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Re: Puneet's response: misdirected: Re: Indiresan: a critique (fwd)


As Puneet mentioned, it is a combination of number of things to set an stage for innovation to occur and industry to grow. Smaller  and efficient government is the first step. Tax breaks, infrastructure and political will to make India a better country is the next second step.

I am not so sure if government must invest its own money for every sector to grow. What is more important in my opinion is that government should provide a equal playing field. I think we have invested billions of rupees in bringing the public sectors up. Government should let smart managers take over and get out of managing. 

Like Puneet said, the whole services sector can explode given the right direction from the government. 

Here I would like to again bring somethings into discussions that a blind rush to capitalism may not be the best medicine for India. 

Even though US has been very successful in economic sense, we should not forget the high crime rate, delapidated inner cities, high divorce rate, teen drug use, teen abortions, and various other problems are by products of the so called developed economy. 



>list. So here goes: back to the list...
>---------- Forwarded message ----------
>Date: Tue, 12 May 1998 13:44:14 -0700 (PDT)
>From: Puneet Singh <psingh@scdt.intel.com>
>To: sabhlok@almaak.usc.edu
>Subject: Re: Indiresan: a critique
>Good to hear that we are on agreement. The tougher question to answer
>is how much to invest in each sector wrt govt incentives to promote
>that sector. And thats just in terms of research, tax breaks, financial
>backing. Like I said, I believe it needs an ROI calculation. Investing
>in a sector that can provide leadership, atleast regional if not global
>has prospects of long term benefits. Also such benefits percolate to all
>segments only after a spin off economy growth. Many sectors require
>intensive supporting companies to survive and grow. So manufacturing
>aircrafts to compete markets of even semiconductor chips is very costly
>and infrastructure intensive to begin with. However what India can do
>is take lead in service sectors and new areas where its a level playing
>field. So even if we cannot manufacture planes, microprocessors we can
>design them and get them manufactured with partners who can. There is not a 
>single product in market today that does not involve intensive design.
>To address the question of brain drain or how do we retain people who are
>capable of doing these jobs: as in any other case its a competetive global
>market that tries to attract skill set by providing incentives and reward.
>The goverment makes a conscious decision when choosing between building
>infrastructure to promote a class of industry. A classic example is ISRO.
>It was funded in research by govt. The organization was given a specific
>task/project and autonomy to work with people with the right skill set
>leading projects and not govt appointed. Supporting industry grew just based
>on needs of the project. 
>Further high tech industry needs free access to all international partners.
>So if we set up a company in India we cannot do well if the government
>taxes 10X% to import whatever the needs of the firm are. I will not even
>attempt to answer the question how do we prevent brian drain. Its a tough
>question that involves economics, nationalism and faith that are more
>opinions than solutions.
>But I'm in full agreement on the subject that the core sectors need a more
>intensive and immediate push. However innovation and invention in these
>fields is equally important. Trust me reverse engineering is very much
>part of any development flow even today and a very thought provoking
>and challenging task. It involves examination, learning and improving on 
>them. And when we open up to global markets every little idea has been 
>On companies such as IBM, Intel, Boeing coming to India :
>There is no magic wand that will attract or retain brians other
>than a real commitment and action that shows promoting these sectors. Some
>of the states seem to have shown some promise like AP, Orissa. What India
>has to offer to these companies is an equal workability in India i.e.
>provide the infrastructure (atleast locally), tax incentive etc.
>I feel weary of writing on what needs to happen, because truthfully many
>of us know all this very well. The tougher part is execution, will
>power to stick to an agenda. A boost in economy will naturally see growth
>in potential areas. 
>Let me put it this way: if I was to set up a company of my own in India
>I would like some infrastructure to support business, free access to 
>whatever the business needs were from international waters at a fair price
>(even incentives if starting a business there is more costlier for me
>than California where I can drive to my customer, supplier) and maybe
>some univ research (its helpful to team with univs when thay have
>some expertise in a certain field). An example that comes to my mind
>from UG days is when we were working on a fiber optic communication circuit
>that CDOT was interested in. A colleague of mine has an idustry of his
>own now in Hyderabad doing similar stuff. Thats no copying. Thats a totally
>industry need based research. Thats a business sector. If provided with
>financial backing and freedom from the red tapism such innovation can work.
>BTW, to dispell a much misinformed notion: from my batch of IITK graduates
>after a survey we found about 50% are finally here, 10% got into IIMs etc,
>10% in administrative services, ~30% in some technical job in India.
>And we had a batch of ~200. That doesnt account for the million in the US.

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