An evening with Mr Pallam Raju
Introduction
On July 4, we had the 200th session in the ICFAI WiseViews series. We had a worthy speaker, former Union Minister, Mr Pallam Raju. Mr Raju provided deep insights on how to be a great political leader and serve the country as a policy maker. He also talked about the economic, security and social challenges facing India.
About Mr Pallam Raju
Mr Pallam Raju is Founding Director, Advanced System in Package Technologies Private Limited (ASIP Technologies), a company that is setting up a global standard semiconductor OSAT facility in Hyderabad, India. He is also the founder of two companies in Semiconductor Design Services and IP Development, with successful exits. He served as Director on the Boards of Air India and Indian Airlines, between 1994-1997. He worked abroad in Management Consulting & Information Technology in Boston, USA and Oslo, Norway, between 1986 and 1988.
Between October 2012 and May 2014, Mr Raju was the Union Cabinet Minister of Human Resources Development (MHRD), in Dr. Manmohan Singh’s United Progressive Alliance (UPA) Government.
Between January 2006 and October 2012, he served as Union Minister of State in the Ministry of Defence. One of the longest serving ministers in the portfolio, he handed the responsibilities of Defence Production, Defence Estates, Border Roads Organisation, National Cadet Corps, Territorial Army, Sainik Schools and Ex-Servicemen Welfare. Mr Raju represented the country in many international conferences and bilateral defence dialogues worldwide. He played a proactive role in strengthening the country’s defence industrial base and was the visible face of the government.
Between August 2004 and January 2006, Mr Raju served as Chairman, Parliamentary Standing Committee on Information Technology. His notable contribution was the report submitted to Parliament on the “Utilisation of the Spectrum.” He also advocated the need for India to have its own semiconductor fabs.
Mr Raju was elected to the Lok Sabha (Indian Parliament) thrice, in 1989, 2004 and 2009 from Kakinada, East Godavari District of Andhra Pradesh.
Mr Raju holds a BE in Electronics and Communications from Andhra University, India and an MBA from Temple University, Philadelphia, USA.
Leadership and policy making
Leadership is about core values, having a vision for the larger good and striving for good governance. Sound policy making is needed for translating intentions into actions. The competence and performance of any government depends on sound policy making. Extensive stakeholder consultations are an important prerequisite for policy formulation. We should be able to differentiate between statesmen and politicians while exercising our vote.
India as a nation
India is a very diverse entity with various regions, cultures, professions, economic backgrounds and education levels. We have a multi-layered, heterogeneous population. However, our people are bound by the rich heritage of an ancient civilization. They are generally harmonious, humane, social, tolerant, accommodative and hardworking. These factors are propelling the nation forward despite the diversity.
About the Indian economy
We are a driven and ambitious nation. About 65% of the population is under the age of 35. The economic progress of the nation over the decades since independence has been phenomenal. Yet there is a significant percentage of the population below the poverty line. The disparity between the minuscule percentage of the affluent and the economically weaker majority is large and continues to widen. India is currently a $ 4.19 trillion economy and the fourth largest in the world. But we have a per capita income of only Rs 172,000 which is one of the lowest in the world.
Agriculture still provides the largest occupation to people and constitutes 18- 19% of the GDP industry. The manufacturing sector makes up about 25% of the GDP. The services sector (55% of the GDP) is increasingly becoming the dominant economic driver. This sector will grow and reach about 60% of the GDP and employ 52% of the workforce. The manufacturing sector is expected to contribute about 18% of GDP, employing 15% of the workforce. The agriculture sector is expected to decline to 10% of GDP with its share of employment dropping to 22%. Already, we are seeing a shortage of farm labour in the villages.
On economic liberalization
Economic liberalization started in the 1990s and has unleashed the true potential of our nation. Successive governments have carried forward the economic reforms. This has unshackled growth across sectors.
The services sector has grown propelled by the information technology, communications and the knowledge disciplines. Currently the sector is valued at around $2.3 trillion of India's nominal GDP of $4.19 trillion.
An increasingly educated, skilled and knowledgeable workforce is enabling the growth of the services sector. Better digital infrastructure, improved connectivity, affordable broadband and internet connectivity and a highly adaptable population have also contributed to the growth.
A major area of concern is R&D spending, estimated to be about 0.6% of the budget. This is a very tiny amount. We need adequate funding for entrepreneurship and knowledge-based startup initiatives.
Economic Challenges
There is increasing disparity and deprivation when it comes to the poorer sections of the population. There are glaringly large divides in the lifestyles and access to basic living conditions, health and education, and opportunities.
There is a wide disparity between the aspirations and access to opportunities for most of the young population.
It is important to make agriculture viable and remunerative. Agriculture remains the primary occupation for a large percentage of the population. Agriculture directly impacts the standard of living in the rural areas.
We must ensure adequate nutritional standards, education standards and skilling opportunities to have a healthy, educated and a skilled working age population.
We need to allocate more resources for the skilling and educational institutions. Skilling institutions such as the poly technics and ITIs need to be strengthened. Higher education institutions need to be nurtured and guided towards value added education, research and innovation. Knowledge partnerships with leading higher education institutions worldwide also need to be encouraged.
Ensuring reliable infrastructure and utilities and connectivity in today's information age is an imperative to empower the population in the rural and remote areas of the country.
Unemployment remains an ongoing challenge. At the same time, emerging technologies such as artificial intelligence are threatening to make many jobs redundant. In 2024, the big three TCS, Infosys and Wipro laid off 65,000 workers.
Security challenges
The major threats are emanating from China and Pakistan. Pakistan continues its covert warfare through terrorism. China continues its aggressive posture on the line of actual control and remains hostile towards India in the United Nations Security Council. Both Pakistan and China have formed a nexus that is largely against India's interests in our neighbourhood.
The fragility of the economies of neighbouring countries and their political instability adds to the security challenges in the neighbourhood. China's belligerent posturing on the line of actual control and in the South China Sea, its economic might, lopsided trade surpluses and its belt and road initiative have compelled weaker nations in the neighbourhood into subservience. This has added to the instability in the Indian subcontinent.
India's vast coastline of 7,500 kilometres and the Indian Ocean also pose security challenges that need to be addressed comprehensively.
The changing pattern of warfare today has been demonstrated during the recent Russia-Ukraine and Israel-Iran wars. We have seen drone warfare with stealth and surprise elements. We need a higher order of preparedness with sharper real-time technologies and responses.
India is a responsible nuclear power with a no first strike policy. We have strengthened our armed forces and military capabilities in an assiduous manner building strong deterrence capabilities and strengthening the indigenous manufacturing sector.
Today the role of the private sector in defence manufacturing has also grown substantially. The private sector has become an indispensable and integral component to the nation's defence industrial base.
Natural disasters like landslides and heavy rains in the hilly states, cyclones along the vast coastline, floods caused during the rainy season are ongoing challenges faced by the country.
Social challenges
The Pradhan Mantri Gram Sadak Yojna 2000 has connected our rural villages very well and played an important role in nation building.
The Right to Information Act 2005 attempts to enable transparency and accountability of governments. It aims to put information at the fingertips of our citizens so that they are aware of how the government is acting.
The Right to Employment Act 2005 attempts to ensure minimum employment across the nation. The Act helps to address the challenges of rural distress especially during the non-agricultural season.
The Right to Education Act 2010 aims to universalize education especially school education until class 8. That is coupled with one of the largest midday meal schemes in the world.
The National Food Security Act 2013 attempts to address the minimal nutritional and food needs of the poorer population. It is extensively applied so that people can get minimum food security.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 protects the right of landowners in case of acquisitions by governments.
The Targeted Delivery of Financial and Other Subsidies, Benefits and Services (Aadhar) Act 2016 aims at eliminating any middle layers between the government and the real beneficiaries.
These are some of the enabling provisions that have happened over time. But a lot more needs to be done to bring some social parity in society today as we try to sustain our economic growth and meet the aspirations of young people.
Strengthening our democratic Institutions
Strengthening our democratic institutions is an imperative and an uncompromising requirement for reinforcing faith in the system and the nation.
Enhancing our education, health and financial institutions is important to strengthen the foundations of the nation's true resources, our people.
We must ensure dedicated nutritional health interventions. We must provide sustained support for the school infrastructure and for the quality of teachers. We must seamlessly integrate skills into the education framework.
Our syllabus and educational content should incorporate humanitarian values and inspire students to work for the social good.
Streamlining the judicial system and our courts given their invaluable role in the delivery of justice is also important. This is more so in view of the huge backlog of cases.
We must prepare future generations to tackle the challenges posed by emerging technologies such as artificial intelligence which threatens to displace a number of people. We should treat AI as an opportunity and adapt and upskill to ensure that we stay ahead of the curve.
We should at least double our per capita income. For this, we must create an enabling system for research, innovation, entrepreneurship and skilling.
Q&A
As Chairman of the Parliamentary Standing Committee on IT, Mr Raju had pointed out the importance of utilizing the telecom spectrum judiciously. Ironically, the UPA government was found to be at fault for giving away the spectrum, instead of auctioning it for about Rs 176,000 crores.
Mr Raju implemented the Rohtang Tunnel from Mandi to Leh through the Border Roads Organization. The project had been started during Mr Vajpayee’s time but had been repeatedly postponed in view of the huge resources required. The project was completed under the UPA thanks to the initiative of Mr Raju. Then there was the bridge project across the Chenab linking Jammu and Srinagar.
The defence industrial base was also widened during Mr Raju’s time. An offsets policy was announced. As per the policy, 30% of any imports had to be manufactured in India. For some strategic items, this was raised to 50%.
This was introduced in a large-hearted spirit. But the implementation proved to be a challenge. The learning outcomes remained poor. One reason could be the rapid expansion of the teacher base without ensuring quality. The required school infrastructure was also not in place. Even in case of mid-day meals, there were implementation challenges. The lesson is that parents and teachers must be actively involved. Then only things will run smoothly.
When it was introduced by Delhi University, it faced a lot of resistance from the teachers who wanted more time to make the switch. The program was championed by the Vice Chancellor with a clear skill building focus. The plan was supported by the then UGC Chairman and Education Secretary. Mr Raju also backed the plan. But then the government changed, and a new minister took charge. The same UGC and Secretary now described it as a bad idea!
Earlier we had the National Knowledge Network to link the universities and research institutions. The key factors influencing the use of ICT are familiarisation, connectivity and content.
Till 2014, Mr Raju contested 6 Lok Sabha elections. They were straight fights. No money was given to the voters. But from 2014 onwards, money became an integral part of elections in Tamil Nadu, Karnataka, Andhra and Telangana. This has changed the dynamics of elections. Let us hope we can come out of this negative cycle.
When he was a union minister, Mr Raju introduced many far-sighted bills. But some could not be passed due to the negative mindset of the opposition. The bureaucracy cooperated once they realized the minister was well meaning. To mobilize support for the bills, Mr Raju would explain the provisions of the bill to the MPs, leaders of the opposition, the chairman of the standing committee. He would articulate the key issues in parliament and mobilise media support. At the end of the day, sincere intent makes a big difference.
It is a juggling act. The two responsibilities are somewhat different but equally enjoyable. At the national level, as a minister, it is about passing legislation for the larger good. Nurturing the constituency is a great experience. But the problem is that unlike in the past, people are sending their requests for their personal good rather than for the larger good.
Most engineering college students are not industry ready. Many colleges are imparting soft skills training to enable students to get through placement interviews. But they are not paying enough attention to subject knowledge. It is important to strike a balance.
Ideally, we should have one skilling institution (polytechnic /ITI) for every engineering college. But engineering has become a money game. So engineering colleges have begun to proliferate. The skilling institutions have been left behind.
The quality of the faculty must be improved. We need to pay more attention to skilling.
All leaders are well meaning. But they are shaped by the environment and the public. Earlier, requests from the public would be for the larger good. Now they are for the individual good. Money has entered politics in a big way. To win an election, it has become necessary to distribute money. We are going through a difficult phase. We must build awareness in society and have a better form of electioneering.
We have missed the bus for various reasons.
We have not developed the ITIs and polytechnics. So the skill base is limited. We have only churned out degrees without adequate practical knowledge.
Labour laws, availability of finance, harassment by department officials are other challenges. There has never been an enabling environment for manufacturing. Single window clearance is only on paper. In reality, there are many impediments to overcome for an entrepreneur. There is a lot of running around to be done by entrepreneurs.
China provides support in various forms to its industries including access to finance. The government is clear about volume manufacturing, quality and the target markets. We are clearly lagging behind China.
But we can still make a comeback if we make the necessary changes. Manufacturing of mobile phones under PLI is a good example. We are now the second largest manufacturer of mobile phones in the world and are exporting them. We can do the same for other industries if we address the inhibiting factors. We also have a large domestic market to support manufacturers.
Brain drain cannot be stopped. People will go where the opportunities lie. It is unfair to stop them. But people who leave the country often come back eventually as global leaders or serve in some capacity in the country.
Services will be the main job creating sector. We should invest in skilling. With the right skills, people may even find global opportunities. So other countries too may benefit. We should also invest in good faculty.
We now have more funds available for entrepreneurs and startups. The entrepreneurship mantra has caught on. Young people are aspirational and often want to be entrepreneurs. There are institutions like T Hub. But how successful the startups will be in terms of job generation remains to be seen. One concern is that global investors still hesitate to put their money in Indian knowledge enterprises building products for India or for the world.
The UPA government led by Manmohan Singh had a different philosophy compared to the present one. The government believed it was only a part of continuum, carrying forward the good work done by earlier governments. The following governments would carry forward the good work.
UPA was not quite good at claiming credit. It was also bad at defending some of the actions of the coalition partners. That is how the scams like 2 G happened and led to the exit of the UPA government. The government was not fully responsible for the scam. It was the result of earlier policies.
The current government has also done a lot of good work and has been better at claiming credit. But it is regrettable that it has rubbished the work of earlier governments.
Mr Raju worked with exemplary leaders like Pranab Mukerjee, Manmohan Singh and AK Antony. He could look up to them as role models. Mr Antony, the Union Defence Minister once told him that power comes and goes. Defence was a heady ministry with convoys and a plane at the disposal of the minister. So, one should not allow it to go to his head.
Mr Raju gave an example to illustrate how he put values above political gain. He had set in motion the recruitment of 30 Vice Chancellors for central universities. The selection committee was constituted, and a diligent selection exercise was carried out. Candidates were selected and offer letters were about to be rolled out. But then the general elections were announced. The President of India recommended that in view of the elections, the decision be kept in abeyance. Mr Raju could have chosen to go ahead with the appointments but he maintained the proper code of conduct expected from a high official.