Business India Sunday, 21 Mar 2010 Page# :163 Size : 483.51 sq.cm.

B U S I N E S S I N D I A March 21, 2010 V

uiDeocon iii immation with I JET AIRWAYS

I 'ISIH 111 S I M . S S M W OFTHEYHAR

A n e v e n i n g t o r e m e m b e r

T h e m e m b e r s ' e n c l o s u r e of t h e Roya l W e s t e r n I n d i a Tur f C l u b , o n 2 2 F e b r u a r y 2 0 1 0 , w a s gra t i fy ing ly full, e v e n t h o u g h it was a w e e k d a y e v e n i n g . It was t h e d a y of Business India's 2 8 t h B u s i n e s s m a n of t h e Year 2 0 0 9 p a r t y . A n d l ike

every year , t h e b u s i n e s s f r a t e r n i t y s h o w e d u p i n full s t r e n g t h , t h i s t i m e t o fe l i c i t a te A d i t y a Pur i , m a n a g i n g d i r ec to r , H D F C Bank , t h e w i n n e r of t h e a w a r d . His a c h i e v e m e n t : l o g g i n g a s t e a d y 2 5 - 3 0 p e r c e n t g r o w t h , wi th net profi ts of 40 per cen t o n a c o m p o u n d e d basis , for t h e p a s t 10 yea r s . He h a d d o n e t h i s e v e n i n a y e a r w h e n f inanc ia l m a r k e t s across t h e w o r l d h a d b e e n in s h a m b l e s . A n d - w i t h h i s fami ly f o r m i n g a g l o w i n g arc a r o u n d h i m -it l o o k e d like h e h a d d o n e it w i t h o u t sacr i f ic ing a h e a l t h y work-l ife b a l a n c e e i the r .

To h o n o u r h i s u n i q u e success , S h a s h i T h a r o o r , m i n i s ­ter of s t a t e for ex t e rna l . a f f a i r s , f lew in g r a c i o u s l y f r o m

D e l h i , s p a r i n g a few h o u r s t o b e t h e ch ie f g u e s t for t h e e v e n i n g . A u t h o r a n d h u m a n r igh t s a d v o c a t e , T h a r o o r h a s b e h i n d h i m a s te l lar ca reer as t h e U N u n d e r secre ta ry gen ­eral for c o m m u n i c a t i o n s a n d p u b l i c i n f o r m a t i o n a n d was I n d i a ' s official c a n d i d a t e for t h e p o s t of s ec re t a ry gene ra l a t t h e U n i t e d N a t i o n s . His p r e s e n c e a d d e d c a c h e t t o t h e e v e n t . H e g ree t ed c a p t a i n s of i n d u s t r y , c o n g r a t u l a t e d Puri a n d w a s i n t r o d u c e d t o t h e B u s i n e s s m a n of t h e Year 2 0 0 8 , P.R.S. O b e r o i , b e f o r e t a k i n g h i s p l a c e n e x t t o t h e o t h e r d i s t i n g u i s h e d p e r s o n a l i t i e s p r e s e n t .

W a i t i n g in a n t i c i p a t i o n t o h e a r h i m a n d o t h e r s speak w a s a 1 , 4 0 0 - s t r o n g a u d i e n c e . It i n c l u d e d t h e l ikes of D e e p a k Pa rekh , S. R a m a d o r a i , H a r s h G o e n k a , H a r s h Mari -wa la , H a r s h N e o t i a , A n s h u m a n Ruia , G u n i t C h a d h a , H e m e n d r a Kothar i , A r v i n d S h a r m a a n d S a m Balsara. Also i n a t t e n t i v e a t t e n d a n c e w e r e Pur i ' s wife , Smi l ey , a n d d a u g h t e r A m r i t a , w h o sa t n e x t t o Pur i t h r o u g h o u t t h e

164 .

128* Bl'SINKSSMW OFTIIF^FAR

evening. In a v i s ib le s h o w of s u p p o r t a n d s h a r e d g lo ry , several m e m b e r s f r o m H D F C B a n k ' s t o p brass , s u c h as Paresh S u k t h a n k a r , B h a r a t S h a h , J a g d e e p K a p o o r a n d Harish Eng inee r w e r e a lso p r e s e n t , m a k i n g it a n e v e n i n g to r e m e m b e r for t h e w i n n e r .

The e v e n t w a s f lagged off w i t h a s h o r t film o n Pur i . Concep tua l i sed b y P e s h o W a d i a w i t h t h e a s s i s t a n c e of Vivek Shah ' s C u t t i n g C r e w s t u d i o a n d s h o t b y P a l a s h r a n -jan Bhaumick , t h e fi lm c a p t u r e d Pu r i ' s zes t for life a n d c o m m i t m e n t t o w a r d s f ami ly a n d socia l causes , a p a r t from h i g h l i g h t i n g h i s p r o f e s s i o n a l a c h i e v e m e n t s . T h e magazine 's p u b l i s h e r A s h o k A d v a n i t h e n t o o k t h e da i s , welcoming t h e gues t s a n d r e c o u n t i n g Business India's r i ch reputat ion as a f o r e r u n n e r in i n s t i t u t i n g t h e s e a w a r d s way back in 1 9 8 1 . O v e r t i m e , c o m p e t i t o r s h a v e i n t r o ­duced similar a w a r d s , b u t Business India r e m a i n s t h e o n l y publicat ion t o a w a r d o n l y o n e b u s i n e s s p e r s o n i n a y e a r and to never r e p e a t t h e s a m e w i n n e r .

The B u s i n e s s m a n of t h e p r e v i o u s year , O b e r o i , explained t h e s e l e c t i o n p r o c e s s w h i c h e n t a i l s g i v i n g a shortlist of c a n d i d a t e s t o a p a n e l of pee r s , w h o t h e n m a k e their select ion. Nex t , P h e r o z a Bi l imor ia , m a n a g i n g d i rec­tor of Business India, i n t r o d u c e d Shash i T h a r o o r , w h o p r o ­ceeded to regale t h e a u d i e n c e w i t h a n e c d o t e s a n d analogies t h a t p a i n t e d a v e r y t e l l i n g p i c t u r e of t h e I n d i a of yesteryears a n d t h e I n d i a of t o d a y , w h e r e t h e coex i s ­tence of con t r a s t s a n d p a r a d o x e s was t h e n o r m . A n d yet it is this India t h a t is we l l p o i s e d t o b e c o m e o n e of t h e largest e c o n o m i e s of t h e wor ld , n o t t o m e n t i o n t h e fastest growing. T h a r o o r u r g e d t h e b u s i n e s s c o m m u n i t y t o ge t involved in pol i t ics a n d po l i cy m a k i n g " t o c rea te a n Ind i a which we can all be p r o u d of".

He was t h e n i n v i t e d , a l o n g w i t h O b e r o i , t o h a n d over the Businessman of t h e Year 2 0 0 9 a w a r d t o Pur i . Accept ­ing the award , Pur i d e d i c a t e d it t o h i s wife for b e i n g h i s "pillar of s t r e n g t h " . In h i s speech , h e s h o w e d t h e wa ys i n which India 's fu tu re l o o k e d b r i g h t . " W e h a v e a G D P r a t e of 7.5 per cen t , l o w d e p e n d e n c e o n e x p o r t s a n d a h i g h rate of sav ings ," h e sa id . Yet d e s p i t e t h e s e pos i t ives , Pur i believed t h a t t h e g o v e r n m e n t a n d p r i v a t e b u s i n e s s e s

n e e d e d t o w o r k i n c o l l a b o r a t i o n t o a l l ev ia t e p o v e r t y . He r e c o u n t e d h o w HDFC Bank h a d u s e d m i c r o f i n a n c i n g to b e n e f i t t w o m i l l i o n p e o p l e a n d h o w t h e b o a r d h a d r e c e n t l y pas sed a n o t h e r r e s o l u t i o n t o fu r the r reach o u t t o 10 m i l l i o n p e o p l e . G i v e n I n d i a ' s s t r u c t u r a l a n d pol i t i ca l e n v i r o n m e n t , h e w a s su re it was wel l p l aced t o t ake its r ight fu l p l ace in t h e w o r l d e c o n o m y .

C o m i n g f rom a m a n of m e r i t , it s e e m e d - a n d n o t o n l y for t h a t e v e n i n g - t h a t t h e a v e r a g e I n d i a n ' s a s p i r a t i o n s w e r e in safe h a n d s a n d c o u l d l ook fo rw a rd t o f ru i t ion . •

• 165 •

l28th BUSINESSMAN OFTHE YE VR

'A world-class bank f rom scratch' V I M ! \ \ \>ILJL>

P.R.S. OBEROI Good evening, ladies and gentlemen.

Wh e n m y good friend Ashok Advani told m e t h a t I h a d to chair t he jury m e e t i n g t o c h o o s e t h e Busi­n e s s m a n of t h e Year for 2010 , I said t o myself,

"Good heavens , w h a t a responsibi l i ty!" I h a d never cha i red a jury mee t ing before. W h a t if it were a tie? I w o u l d h a v e t o exercise m y cas t ing vote . For tuna te ly , t h e jury ' s se lec t ion was u n a n i m o u s .

We he ld t he jury m e e t i n g at t h e Belvedere. T h e m e e t i n g lasted a few hours . The jury consis ted of Mr. Rashesh Shah , Mr. Ta run Kataria, Mr. Harsh Neotia, Mr. N. C h a n d r a s e k b a -ran, Mr. N. Srinivasan, Mr. M o h i t B u r m a n a n d Mr. Tejpreet C h o p r a . T h e d iscuss ion was lively. Ul t imate ly , t h e jury selected Mr. Aditya Puri as t h e Bus inessman of t h e Year.

W i t h i n a s p a n of 15 years , Mr. Puri h a s c rea ted a wor ld-class b a n k from scratch, H D F C Bank h a s b e e n g r o w i n g con­s is tent ly at 30-35 per cen t per a n n u m a n d is t h e s e v e n t h largest b a n k in t h e coun t ry , H D F C Bank is also a m o n g s t t h e m o s t prof i tab le b a n k s . It h a s de l ivered a c o n s i s t e n t 4 0 per cen t g r o w t h in ne t profits o n a c o m p o u n d e d basis for t h e past 10 years, desp i te t h e f inancial crisis t h a t h i t t h e global markets .

Mr. Deepak Parekh h a d t h e foresight t o select Mr. Puri t o start t h e b a n k . At t h a t t ime , Mr. Puri was C E O of C i t ibank , Malaysia, a n d h a d a palatial h o u s e . Mr. Deepak Parekh per­suaded Mr. Puri t o h e a d H D F C Bank. Mr. Puri s ta r ted t h e

b a n k w i t h a smal l t e a m , all v e t e r a n s i n t h e field. T h e new bank ' s a im was t o c o m b i n e a d v a n c e d t e c h n o l o g y a n d prod­ucts w i t h t h e ex tens ive reach a n d low costs of a publ ic sector en t i ty .

Like w i t h every pa ren t -o f f sp r ing r e l a t i o n s h i p , t h e bank h a s i n h e r i t e d m o s t of i ts core va lues ; it h a s conserva t ive credit policies, g o o d c u s t o m e r re la t ionsh ips a n d a good rep­u t a t i o n based o n efficiency, fairness, t rus t a n d t ransparency .

Mr. Puri very h u m b l y a t t r ibu tes t h e b a n k ' s success t o his colleagues. It is a t e a m t h a t Mr. Puri has carefully selected.

Mr. Puri is t h e e p i t o m e of a banke r . H o w m a n y bankers leave the i r offices o n t i m e a n d are yet able t o s tudy over 700 b r a n c h repor t s a n d s e n d t h e m back w i t h c o m m e n t s every single day?

Mr. Puri starts h is day at 8.30 a m a n d leaves his office pre­cisely at 5.30 p m . If h is execut ives s tay late at t h e office, Mr. Puri is n o t impressed. T h e y c a n n o t m e e t h i m because h e has a l ready left for t h e day.

Mr. Puri has c o m b i n e d his i n t e rna t i ona l exper ience wi th t h e I n d i a n e t h o s t o bu i ld a r e m a r k a b l e b a n k t h a t is o n e of t h e success stories of I n d i a n m a n a g e m e n t . Mr. Aditya Puri, h e a d i n g t h e H D F C Bank, is t e s t i m o n y t o t h e apex a p e r s o n can c l imb by da r ing to d r e a m - a d r e a m t h a t has c o m e true.

Mr. Puri is a keen golfer, b u t m o s t of t h e t i m e h e works h a r d t o bui ld t h e H D F C b r a n d . H e be l ieves t h a t service is a key di f ferent ia tor . His co l leagues a n d e m p l o y e e s say tha t , t h o u g h h e w a n t s qu ick results, h e is very h u m a n e a n d sym­pa the t i c .

Let us all c o n g r a t u l a t e Mr. Puri for b e i n g selected t h e Bus inessman of t h e Year. I a m conf iden t t h a t t h e H D F C Bank will c o n t i n u e t o g row u n d e r his l eadersh ip .

Thank you. *

• 168 •

b8ih lil SINKSSMAN OF TOE YEAR

'There's still a long way to go'

il SIM> OFTIIK

2 0 0

SHASHI THAROOR I t m a y b e a c o u n t r y r i f e w i t h p o v e r t y , b u t a M u g h a l E m p e r o r c a l l e d i t ' p a r a d i s e o f b l i s s ' . W e j u s t h a v e a l o t m o r e t o d o b e f o r e I n d i a c a n b e a n y t h i n g l i k e p a r a d i s e f o r t h e v a s t m a j o r i t y o f o u r f e l l o w c i t i z e n s

It is a p leasure t o be he r e at s u c h a s p l e n d i d occas ion a n d t o ce lebra te t h e a w a r d of Business India's B u s i n e s s m a n of t h e Year t o Adi tya Puri , t h e c h a i r m a n of H D F C Bank. It is a p p r o p r i a t e t h a t we a re d o i n g t h i s a t a t i m e w h e n

we are l o o k i n g fo rward t o a n e w b u d g e t a n d l o o k i n g back w i t h sa t i s fac t ion a t h o w w e h a v e c o p e d w i t h t h e c u r r e n t g lobal e c o n o m i c crisis. In t h e last fiscal year , I nd i a ' s gross

d o m e s t i c p r o d u c t ( G D P ) g r ew a r o u n d 6 pe r c e n t in every q u a r t e r of w h a t h a s b e e n desc r ibed by e c o n o m i s t s as "the m o s t diff icult 12 m o n t h s i n r e c e n t h i s t o r y " . In ou r most r ecen t qua r t e r , t h e figure was 7.9 per cen t . As agains t this, m o s t c o u n t r i e s in t h e w o r l d suffered nega t i ve g r o w t h rates in at least o n e q u a r t e r in t h e last t w o years .

M a n y r e a s o n s h a v e b e e n a t t r i b u t e d for t h i s success: O u r b a n k s a n d f inanc ia l i n s t i t u t i o n s were n o t t e m p t e d to b u y t h e t ox i c m o r t g a g e - s u p p o r t e d securi t ies a n d engage in t h e fancy de r iva t ives a n d cred i t defau l t swaps t h a t ruined several W e s t e r n f inancia l i n s t i t u t i o n s .

T h o u g h o u r m e r c h a n d i s e e x p o r t s d id register declines of a b o u t 30 pe r cen t , ou r services e x p o r t s c o n t i n u e d to do wel l . R e m i t t a n c e s f rom o u r ove r seas I n d i a n c o m m u n i t y r e m a i n e d r o b u s t , r e a c h i n g $46 .4 b i l l i on in 2008-09 , the b u l k of w h i c h c a m e f rom t h e h a r d - w o r k i n g blue-collar I n d i a n expa t r i a t e c o m m u n i t y in t h e Gulf.

A n d finally, s o m e 80 per c e n t of ou r G D P does n o t come f rom t h e e x t e r n a l sec tor , b u t f rom I n d i a n s produc ing g o o d s a n d services for o t h e r I n d i a n s in Ind ia .

Besides t h e s e d e v e l o p m e n t s , o u r f inanc ia l author i t ies h a v e p u r s u e d pol ic ies p r o v i d i n g for lower in te res t rates, e x p a n d e d cred i t a n d lower excise du t i e s , all of w h i c h have se rved t o b o o s t e c o n o m i c ac t iv i ty . So t h e r e is n o t much a n x i e t y in t h i s r o o m . O n e i n d i c a t i o n of t h e ex ten t to w h i c h t h e w o r l d h a s c o m e t o a p p r e c i a t e o u r e c o n o m y is t h a t , w h e n t h e f i nanc i a l crisis b e g a n in S e p t e m b e r 2008, foreign inves to r s w i t h d r e w $ 12 b i l l ion from o u r stock mar­kets ; t h e y a re n o w f l o o d i n g b a c k t o o u r e x c h a n g e s , with $27 .3 b i l l ion c o m i n g in 2008-09 , desp i t e t h e global finan­cial crisis, a n d FDI r e a c h i n g a p e a k ra te of $1 bi l l ion per week in M a y 2 0 0 9 .

M u c h of t h e c o n v e n t i o n a l ana lyses of Ind ia ' s stature in t h e wor ld relies o n th i s k i n d of pos i t ive n e w s . T h e forecasts are t h a t at least i n G D P t e r m s , I n d i a c o u l d be t h e world's fifth largest e c o n o m y b y 2 0 2 0 , after t h e US, C h i n a , Japan a n d a u n i t e d E u r o p e , a n d c o u l d m o v e u p t o t h i r d place w i t h i n a d e c a d e t he rea f t e r . So, i n t h e m i d s t of t h e justifi­ab ly c e l e b r a t o r y a t m o s p h e r e a r o u n d h e r e , I t h o u g h t it m i g h t b e h e a l t h y t o offer a b i t of pe r spec t ive .

Ind ia ' s g lobal e c o n o m i c s t a tu re is q u i t e a c h a n g e , since, as y o u all k n o w , for m o r e t h a n four decades , Ind ia suffered f rom w h a t I call t h e e c o n o m i c s of n a t i o n a l i s m , which e q u a t e d po l i t i ca l i n d e p e n d e n c e w i t h e c o n o m i c self-suffi­c i ency a n d so, largely i so la ted I n d i a from t h e wor ld econ­o m y . H e r e i n a g a t h e r i n g of b u s i n e s s m e n , m o s t people a x i o m a t i c a l l y a s soc ia t e c a p i t a l i s m w i t h f r eedom, but it w o u l d be u n w i s e t o forget t h a t t h e great leaders of Indian n a t i o n a l i s m a s soc i a t ed c a p i t a l i s m w i t h s lavery. Why? Because t h e East I nd i a C o m p a n y c a m e to t r ade a n d stayed o n t o ru le . So, o u r n a t i o n a l i s t l eaders w e r e suspic ious of

1 7 0 .

SU-.><SII, BUSINESSMAN OFTHKYFAR

BUSINESS INDIA

BUSINESSMAN DFTHEYEAR

All smiles: Pheroza Bilimoria, Shashi Tharoor, Aditya Puri, P.R.S. Oberoi and Ashok Advani

every foreigner w i t h a briefcase, see ing h i m as t h e t h i n edge of a neo- imper ia l wedge . Ins tead of i n t eg ra t ing India into the global cap i ta l i s t sy s t em, as a few p o s t - c o l o n i a l countries like S ingapo re so effectively were to d o , Ind ia ' s leaders were c o n v i n c e d t h a t t h e pol i t ica l i n d e p e n d e n c e they had fought for c o u l d o n l y be g u a r a n t e e d t h r o u g h eco­nomic i n d e p e n d e n c e . So self-rel iance b e c a m e t h e s logan , the protectionist barriers w e n t u p , a n d India spen t 45 years with bureaucra ts r a t h e r t h a n b u s i n e s s m e n o n t h e ' c o m ­manding he igh t s ' of t h e e c o n o m y , s p e n d i n g a g o o d pa r t of the first four -and-a-ha l f d e c a d e s after i n d e p e n d e n c e in subsidising u n p r o d u c t i v i t y , r egu l a t i ng s t a g n a t i o n a n d try­ing to dis t r ibute p o v e r t y . ( W h i c h o n l y goes t o p r o v e t h a t one of the lessons y o u l ea rn f rom h i s t o r y is t h a t h i s t o r y sometimes teaches t h e w r o n g lessons.)

It took a f inancia l crisis in 1991 t o p r o m p t India t o change course, w i t h l)r M a n m o h a n S ingh m e m o r a b l y invoking Victor i l ugo in his b u d g e t speech of 1991 t o say, "There is no power o n ea r th t h a t can s t o p a n idea w h o s e time has c o m e . " T h a t idea was t h e u n s h a c k l i n g of t h e Indian economy , w h i c h h a s m a d e possible e v e n i n g s like this one.

Economic re forms are h e r e t o stay, even t h o u g h t h e y are pursued wi th t h e u n d e r s t a n d a b l e h e s i t a n c y of d e m o c ­ratic g o v e r n m e n t s l o o k i n g c o n s t a n t l y over t he i r e lec tora l shoulders. Today, e c o n o m i c re forms r e m i n d m e of t h e old saw about Indian d i p l o m a c y : it used to he said t h a t I n d i a n diplomacy was like t h e l o v e - m a k i n g of a n e l e p h a n t - it was conducted at a very h i g h level, a c c o m p a n i e d by m u c h bellowing a n d t h e resul ts were n o t k n o w n for t w o years .

T h a t is n o longe r t rue , I a m glad to say, a b o u t Indian d ip lo­m a c y , b u t it m i g h t still be t r u e of m a n y I n d i a n e c o n o m i c reforms, w h i c h are p r o m u l g a t e d from o n h i g h wi th m u c h fanfare a n d t h e n take an age to b e i m p l e m e n t e d , because of all t h e v e s t e d in t e res t s a n d obs tac le s t h a t h a v e to be o v e r c o m e . But t h e n u m b e r s d e m o n s t r a t e clearly t h a t eco­n o m i c l i be ra l i s a t ion in a g loba l i s ing wor ld has c h a n g e d t h e I n d i a n e c o n o m y irreversibly.

It's just as well t h a t 1 evoked t h e e l e p h a n t , since I wro te a b o o k in 2007 called The Elephant, the Tiger and the ('ell Phone. It is a b o o k a b o u t t h e t r a n s f o r m a t i o n of India, a n d two-t h i r d s of t h e t i t le is p e r h a p s se l f -explana tory . 1 begin t h e b o o k w i t h a Panchatantra-type fable abou t India as a lumber­ing, s lumber ing , p o n d e r o u s e l ephan t , mi red in its o w n dust a n d m u d , covered in flies, s low to m o v e , s low to change , w h i c h in recent years, appears t o be acqu i r ing t h e stripes of an agile, l i the a n d s inewy tiger. But t h e n w h e r e does the cell p h o n e c o m e in, y o u m i g h t well ask. Well , to m e the cell p h o n e is t h e i n s t r u m e n t tha t m o s t ep i tomises th is c h a n g e .

1 g r ew u p in an Ind ia in w h i c h t e l e p h o n e s were b o t h rare a n d vi r tua l ly useless. W h e n I left Ind ia in 1975 to go to t h e US for g r a d u a t e s tud ie s , we h a d p e r h a p s 6 0 0 mi l l ion res iden ts in t h e c o u n t r y a n d just t w o mi l l ion l and l i ne tele­p h o n e s . H a v i n g a t e l e p h o n e was a rare pr ivi lege; if you w e r e n ' t a n i m p o r t a n t g o v e r n m e n t official, or a doc tor , or a jou rna l i s t , y o u m i g h t l a n g u i s h in a l o n g w a i t i n g list a n d n e v e r rece ive a p h o n e . M e m b e r s of P a r l i a m e n t had a m o n g s t the i r privi leges t h e r igh t to a l loca te 15 t e l e p h o n e c o n n e c t i o n s t o w h o m e v e r t h e y d e e m e d w o r t h y . And if y o u did h a v e a p h o n e , it w a s n ' t necessa r i ly a b less ing. 1

17

b8di BUSINESSMAN OFTHEVEXR

)Xth

Ames Fazalbhoy, S. Kumars Nationwide, honours Tharoor

s p e n t m y h i g h s c h o o l years i n C a l c u t t a , a n d I r e m e m b e r t h a t if y o u p i cked u p y o u r p h o n e , y o u h a d n o g u a r a n t e e y o u w o u l d get a dial t o n e ; if y o u got a dial t o n e a n d d ia l led a n u m b e r , y o u h a d n o g u a r a n t e e y o u w o u l d r e a c h t h e n u m b e r y o u h a d d ia l led . S o m e t i m e s y o u w e r e c o n n e c t e d to s o m e o n e else's o n g o i n g c o n v e r s a t i o n , a n d t h e y h a d n o idea you were ab le t o h e a r t h e m ; t h e r e was e v e n a t e c h n i c a l t e r m for it, t h e ' c r o s s - c o n n e c t i o n ' ( these were c o n n e c t i o n s tha t m a d e us ve ry cross). If y o u w a n t e d to call a n o t h e r city, say Delhi , y o u h a d t o b o o k a ' t r u n k call ' a n d t h e n sit b y t h e t e l e p h o n e all d a y w a i t i n g for it t o c o m e t h r o u g h ; o r y o u cou ld pay e igh t t i m e s t h e g o i n g ra te for a ' l i g h t n i n g cal l ' . But e v e n l i g h t n i n g s t ruck s lowly in o u r c o u n t r y i n t h o s e days; so a l i g h t n i n g call t o o k o n l y half a n h o u r , i n s t e a d of t h e usual t h r e e or four or m o r e t o be c o n n e c t e d . As late as 1984, w h e n a M e m b e r of P a r l i a m e n t rose t o p r o t e s t t h i s woeful, a p p a l l i n g p e r f o r m a n c e b y a pub l i c sector m o n o p ­oly, t h e t h e n c o m m u n i c a t i o n s m i n i s t e r repl ied in a lordly m a n n e r t h a t in a d e v e l o p i n g c o u n t r y , t e l e p h o n e s w e r e a luxury, n o t a r ight ; t h a t t h e g o v e r n m e n t h a d n o ob l i ga t i on to p rov ide be t t e r service; a n d t h a t if t h e h o n o u r a b l e m e m ­ber was n o t satisfied w i t h his t e l e p h o n e , h e was w e l c o m e to r e t u r n it, s i nce t h e r e was a n e igh t -yea r w a i t i n g l ist for th is i n a d e q u a t e i n s t r u m e n t !

Now, fast-forward t o t oday . W h e n I f in i shed w r i t i n g m y book, I was able t o repor t in it t h a t in April 2007 , Ind ia h a d just set a n e w w o r l d r ecord by se l l ing seven m i l l i o n cell p h o n e s t h a t m o n t h - m o r e t e l e p h o n e c o n n e c t i o n s t h a n any c o u n t r y h a d ever es tab l i shed in o n e m o n t h in t h e his­tory of t e l e c o m m u n i c a t i o n s . Wel l , t h e b o o k w e n t off to t h e press, go t p r i n t e d a n d b o u n d , a n d a r r ived in all g o o d books to res , a n d t h a t figure was a l r eady o u t of d a t e -because in each of t h e last t h r e e m o n t h s of 2 0 0 7 , Ind ia

b roke its o w n w o r l d record , a n d in D e c e m b e r t h a t year, it sold 8.3 m i l l i o n cell p h o n e s . T h e p a t t e r n c o n t i n u e d in to 2 0 0 8 , w h e n t h e 10 m i l l i o n bar r ie r was b r e a c h e d , a n d in 2 0 0 9 , w h e n 15 m i l l i o n b e c a m e t h e n e w front ier . It will be c rossed e a c h m o n t h t h i s year . So t o d a y , in o n e m o n t h , Ind i a sells t w o - a n d - a - h a l f t i m e s m o r e p h o n e s t h a n the en t i r e c o u n t r y possessed t w o decades ago.

M o s t i m p o r t a n t of all is t h e issue of w h o carr ies these cell p h o n e s in t o d a y ' s Ind ia . Mos t of y o u he re are b o u n d to b e chauf feur -d r iven eve rywhere ; y o u can be sure t h a t your dr iver carries a cell p h o n e , a n d t h a t i t ' s h i s o w n . If y o u visit a f r i end in a De lh i s u b u r b , y o u will n o t i c e o n t h e side-s t ree ts a n istri wallah w i t h a car t t h a t looks like it was i n v e n t e d in t h e 1 7 t h c e n t u r y , u s i n g a coal-fired s t eam iron t h a t l ooks l ike it b e l o n g s t o t h e 1 8 t h c e n t u r y to iron c l o t h e s f rom t h e n e i g h b o u r h o o d ; t h e s e days , h e carries a 21s t c e n t u r y i n s t r u m e n t , a cell p h o n e , b e c a u s e in mos t p l a n s , i n c o m i n g calls are free a n d it cos ts h i m n o t h i n g to k n o w w h i c h a p a r t m e n t h a s c lo thes n e e d i n g his services.

Recent ly , I vis i ted t h e c o u n t r y farm of a fr iend in Kerala. He asked if I w a n t e d fresh c o c o n u t water ; I said yes, a n d he p u l l e d o u t h i s cell p h o n e a n d d ia l l ed t h e local t o d d y tap­per . A vo ice repl ied, " I ' m h e r e " ; we looked u p , a n d the re he was , o n t o p of t h e nea res t c o c o n u t t ree, w i t h h i s lungi tied u p at his knees , a h a t c h e t in o n e h a n d a n d a cell p h o n e in t h e o the r . F i she rmen take cell p h o n e s o u t t o sea to call the m a r k e t t o w n s o n t h e coas t o n t h e w a y back t o shore to see w h e r e t h e y c a n get t h e b e s t pr ice for t h e i r c a t ch . Farmers, w h o u sed to h a v e to s end a n ab le -bod ied relat ive o n a gru­e l l ing w a l k t o t o w n to f ind o u t w h e t h e r t h e m a r k e t was o p e n , w h e t h e r t h e i r h a r v e s t c o u l d be sold a n d at what pr ice, before w a l k i n g back to t h e vil lage t o load the i r carts, n o w save half a day ' s t i m e a n d l a b o u r w i t h a t w o - m i n u t e call o n a cell p h o n e . T h e cell p h o n e h a s e m p o w e r e d the I n d i a n u n d e r c l a s s in ways i n w h i c h 45 years of talk about socia l i sm s ingula r ly failed to do .But t he re ' s still a l o n g way to go . It h a s b e c o m e a c l i che to speak of Ind ia as a land of p a r a d o x e s . T h e o ld joke a b o u t o u r c o u n t r y is t h a t a n y t h i n g y o u say a b o u t Ind ia , t h e o p p o s i t e is a lso t r u e . W e like to t h i n k of ourse lves as a n a n c i e n t c ivi l isat ion, bu t we are also a y o u n g republ ic ; o u r rr exper t s s t r ide c o n f i d e n t l y in to the 21st c e n t u r y , b u t m u c h of o u r p o p u l a t i o n seems t o live in each of t h e o t h e r 2 0 c e n t u r i e s . Q u i t e of ten, t h e opposi tes co-exis t q u i t e cheer fu l ly . O n e of m y favour i t e images of Ind ia is f rom t h e last K u m b h a Mela , of a n a k e d sadlui, s t r a igh t o u t of c e n t r a l ca s t i ng , w i t h m a t t e d hair , ash-s m e a r e d fo rehead a n d scraggly beard , gaps in h i s t ee th and a rudraksha mala a r o u n d h i s neck - for all t h e wor ld a pic­t u r e of t imeless o the r -wor ld l i ne s s - c h a t t i n g away o n a cell p h o n e . I even sugges ted it t o t h e pub l i she rs of m y last book as a perfect cover image , b u t t h e y assured m e it was so well-k n o w n t h a t it h a d b e c o m e a c l iche in itself.

A n d yet , c l iches are c l iches because t h e y are true, a n d t h e p a r a d o x e s of I n d i a say s o m e t h i n g painful ly real a b o u t ou r society; a p lace w h e r e bu l lock carts are still an i nd i spensab l e m o d e of t r a n s p o r t for mi l l i ons , bu t whose

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Friendly handshakes: with P.R.S. Oberoi and (right) Joerg Mueller, Volkswagen

rocket a n d satell i te p r o g r a m m e s are a m o n g s t t h e m o s t advanced o n ear th .

T h e p a r a d o x e s go wel l b e y o n d t h e n a t u r e of o u r e n t r y i n t o t h e 21s t c e n t u r y . O u r t e e m i n g ci t ies over f low, w h i l e two o u t of t h r e e Ind i ans still scratch a l iv ing from t h e soil. W e h a v e b e e n recogn i sed , for all p rac t i ca l p u r p o s e s , as a l e a d i n g n u c l e a r power , b u t 6 0 0 m i l l i o n I n d i a n s still h a v e n o access t o electr ici ty a n d t h e r e are dai ly p o w e r cuts even in t h e n a t i o n ' s Cap i t a l . O u r s is a c u l t u r e w h i c h e l eva ted n o n - v i o l e n c e t o a n effective m o r a l p r i n c i p l e , b u t w h o s e f reedom was b o r n in b l o o d a n d w h o s e i n d e p e n d e n c e still soaks i n it. W e are t h e w o r l d ' s l e a d i n g m a n u f a c t u r e r s of gener ic m e d i c a t i o n for i l lnesses such as A I D S , b u t we h a v e t h r e e m i l l i o n of o u r o w n c i t i zens w i t h o u t access t o A I D S m e d i c a t i o n , a n o t h e r t w o m i l l i o n w i t h T B , a n d t ens of m i l l i o n s w i t h n o h e a l t h c e n t r e or c l in ic w i t h i n 10 k m of the i r p laces of r es idence .

Bo l lywood m a k e s four t i m e s as m a n y m o v i e s as Holly­w o o d , b u t 15 m i l l i o n I n d i a n s c a n n o t see t h e m , because t h e y are b l i n d . Ind ia h o l d s t h e w o r l d record for t h e n u m ­ber of cell p h o n e s sold, b u t also for t h e n u m b e r of fa rmer su ic ides . W e h a v e m o r e b i l l iona i res in t h e t o p 10 of t h e p re s t i g ious Forbes m a g a z i n e list t h a n a n y o t h e r n a t i o n a l ­ity; we a lso h a v e 2 6 0 m i l l i o n p e o p l e l iv ing b e l o w t h e pove r ty l ine . A n d it 's no t t h e Wor ld Bank's p o v e r t y l ine of $1 .25 a day , or Rs75 a day, b u t t h e I n d i a n p o v e r t y l ine , w h i c h in t h e rura l areas, is Rs360 a m o n t h , or R s l 2 , thirty-cen ts , a d a y - i n o t h e r words , a l ine t h a t ' s b e e n d r a w n just this s ide of t h e funeral pyre .

W e h a v e t r a i n e d world-c lass sc ien t i s t s a n d e n g i n e e r s , b u t 4 0 0 m i l l i o n of our c o m p a t r i o t s are i l l i tera te , a n d we also h a v e m o r e ch i ld ren w h o have n o t seen t h e ins ide of a s c h o o l t h a n a n y o the r coun t ry in t h e wor ld does . W e h a v e

a g rea t d e m o g r a p h i c a d v a n t a g e in 5 4 0 m i l l i o n y o u n g p e o p l e u n d e r 25 (wh ich m e a n s we s h o u l d h a v e a d y n a m i c , y o u t h f u l a n d p r o d u c t i v e w o r k force for t h e n e x t 4 0 years w h e n t h e rest of t h e wor ld , i n c l u d i n g C h i n a , is ageing) , b u t w e also h a v e 60 mi l l ion ch i ld labourers , a n d 72 per cen t of t h e c h i l d r e n in o u r g o v e r n m e n t s c h o o l s d r o p o u t by t h e e i g h t h s t a n d a r d . W e ce l eb ra t e Ind i a ' s IT t r i u m p h s , bu t i n f o r m a t i o n t e c h n o l o g y has e m p l o y e d a g r a n d total of o n e m i l l i o n p e o p l e in t h e last five years , w h i l e 10 m i l l i o n are e n t e r i n g t h e w o r k force e a c h year a n d we d o n ' t h a v e jobs for t h e m . M a n y of ou r u r b a n y o u t h r igh t ly say w i t h confi­d e n c e t h a t t h e i r fu tu re will b e be t t e r t h a n t h e i r p a r e n t s ' pas t , b u t t h e r e are Maois t insurgenc ies v io l en t ly d i s tu rb ing t h e p e a c e in 165 of I n d i a ' s 6 0 2 dis t r ic ts , a n d t h e s e are largely m a d e u p of u n e m p l o y e d y o u n g m e n .

So yes , we are a l a n d of p a r a d o x e s , a n d a m o n g s t t h o s e p a r a d o x e s is t h a t so m a n y of us speak a b o u t India as a great p o w e r of t h e 21st c e n t u r y w h e n we are n o t yet able to feed, e d u c a t e a n d e m p l o y o u r p e o p l e . A n d yet , India is m o r e t h a n t h e s u m of its c o n t r a d i c t i o n s . It m a y be a c o u n t r y rife w i t h p o v e r t y a n d p e s t i l e n c e , b u t it n o n e t h e l e s s m o v e d a M u g h a l E m p e r o r t o dec la im, "If o n ea r th t h e r e b e parad ise of bl iss , it is t h i s , it is t h i s , it is t h i s . . . " W e just h a v e a lot m o r e t o d o before it c a n b e a n y t h i n g like pa rad i s e for t h e vas t ma jo r i t y of ou r fellow c i t izens . If t h e r e were ever a case for p e o p l e like your se lves - e d u c a t e d , r i sk- tak ing profes­s iona l s - t o get i n v o l v e d i n po l i t i cs a n d t h e s u b s t a n c e of p u b l i c po l icy , t h i s is u n d o u b t e d l y it. I h e p e o p l e in th i s r o o m h a v e t h e skill, t h e t a l e n t a n d t h e w e a l t h t o m a k e a d i f fe rence in o u r socie ty , t o c rea te an Ind i a of w h i c h we can all b e p r o u d . T h a t is t h e cha l l enge before all of us. I a m c o n f i d e n t y o u will all rise t o it.

jai Hind. .

• 1 73 •

111 SINKSSMAN OKTIIKiKW

'We need to encourage microfinance'

t o t h a n k Business India, m e m b e r s of t h e jury, f r iends and co l l eagues (a lot of w h o m are he re ) for t h e i r s u p p o r t and g u i d a n c e t h r o u g h t h e years . M o s t of all, I w o u l d like to t h a n k m y wife for be ing a pil lar of s u p p o r t a n d t ranqui l i ty . Also m y d a u g h t e r for keep ing m y feet f irmly on the g round a n d I d o h o p e she n o w bel ieves t h a t I can d o s o m e things r igh t . Final ly, I w o u l d like t o t h a n k G o d for his blessings a n d b e n e v o l e n c e over t h e years .

T h e wor ld e c o n o m y has b e e n buffe ted by a f inancial cri­sis a n d p r o b a b l y t h e wors t recess ion i n l iving m e m o r y . We, in Ind ia , h a v e b e e n f o r t u n a t e t h a t t h e f inanc ia l t s u n a m i passed us by a n d at wors t , we suffered an e c o n o m i c slow­d o w n . C o n s e q u e n t l y , mos t of t h e d e v e l o p e d wor ld , while b e i n g able t o avert a crisis, is still t o s o k e its p r o b l e m s of over - l everaged i n d i v i d u a l s / g o v e r n m e n t s , c o u p l e d with asset b u b b l e s , w h i c h will t ake t i m e . Ind ia , on t h e other h a n d , w i t h a s o u n d a n d v i b r a n t b a n k i n g sys tem, coupled w i t h var ious s t imul i , fiscal a n d m o n e t a r y , is well on i t swa\ to recovery, as e v i d e n c e d by t h e e x p e c t e d <,i M1 growl h rate

ADITYA PURI B h a r a t a n d I n d i a m u s t b e l i n k e d a n d t h e u n d e r p r i v i l e g e d m u s t b e h e l p e d t h r o u g h a p p r o p r i a t e s c h e m e s . O u r f i n a n c i a l s y s t e m i s r e q u i r e d t o h a v e t h e s o p h i s t i c a t i o n o f d e v e l o p e d m a r k e t s c o u p l e d w i t h b a s e b a n k i n g

Ho n o u r a b l e min i s t e r , Shri A s h o k Advan i a n d m e m ­bers of t h e jury, d i s t i n g u i s h e d gues t s , ladies a n d g e n t l e m a n , good e v e n i n g .

I h u m b l y accept th is a w a r d o n beha l f of all m y col­leagues at Eini:c Bank. 1 w o u l d like t o t ake th i s o p p o r t u n i t y

BUSINESSMAN-OF THE YEAR

2 0 0 9

of a p p r o x i m a t e l y 7.5 pe r c e n t for FY10 a n d a r o u n d 8 pe r cent p lus thereaf te r .

S t ruc tura l ly , ove r t h e m e d i u m / l o n g t e r m , t h e o u t l o o k for Ind ia r e m a i n s b r i g h t based o n t h e fact t h a t : • 60 per c e n t of o u r o n p is d o m e s t i c c o n s u m p t i o n . • Our d e p e n d e n c e o n expo r t s is m i n i m a l , i.e. 15 per c e n t of G D P . This is n e t of i m p o r t s , w h i c h are re -expor ted . • W e h a v e a h i g h savings ra te of 36 per c e n t a n d o u r inves t ­m e n t n e e d is 38 pe r cen t . A large a m o u n t of t h e no i se re la t - , ing t o lack of cap i t a l is b a s e d o n inef f ic ient f i nanc i a l i n t e r m e d i a t i o n . • W e h a v e a y o u n g p o p u l a t i o n , w h i c h c a n be a b less ing or a disaster , b a s e d o n h o w w e m a n a g e h e a l t h a n d a p p r o p r i ­ate e d u c a t i o n , g o i n g forward. • A f inanc i a l s y s t e m t h a t is r o b u s t a n d f u n c t i o n a l a n d r e q u i r i n g o n l y d e v e l o p m e n t of a b o n d s , c u r r e n c y a n d der ivat ives m a r k e t .

T h e 8 per c e n t g r o w t h will c o m e even w i t h all ou r shor t ­c o m i n g s . But it w o u l d be f o o l h a r d y o n ou r pa r t n o t t o a i m

the re , b u t t i me l y e x e c u t i o n is key.

b. W e n e e d to r e v a m p ou r subs idy m e c h a n i s m , so t h a t sub­sidies are effective a n d r e a c h t h e i n t e n d e d benef ic iar ies . This w o u l d requ i re a change- f rom genera l t o specific subsi­dies, as well as m o r e efficient d i s t r i b u t i o n .

c. Expenditures on health and education: If we d o n o t w a n t o u r d e m o g r a p h i c d i v i d e n d t o t u r n i n t o a n i g h t m a r e , w e n e e d t o e n s u r e b e t t e r h e a l t h a n d a n e d u c a t i o n sys t em re l evan t t o c u r r e n t n e e d s , r a t h e r t h a n c rea t ing t h e babus of t h e C o l o n i a l Raj. W e n e e d m o r e p a r t i c i p a t i o n of t h e pr i ­va t e sec tor i n e d u c a t i o n , c o u p l e d w i t h e d u c a t i o n l oans t o t h e p o o r b u t dese rv ing , t o b e g u a r a n t e e d by t h e g o v e r n ­m e n t (as in t h e USA).

d. Fiscal deficit: Clearly, we n e e d to r educe ou r deficit o n a o n e - t i m e bas is t h r o u g h d i v e s t m e n t , b u t o n a n o n g o i n g bas is t h r o u g h r a t i o n a l i s a t i o n of o u r tax s t ruc ture , i.e. G S T

for a t least 10 per c e n t G D P g r o w t h ra te , w h i c h is r equ i r ed to a l leviate p o v e r t y w i t h i n a r ea sonab l e t i m e f r a m e a n d c a n be easi ly a c h i e v e d b y p r o p e r e x e c u t i o n a n d po l i t i ca l wil l . T h e areas t o e n s u r e t h i s a d d i t i o n a l 2 pe r c e n t of g r o w t h h a v e b e e n iden t i f i ed , b u t for s o m e r e a s o n (may b e ves ted in teres ts ) , w e s e e m to h a v e difficulty in m o v i n g t o w a r d s a s o l u t i o n . Specifically:

a. Infrastructure: W e have a c ry ing n e e d to m o d e r n i s e o u r in f ras t ruc ture , w h i c h w o u l d h a v e a t r e m e n d o u s i m p a c t o n t h e eff ic iency level at w h i c h w e f u n c t i o n . 1 d o be l ieve w e are o n t h e r i g h t t rack, b u t n e e d a grea ter sense of u r g e n c y . It is e n c o u r a g i n g t o n o t e t h a t t h e U n i o n m i n i s t e r for r o a d t r a n s p o r t a n d h i g h w a y s , Shri Kama l N a t h , w a n t s t o t a k e t h e b u i l d i n g of n e w roads f rom 2 k m a d a y t o 2 0 k m a day . This w o u l d g o a l o n g w a y in l i n k i n g 'Bharat' w i t h I n d i a . I a lso b e l i e v e t h a t we will p r o b a b l y a d d m o r e p o w e r in t h e n e x t t w o y ea r s t h a n we h a v e a d d e d i n t h e last five t o 10 yea r s . P l a n s for i r r iga t ion a n d w a t e r h a r v e s t i n g , e tc , are

c o u p l e d w i t h a r e d u c t i o n of a b lack e c o n o m y . T h e U I D p ro­ject is a s t ep i n t h e r igh t d i r ec t i on .

e. Energy policy (a game change): W e are a n e t i m p o r t e r of e n e r g y a n d its p r ice c a n b e a g a m e c h a n g e r for Ind ia . W e n e e d m u c h clearer de f in i t i on of o u r e n e r g y pol icy in t e r m s of self-sufficiency a n d efficiency.

f. P robab ly t h e biggest p r o b l e m we h a v e is re forms in agri­cu l t u r e . G iven t h a t 60 pe r c e n t p lus of o u r p o p u l a t i o n resides i n ag r i cu l tu re -dependen t areas, we need widespread reform a i m e d at ach iev ing efficiency in p r o d u c t i o n a n d dis­t r i b u t i o n (our yields of m o s t c o m m o d i t i e s are way be low d e v e l o p i n g coun t r i e s a n d was tes are c r imina l ) . W e requ i re l a n d reforms, tax reforms, supp ly c h a i n m a n a g e m e n t , etc .

g. Last ly, w e c a n n o t h a v e t w o I n d i a s . Bharat a n d I n d i a m u s t b e l i n k e d a n d t h e u n d e r p r i v i l e g e d m u s t be h e l p e d t h r o u g h a p p r o p r i a t e s c h e m e s .

1 7 5

111 SINKSSMW OFTIIFYFAR

IllllMII. 11III I.I

F I N A N C I A L M A R K E T S The s t ructure of t he financial sys tem in a c o u n t r y is required to reflect t he d e v e l o p m e n t of t h e real e c o n o m y . India has developed as a r ich /poor c o u n t r y a n d ou r financial system is required to have t h e soph i s t i c a t i on of d e v e l o p e d marke t s ,

1

I I j fi *

coup led wi th base b a n k i n g to m e e t t he needs of small busi­ness, farmers, etc.

P e n d i n g t h e d e v e l o p m e n t of d e b t / e q u i t y markets , the b a n k i n g sys tem is be ing asked to fulfil t h e job of the debt a n d equ i ty marke t s , banks a n d t h e g o v e r n m e n t ' s develop­m e n t role, w h i c h is no t possible.

T h e I n d i a n b a n k i n g system is do ing a good job of meet­ing t he needs of small businesses, agriculture, working capi­tal of large c o m p a n i e s , etc, a n d does no t require much repair . T h e areas t o be looked i n t o are t h e pre-empt ion of l end ing capaci ty t h r o u g h SIR a n d CRK and directed lending.

W e n e e d to e n c o u r a g e mic ro f inance a n d o t h e r such ini­t ia t ives , w h i c h m a k e a person at t h e b o t t o m of the pyra­mid self-sufficient by p r o v i d i n g c o m p o s i t e assistance across p r o d u c t s , m a r k e t i n g a n d f i nance . A loan , without h e l p i n g h i m use it p r o d u c t i v e l y , will o n l y worsen his

l o p to bo t tom: Aditya Puri with Hemendra Kothari, dspMerrill Lynch; Niraj Bajaj, Bajaj Group; jitendra Balakrishnan, mm; ami right, Madhabi Puri liuch, icu :i Securities

pl igh t . The in te res t rate is no t r e levan t as long as he is left w i t h a surp lus after p a y i n g all expense s .

in o rde r t o p r o m o t e retail l e n d i n g across t h e entire spec­t r u m of o u r p o p u l a t i o n , we also n e e d to crea te an effective a n d speedy recovery m e c h a n i s m , in t h e absence of which, b a n k s are likely t o restrict the i r l e n d i n g to t h e middle and u p p e r m i d d l e classes a n d t h e scourge of t h e moneylender will r e m a i n .

M A R K E T S Large co rpora t e s a n d projects , o t h e r t h a n tor working capi­tal , n o r m a l l y access d e b t m a r k e t s . We, in India, need d e v e l o p e d deb t , c u r r e n c y a n d der iva t ives marke t s .

W e h a v e d o n e a r easonab le job o n equ i t y markets . Here, all we n e e d is m o r e local i n s t i t u t iona l a n d retail participa­t i o n t o r educe HI d e p e n d e n c e ( w h i c h leads t o volatility).

D e v e l o p m e n t of deb t marke t s requ i res : • A l iqu id a n d efficient sove re ign b o n d m a r k e t with an arbitrage-free INK yield curve . • A l iqu id spo t m a r k e t for iNR -denomina ted corporate b o n d s . This requi res i n s t i t u t i o n a l pa r t i c i pan t s like i n s u r a n c e c o m p a n i e s a n d pi's.

176 .

_J28 th BUSINESSMAN OFTHEYEAR

• Credit der iva t ives . G u a r a n t e e of p ro jec t deb t b y b a n k s t o help i n s t i t u t i o n a l i n v e s t m e n t w o u l d b e a g o o d b e g i n n i n g . • A wide r a n g e of essent ia l der iva t ives o n INR in te res t ra tes (do n o t t h r o w t h e b a b y w i t h t h e b a t h w a t e r ; all der iva t ives are n o t bad) .

In c o n c l u s i o n , w e n e e d to focus o n c o m p o s i t e s o l u t i o n s across t h e e c o n o m i c s p e c t r u m t o e n s u r e w e m e e t o u r poten t ia l for G D P g r o w t h .

H D F C Bank is wel l p o s i t i o n e d t o take a d v a n t a g e of 8 per cent p lus g r o w t h i n Ind ia , d e v e l o p m e n t of f inanc ia l m a r ­kets a n d t h e n e w m a r k e t s , w h i c h will e m e r g e t h r o u g h t h e l inking of Bharat a n d India .

H D F C Bank h a s a capi ta l a d e q u a c y close t o 18 per c e n t (one of t h e bes t i n t h e world) , m a r g i n of 4 per cent , cu r r en t portfol io of assets w h i c h is h e a l t h y , a n d m a r k e t l e ade r sh ip in a lmos t all p r o d u c t s t h a t w e pa r t i c ipa te in , i.e. c o n s u m e r

m a k e h i m f inanc i a l l y v i ab l e b y p r o v i d i n g a n e n a b l i n g e n v i r o n m e n t for h i m t o b e ab le t o b e gainful ly e m p l o y e d a n d m e e t all h i s ob l iga t ions . W e h a v e n o w set u p a n ex ten­sive in f r a s t ruc tu re for m i c r o f i n a n c e , c o v e r i n g t h e poores t of t h e p o o r across t h e l e n g t h a n d b r e a d t h of t h e c o u n t r y . Cur r en t ly , a p p r o x i m a t e l y 40 pe r c e n t of ou r mic ro f inance is d o n e t h r o u g h se l f -help g r o u p s f o r m e d b y t h e b a n k a n d 60 p e r c e n t t h r o u g h m i c r o f i n a n c e i n s t i t u t i o n s . It is ou r ob jec t ive n o w t o reverse t h i s p r o p o r t i o n a n d i n t h e p rocess , b r i n g t h e r a t e of m i c r o f i n a n c e d o w n t h r o u g h a c o m b i n a t i o n of scale a n d efficiency.

W e w a n t t o t ake f i nanc i a l services t o t h e in t e r io r s t h r o u g h a t i e -up w i t h t e l e c o m c o m p a n i e s , co -ope ra t ive b a n k s a n d a p p o i n t m e n t of bus ine s s c o r r e s p o n d e n t s . This is n e c e s s a r y b e c a u s e o t h e r w i s e , t o avail of f inanc ia l ser­vices , a p e r s o n m a y lose a t least a day of wages p lus 25-30

With Deepak Parekh, HDFC With wife, Smiley, cousin Uday Khanna and his wife, Deepa

loans , co rpo ra t e b a n k i n g , s tock e x c h a n g e , c o m m o d i t y exchange , g o v e r n m e n t business , agr icul ture f inancing , cash m a n a g e m e n t services, foreign e x c h a n g e a n d treasury. Here, I w o u l d also like t o m e n t i o n t h a t ou r efforts t o p r o v i d e financial advice t o India ' s u p p e r class h a v e pa id off. W e h a v e n o w b e e n recognised b y Euromoney as t h e best pr ivate b a n k . I w o u l d s t rongly r e c o m m e n d y o u t ry us . W e h a v e also dou­b l ed ou r d i s t r i b u t i o n n e t w o r k by inc reas ing ou r b r a n c h e s f rom 725 t o 1,725. So, if t h e e c o n o m y grows at 8 per cen t , t he re is a G D P t o credi t mul t ip l i ca t ion by th ree . The f inancial sys t em will g r o w at a p p r o x i m a t e l y 24 per cen t a n d we will g row m u c h faster, as we are ga in ing marke t share .

We , a t H D F C Bank, t h e Board, myself a n d m y col leagues are a lso p a s s i o n a t e a b o u t e n s u r i n g t h a t we p lay ou r p a r t i n t e r m s of o u r d u e s t o society. C o n s e q u e n t l y , t h e Board h a s a p p r o v e d a p l a n t h a t targets b r i n g i n g f inancial v iabi l i ty in t h e n e x t five years t o 10 m i l l i o n families at t h e b o t t o m of t h e p y r a m i d .

W h i l e n o t t a k i n g t oo m u c h of y o u r t ime , I w o u l d like t o give y o u a brief idea of our p l ans : Microfinance: W e believe t h a t g iv ing a p o o r m a n a l o a n or just o p e n i n g a n a c c o u n t does n o t h e l p h i m . W e n e e d t o

per c e n t i n t e r m s of t r a n s p o r t costs t o ope ra t e h i s a c c o u n t or t o receive h i s benef i t s .

W e are l o o k i n g t o subs t i t u t e t h e m o n e y l e n d e r t h r o u g h a h o s t of a p p r o p r i a t e l o a n p r o d u c t s i n t h e in t e r io r s of t h e c o u n t r y , l ike l o a n a g a i n s t jewel lery (McKinsey e s t ima te s t h e s tock of p r i v a t e go ld i n t h e c o u n t r y is a p p r o x i m a t e l y 50 per c e n t of t h e F D of t h e b a n k i n g sys tem) , c rop loans t o farmers , t w o - w h e e l e r l oans , car l oans , t r ac to r loans , l oans a g a i n s t p r o p e r t y / l a n d a n d smal l b u s i n e s s l o a n s . It is i m p o r t a n t t o u n d e r s t a n d t h a t w h i l e ag r i cu l t u r e a c c o u n t s for 20 pe r cen t or so of G D P , c rops a c c o u n t for o n l y 10 per cen t , a n d t h e b a l a n c e is for anc i l la ry services re la ted t o t h e rura l p o p u l a t i o n , w h i c h also n e e d s f inance .

W e h a v e a f i n a n c e c o m p a n y t o m e e t t h e n e e d s of t h e u r b a n m i d d l e class. T h e b a n k is also t r y i n g t o t ake jobs t o t h e in t e r io r s of t h e c o u n t r y . W e h a v e set u p B P O S in Tiru-pa t i a n d Nel lore , e m p l o y i n g 700 p e o p l e .

Overal l , g iven t h e po l i t i ca l e n v i r o n m e n t , c o u p l e d w i t h t h e b l e s s i n g of G o d a n d o u r s t r u c t u r a l a d v a n t a g e s , I d o bel ieve w e are well p o s i t i o n e d to ach ieve ou r r ightful place in t h e wor ld .

T h a n k y o u for y o u r t i m e a n d p a t i e n c e . •

• 177 •