At the Gartner summit India held on July 17, Infosys Chairman and Chief Mentor N R Narayana Murthy discussed the role Information Technology plays in creating a developed India with Gartner Asia-Pacific Vice-President Bob Hayward; Research Vice-President (India) Partha Iyengar and Vice-President and Chief of Research (Asia-Pacific) John Roberts. We have great honour in reproducing the transcript of that discussion for our readers.

Partha Iyengar: Mr Murthy, you've, in your keynotes, likened India to a family of two children, one a gifted child and other, a less privileged child. Can we have your thoughts on that?

N R Narayana Murthy: I've used this analogy about India in discussing the issue of embracing modernity, progress, encouraging its merited ones, with my politician friends. Quite often their reaction is, all these people who are in the urban areas and get better education. Don't need much encouragement and we need to ensure that the poor children are taken care. To the determent of theses smart children, whether we like it or not, there are two Indias, there is the urban India, where the child is informed about what's happening in the world, on the other hand, we have rural India, where the child is hapless, undernourished and uneducated.

If we want to solve the problem of poverty in this country, then we have to encourage the gifted child to make the whole family better. Then it becomes the responsibility of the privileged to make sure that the rural child also gets benefits. That's what the politicians have to understand, both here and in the world.

John Robert: To extend on that, does the government need to be market driven or should it be control driven?

N R Narayana Murthy: I firmly believe that the role of the government will have to be limited to areas that affect the citizens. Defence, monetary policies, external affairs, internal security. Most of the areas of the economic activity must be left to the citizens.

However, in the rural areas, where the market is not developed, the government should provide subsidy to the rural masses by way of vouchers, they can then go to the marketplace and use it, that way there will be no corruption, the citizens will have a choice to go to the best player, whether it's primary education or healthcare and this will bring in fairness in the system.

Partha Iyengar: Which technologies and companies in rich India can have a beneficial impact on rural India?

N R Narayana Murthy: I won't take the name of any specific company since it's not fair. I think every company, big or small, has a responsibility to make sure that the benefits of IT percolate down to the masses. This could be done by foundation activities or by helping the government develop better infrastructure and facilities. We need to create case studies where technology can benefit masses. For example, NASSCOM conducted an experiment seven years when they brought a taxi driver in Bombay in contact with his family in Azamgarh, UP, by videoconferencing. The joy on the face of their family seeing their member on television was something that's worth a million dollars.

We need to bring the power of IT to focus by way of new case studies. Then that will be noticed by people, politicians and bureaucrats alike.

Bob Hayward: Why don't we see tangible benefits of the advancements made in IT by India translating into better infrastructure?

N R Narayana Murthy: I've often said that while portfolio investments are good, they leverage the power of the Indian entrepreneur. We need that, but more important than that is FDI, which come as equity or long-term goals. If you want to let FDI come in a significant way, our people will have to create visible signs of progress to create confidence in our foreign investors, something which China is doing.

Bob Hayward: How important is IT right now in India's development?

N R Narayana Murthy: We all agree that IT reduces cost and time to market and improve productivity. Once we all agree on that, there's no doubt that IT has a very important role to play in nation building. We've all seen how IT, in the last couple of decades, has contributed significantly to improve the productivity, from 1.4 percent, then to 2.5 now. They say a part of it is because of IT. Now, what should get more priority, IT or other instruments of growth? My view is, let government not put money in this, let it make it very easy for FDI to come into the country.

As long as we control and are suspicious of what comes in then it's very unlikely that we get what we want. So the bottom line is, make it easy for these investments to come, in whatever sector there is.

Bob Hayward: Why is the issue of whether FDI is good for the country or not still debated here? Why is it still not resolved?

N R Narayana Murthy: Actually, there are two hilarious concepts in India. One is called MAFA, Mistaking Articulation For Accomplishment. The second is, when we say in India, all said and done, what we really mean is, everything is said and nothing is done. Like it or not, we are a debating society. Just as other countries like Brazil, China have done, we have to say enough is enough and now it's time for action.

Otherwise, we will continue to be a MAFA society.

Partha Iyengar: Do you believe in the school of thought that domestic industry is not supported enough and all attention is given to exports? What is your advice to the domestic IT industry?

N R Narayana Murthy: Every company tries to maximize its profits and revenue. In the G-8 countries, the opportunity for revenue and profits is much higher than in India, so perhaps the top few IT companies may focus primarily on the export market. But it doesn't matter. I say let somebody else look at the opportunity in India. We don't have to say we will focus on the domestic market to the exclusion of the exports market. Let a thousand flowers bloom. The right approach would be to let all competent people succeed in all the markets, domestic or global.

Part II: Narayana Murthy on leadership