'India was the greatest wastage of manpower'

The human spirit demands economic development. Betterment of one's livelihood is something that every person -- be it Chinese, Indian, American, whoever -- demands.

India has just gone through such frustrating times for so long that finally, perhaps, some people are waking up!

There are two groups of people who I would like to single out for this.

Number one is the present government. I have known (Prime Minister) Manmohan Singh and (Planning Commission Deputy Chairman) Montek Singh (Ahluwalia) for perhaps close to a decade. They are people I truly respect.

These people being back in power -- particularly Manmohan Singh being the prime minister where he has a lot more influence on things than just as finance minister -- has helped set the course for the country in some ways.

Can it be reversed? You are a democracy, which means that the next government can be somebody else. Well, history tells us that it can be reversed.

However, if enough people in the society become stakeholders -- beneficiaries -- then you tend to have the effect of ratcheting in the society. In a way that you can ratchet it up to some point when it cannot go back the other way.

That's what I would like to watch. To see how many more years people like Manmohan Singh and Montek Singh are in power -- would they be able to change Indian society in a way that makes reforms irreversible.

China, forgive the comparison, started their reforms in 1979. It was not until 1996 that I was more or less convinced that the process of reform has become irreversible.

In this country, I am still watching. But I think you have a good start with these government leaders.

Number two, the private sector.

I have known many of the leading businessmen in this country over the last 12 years and I have tremendous respect for them. They had to work in an environment that is very hostile. Not outwardly hostile but just in petty bureaucracy and what have you.

It seems to me that the private sector somehow -- probably in collaboration with the government -- has been able to have some form of breakthrough that I have not seen before.

Finally, an anecdote, which may seem minor, but which still looks hopeful. I got out of the airport, and I saw the roads full of Tata cars.

Ratan Tata and I have served on the board of the East West Centre for many, many years. And now he has joined the board of my alma mater the University of Southern California.

I have known him for many years, I have tremendous respect for him, but frankly, the Tata cars in the old days left a lot to be desired.

I was very pleasantly surprised -- I hope to see Ratan tonight and I will tell him that -- that his cars are now looking very good! As beautiful as Indian men and women!

So, things are changing.

This tipping point of no return from reforms, when do you see it happening?

I really don't know. You cannot in these kind of things apply the experience of another country. There's no need to. It could be a lot faster (than China). China has had 40 years of Communism.

Did that help?

As far as economic development was concerned that was horrible! And also to overcome the mindset is a very difficult thing.

But let me tell you another thing. In China, I travel around the country a lot. And in almost all places I visit, the benefit of the economy opening has filtered down to them someway, somehow, somewhere.

That is very critical -- especially in a country like India -- that enough of the stakeholders are benefited from it.

So what I would be watching is not just reforms -- the business community, they never had a problem; the government, sometimes they had a big problem, sometimes (they were) very good -- but the man on the street. About how he feels about the reforms. After all, they have a vote.

The natural tendency of the man on the street is to vote for his short-term good. Even in advanced democracies like in Europe or America, voters vote basically for their short-term good -- except in extraordinarily painful times.

In this country you have the same situation. And you have to somehow get the man on the street, the farmer in Bihar or Chhattisgarh, to feel that 'I am a beneficiary (of reforms).'

The Chinese with 2,000 years of Confucianism have a strong commitment to better the livelihood of their children at the expense of themselves. I think that was very critical to the reform in China.

Is that the case in India? I don't know enough.

It is, because most Indians will probably vouch that their parents always say, 'Everything we did was so that you could have a good future.'

I don't know enough about this country's historic-cultural tradition, but taking your word, I would say it is absolutely critical.

Because if a society -- a society that is economically not advanced yet -- only looks at the short term, then you have some problem.

What is your take on the India-China relationship? Is it rivalry or competition?

I think the relationship is so nascent that it's difficult to say one way or the other. I cannot but think that there will be plenty of competition.

Both are developing economies, both are doing now a lot of manufacturing, IT companies are starting offices in mainland China. Narayana Murthy of Infosys told me a couple of years ago that he goes to China every year, sometime two to three times a year.

My point is that one should look at economic competition in a very cool and unemotional way. Everybody competes with everybody in something -- so what? We can be competitors and we can be friends.

In some way we can collaborate; in other fields we can compete. If it has to be, it has to be. It's too early to say about our business relations, but objectively speaking I have my concerns.

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Do you agree with the view that democracy in India makes reforms profound and brings in less disparity in society than it is in China?

I would not agree at all.

India was never unified under one ruler anytime in its history. With all the dialects and all the languages, democracy is the only thing that will work here.

For 2,500 years a ruler is ruling China. The Chinese will have to chalk out their own course. In China government-led reforms has reached the people. So let us not be childish and ask which is better. It is meaningless.

(American basketball star Yao Ming (who is Chinese) cannot do what I can do, I cannot do what Yao Ming does. Who is better -- that is ridiculous. Tell Yao Ming to do gymnastics, tell me to do basketball -- it's ridiculous. Let's be men, let's not be boys!

Besides the predictable answer of infrastructure, what are India's problem areas?

Ideology. Socialism is still ingrained in the minds of many in India. The fact that you have democracy means that the policy of one group can be voted out the next time. This also means that politicians will have to be hankering for votes. These are the realities of democracy.

And that does not say anything good or bad about another system.

So, while saying that you are good doesn't mean that I am bad. So if you are bad, doesn't mean I am good. You are you, I am me!

I think India has many things that have to be worked out and improved upon.

Like?

Your government's bureaucracy is not workable -- it is stagnant.

As someone said, the Chinese judicial system is over-politicised and the Indian judicial system is overburdened. So, both have their problems.

Half of your working population -- women -- are not given the chance and they role they ought to play. You have to give them education and career opportunities -- much more than it's given now.

People say that since India has many young people so you will do better. But population can be a huge burden as well. How do you feed so many and teach so many? How do you raise per capita income? It's not just about money, it's about raising capital.

Is the India-US nuclear deal making China uncomfortable?

(Newsweek editor) Fareed Zakaria, in his March 6 Newsweek article, wrote that many Indians ask 'why is America so nice to us?'

He didn't give the answer.

Of course, America will tell you that this is not aimed against China. But if you believe it then you must have been born yesterday.