'India has a tendency to fear competition'

The fourteenth Annual Conference on Indian Economic Policy Reform held at Stanford, California discussed the 'Economic performance of India's states'.

"The government has become disillusioned again in the past couple of years. I see more factionalism," Nicholas Hope, Director of the Stanford Center for International Development (SCID) told Rediff.com on the sidelines of the Fourteenth Annual Conference.

Responding on can India do a little better than it is doing with GDP at 5 per cent, Hope said, "Yes, absolutely but India needs much more deregulation. I still see a tendency in India to fear competition."

Some of the bright companies are so successful internationally and have demonstrated how effectively India can compete just as Indian entrepreneurs from Stanford University has shown that they could be very successful.

More competition in India would promote much faster productivity growth and much more effective use of resources and create many more good jobs.

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"I have always been pessimistic about India and thought I would never want to work in India when I was with World Bank because so many brilliant people that I knew, Indian economists didn't seem how to do any good," said Hope who served at the World Bank from 1977 to 2000.

"I was skeptical when things turned to improve five years ago," Hope said.

"One thing that mystifies me is that some states have been doing well since the last ten years while other states are not following the policy of the successful ones," said Hope.

The conference is attended by academicians, policy makers and the business community to exchange ideas on significant issues.

N K Singh, Member of Parliament (Rajya Sabha), who led the India delegation at SCID conference told Rediff.com, "It began with the motivation of lot of people when they felt that the US universities have lost research interest in India. Also we found Silicon Valley has a vibrant group of TiE entrepreneurs and we believed we could bring together academics, Indian policy makers and corporates to make key economic reform that was necessary in India. So earlier years we really did a lot of work that had influenced policy in India."

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Giving example of the positive impact of the Indian Economic Policy Reform, he said there is reform in telecom, substantial changes in banking reform, small scale industry has been debated and discussed.

Telecom sector underwent series of policy changes that improved the sector's productivity, competition and enabled deregulation.

Telecom played a very important role in India's economic growth story. The country that had hard time getting telephone lines, has 900 million cell phone users today.

Academia becomes relevant if it shapes policies which are for the better welfare, so the idea is to improve the quality of life of people.

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N K Singh said, "Bihar is an idea whose time has come," in the last 7 years there has been path breaking changes that has taken in Bihar. In terms of growth and improvement of heath, education, infrastructure it has achieved progress, but we have lost lot of time and so we still have enormous challenges to address. It's a case of glass half-full or half-empty.

Venkatesh Shukla, TiE (The Indus Entrepreneurs) silicon valley an attendee at the conference told Rediff.com, "TiE keeps an eye because it is deeply interested in what goes on in India, whether it is policy or about well being of the people. SCID is also a TiE creation. TiE is not just a narrow technology focused. It's about creating wealth and helping the community."

"The federal structure in India is really taking roots. During Mrs. Indira Gandhi days everything was centralised. Now bulk of action is taking place in states. However, the next stage of decentralisation has not taken place in India. The democracy has stopped at the chief minister's door. It has not gone to the community, city or municipal level like it does in the United States," Shukla added.

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Stanford is a safe place for policy makers to attend debates. Policymakers in India are always in the eyes of press, so they never speak their mind. Here they have an environment where they can debate policies. Stanford has a high prestige intellectual center. It provides high quality platform for people to engage in debates.

"I definitely have lost interest, I don't see it as I used to see," reiterated Rekhi and added his idea of starting conference is just to provide intellectual frame work.

He said that India is receptive to outside ideas for the past few years. The problem was there in the beginning. The congress party is very unreceptive to any outside ideas.

In the past, the conference has been attended by Prime Minister Manmohan Singh, Union Finance Minister, P Chidambaram and Yashwant Sinha, Former Finance Minister and Foreign Minister.