth is happening. With a looming fiscal deficit and the spectre of continuing inflation this is going to be a watershed year for the Indian tortoise to demonstrate that it can gather speed on a rocky path
The Chinese approach articulated recently by Premier Wen Jiabao in his recent annual parliamentary address continues to lay emphasis on innovation to boost its high-tech and service sectors with research and development budgets raised to 2.2 percent of its GDP in China's own race to close the gap with the world's largest economy the USA
China's own attempt to enable inclusive growth and "effectively solve problems that cause great resentment among the masses" as self-styled reformist leader Wen said, would be contain inflation to 4 percent or less in spite of soaring food prices worldwide and reduce the fiscal deficit while increasing medical insurance coverage and allocating 30 percent higher funds for low-income housing and enable the creation of over 9 million new urban jobs this year. China targets to create over 45 million new jobs by 2015 through a balanced economy that lays more emphasis on domestic consumption and make increasing employment the "foremost objective of economic social development".
The message for the IT Services industry in this country is loud and clear. With most of the tax and other sops for exports having been withdrawn and the Government’s obvious focus on domestic innovation, companies would be well served to focus sharper on the myriad opportunities that exist and will emerge in the local context.
Some of the major e-Government initiatives are being assiduously chased already by the IT majors and NASSCOM’s efforts in the last year or so to work closely with the Ministry of IT to streamline the tendering and procurement processes has led to some easing of the process even for smaller firms. The Mission Mode projects have gathered momentum with central push and quite a few states have pushed aggressively forward with initiatives like power reforms, UID and Sarva Shiksha Abhyan and shown the willingness to empanel smaller vendors in consulting and implementation of these initiatives.
One area where one hopes to see significant movement in the coming fiscal is the implementation of connected services within and across states. The major new outlays for skills development and education and the commitment towards the setting up of a National Knowledge Network should see a new thinking emerge on the role of technology in connecting skills development centers and leveraging quality content and trainers across a much wider audience by video conference, satellite education and asynchronous knowledge sharing mechanisms. Local municipal schools which are in shambles in most part of the country would get the much needed quality fillip if technology could convert the role of teachers to facilitators, a process which has been implemented with great success in neighbouring countries like Singapore, Malaysia, Jordan and even Qatar by India technology firms and is sorely needed in our country.
The same opportunity beckons for healthcare, where telemedicine experiments have already succeeded but the appetite has been wanting to develop a district wide or state wide IT enabled diagnostic and counseling service, a process where Government, large public and private hospitals and technology providers could play symbiotic roles to the great benefit of the “aam aadmi” who has been suffering for lack of quality medical care.
The other good news is the long awaited clearance of the project to set up twenty new Indian Institutes of Information Technology on a PPP mode which would substantially add to the capacity in an industry where major software companies still depend on extensive internal training or partnerships with private sector skills developers to compensate for the woeful lack of quality in technology education in most colleges in the country. With the export markets opening up, the planned investments in domestic consumption and the easing of the skills situation, the IT industry should look forward to a year of robust revenue growth even if spiraling costs put pressure on bottom lines.
In the larger context, it is interesting that while India is increasing its five year growth target to 9 percent, China is reducing its scorching pace to 8 percent for the same period. We have wise men at the helm in both countries and an emerging consensus among all eco-system participants and it might well turn out to be to be a win-win race where both the hare and tortoise will waltz across different finishing lanes with enormous implications for the rest of the world !
