India Is The Most Open Economy In The World: Amitabh Kant

The CEO of NITI Aayog is hungry for 10% GDP growth, and wants you to be so, too.

04/09/2016 11:19 PM IST | Updated 12/09/2016 9:03 AM IST
Ishan Saxena/HuffPost India
NITI Aayog CEO Amitabh Kant.

Early on in our interview, when Amitabh Kant is speaking about his golf game that morning, I lean in and move the voice recorder closer to him on the table. He speaks so softly that I'm worried the recorder won't catch his voice. This will soon prove to have been unnecessary, but we will get there in a moment.

Kant is back from an 18-hole golf game at the Delhi Golf Club, where he tees off at 5:30am three days a week—Tuesday, Friday and Sunday. On weekdays there's time only for a 9-hole game. On the weekend, he and his golf mates go full swing.

"I believe in a work-life balance kind of a thing," Kant says. I wonder about this balance when I hear about his typical work-day—he's in office by 9am and rarely leaves before 8pm. And that's six days a week. "Not working on Saturdays is impossible." So "kind of a thing" is probably about right.

Kant, 60, now occupies a special place in the Indian establishment. As the country attempts to shake off its socialist hangover and doubles down on the trajectory of rapid economic growth of the post-liberalization years, he has emerged as something of a Sherpa. If Prime Minister Narendra Modi is the messiah of the 10% GDP growth mantra, Kant is a favoured high priest, spreading the gospel from Mumbai to Davos via Hannover, creating campaigns and buzzwords that believers lap up and even the sceptics admire grudgingly.

We meet at The Chambers club at the Taj Mahal hotel in Delhi. It has been hard to get time with Kant. Eventually we meet on a Sunday, somewhat late for a breakfast meeting, sandwiched between his golfing and a family lunch plan. He orders a plate of idli, and I ask for eggs Benedict. We both order tender coconut water. From our table, we have a sweeping view of Raisina Hill and the heritage sandstone office complexes near India Gate.

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Kant was appointed CEO of Niti Aayog earlier this year, in January. The Prime Minister handpicked him for the job. Kant, after all, had had a 38-year run in the Indian Administrative Service, India's elite bureaucratic corps, where he built a reputation for innovative thinking and a knack for building durable brands. Starting from the God's own Country campaign that transformed Kerala's tourism fortunes, to the memorable Incredible India campaign, to now Startup India and Make In India, seen everywhere from the New York subway to West Asian airports and European trade fairs—Kant's savvy has driven them all. But in recent years, as MD of the Delhi-Mumbai Industrial Corridor and later secretary at DIPP (the Department of Industrial Promotion and Policy), he has been focused on infrastructure, foreign direct investment and improving the ease of doing business in India.

I want to hear more about what exactly NITI Aayog does. After dislodging the Soviet-style Planning Commission in what was among the first major decisions of the Modi government, there hasn't been a whole lot of visibility about the precise role the institution will play.

"We need clarity, consistency and predictability in terms of policy.Amitabh Kant

"Planning is over. There is no more financial allocation to be done by NITI Aayog," Kant says. It sets targets for ministries, monitors their progress and apprises the PM. It also acts as the government's think tank. It is now working on a 15-year vision document for the country, and is getting every state to do the same. "So you have a 15-year vision document, a 7-year strategy plan, and a 3.5-year review, which coincides with the Finance Commission allocations. So this way every part of the government is working towards a singular vision," Kant says.

That vision is achieving 10% economic growth for a sustained period—it's something of an obsession for Kant. He made an audacious presentation a few weeks before our meeting—India must aim to grow to be a $10 trillion economy by 2032 with complete elimination of poverty (it's now a $2 trillion economy, forecast to grow this year at 7.5%). "That is my belief. Sustained high growth can get us there. But for that the whole country has to come together. Every citizen must act with hunger and passion to achieve it," he says.

Watch Amitabh Kant speak about a very memorable meal.

But how do you woo investments to India when so much is outside of the Central government's control? Take for instance the recent experience of Carlsberg, the beer brand. After being wooed by the Bihar government to invest $25 million in a plant, they were left high and dry in under three years when Nitish Kumar decided overnight to impose complete prohibition. "India is the most difficult market in the world..." is what Carlsberg India MD Michael Jensen said in an interview, complaining about policy uncertainty.

So there are state governments that might spring a surprise based on political expediency and then there's the judiciary, which has in recent years struck down resource allocations, adding more uncertainty.

Kant says the fortunate thing is that the change has begun from the top. "We need clarity, consistency and predictability in terms of policy. The big change now is that the Central government has done this. The states need to realize this now and they need to bring this in also. And also, the judiciary must realize this too. If India has to grow at 8-10%, all the institutions have to send the same message."

Kant is working on development-related indices to spur competition among states. Education, health and water are particular focus areas.

As he speaks about the areas that he's closest to—international trade, India's way forward, transforming governance culture and industries—Kant metamorphoses into an evangelist, a cross between a motivational speaker and a fiery sports coach. His voice rises and reverberates in the room, and I get a glimpse of the kind of pitches he must make in service of brand India. Now the recorder can catch his voice even from the other end of the room.

My eggs are perfectly done. The hollandaise sauce has not overwhelmed the flavor of the eggs, and the ham is not too salty. Kant seems to like his breakfast, too. He is managing to eat spoonfuls at intervals.

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I bring up a pet peeve of mine with regard to the litany of schemes introduced by this government—they are announced without a clearly articulated target and deadline, and the government's focus seems to move from one big scheme to the next. I tell him how I received no response from an email id for Invest India, which, it was assured during the launch of Make in India, would respond to any investor query within 24 hours.

It is just as well that they did not respond to my queries, Kant says, without missing a beat. "Invest India is a group of 30 boys tracking and chasing investments all over the world. I'm glad they did not respond to you because their job is to respond to investors, not to journalists. For that you should write to the press information officer of DIPP," he says, laughing. I am assured that the case is not that the promises made during the launch of Make in India have been abandoned, as attention has moved elsewhere.

Under Make In India, Kant tells me, 25 departments were identified for reform and their secretaries are working on an action plan and they are being monitored. Of the 18 action points the PM unveiled during Startup India, most have been completed. There is a tremendous amount of work going on behind the scenes and it is yielding results, he tells me. Besides, now the government is no longer announcing new schemes—it's going to be all about execution.

I challenge any other country to show they are more open than IndiaAmitabh Kant

"India is today the largest recipient of foreign direct investment in the world. While FDI globally has declined 16%, in India it has risen 53%!" he says.

And then he goes on to make a bold statement.

"Journalists don't realize this, but India is today the world's most open economy for FDI. I challenge any other country to show they are more open than India."

There is hardly any part of the economy now that is not open to foreign investment, he says, as I gawk with alarm. To reiterate, he says: "India is more open than even the United States."

But Kant says India is open in economy and labour. "An open market can't be a half-way house. You can't say I'm open in commodities but closed in labour. The US and Europe are radically closed in the labour sector." This is of course undeniably true. An economy open to FDI, however, doesn't automatically translate into being an easy place to do business in. That, Kant says, continues to be a work in progress. Last year, in the World Bank's Ease of Doing Business rankings, the US ranked 7. India was at 130, although it managed to jump 12 positions ahead from the previous year.

But hasn't the manufacturing opportunity passed India by? Can India compete with countries like China in manufacturing, and hope to have a competitive advantage?

Kant treats the question as a dangerous idea that shouldn't even be entertained. "In China, wage rates are growing 12% a year. They have lost the advantage in textiles. So why should we not grab it? Why should it go to Bangladesh and Vietnam?

Let me assure you this—if India thinks the time has bypassed it, India can never become a great nation. The time is now! We just cannot grow at 10% without strong growth in manufacturing. And there are huge perils of premature deindustrialization happening."

As we are served coffee, I ask him about what is it like to work with the PM, also the chairman of NITI Aayog and Kant's boss. He finds Modi to be a rare leader who is able to marry a grand vision with a capacity for tremendous detail. "He's a techie at heart. And while working, he's totally apolitical. He picks up good ideas, irrespective of where it has come from."

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Kant cites Aadhaar as an example. A legacy of the Congress-led UPA government, Modi has enthusiastically embraced Aadhaar. "Imagine a country with a billion smartphones—this will happen by 2024. And a billion biometrics. All innovations will happen from India because of that. The judiciary may not realize it. But here's a leader who realizes that and he's pushed for it, irrespective of the fact that it was actually driven by the Congress. What's good for the country is good for the country," Kant says.

The PM is a techie at heart. And while working, he's totally apolitical.Amitabh Kant

I'm struck by Kant's energy and optimism, his genuine passion for improving things and making India a better place. How is he such an incorrigible optimist, I ask him, after 38 years in the Indian bureaucracy, which turns most people cynical and jaded, and convinced that nothing is going to change. He doesn't offer a direct answer, but talks about the projects he has undertaken over the years, from demolitions of illegal structures as sub-collector in Thalassery, to getting special buses started for fisherwomen in Thiruvananthapuram because they wouldn't be allowed in regular buses with their catch, to getting the finance ministry to agree to let Calicut airport be developed as India's first public-private airport, to refusing to work with the lowest bidder for the Incredible India campaign. It has been a long career in finding a way.

Kant reminisces a bit about his journey, and talks about how he comes from a family of civil servants. "When I joined the service, the only intention was to work for the country. We were all motivated by the passion for serving the country," he says, apropos of nothing. I wonder if I caught a hint of emotion in his voice.

So what's next for Kant? Does politics tempt him?

"No, I have no intention of joining politics. At heart I'm just not cut out for it. I'm a civil servant and I just want to be an agent of change."

This is part of HuffPost India's exclusive interview series, Breakfast With HuffPost, presented by Lufthansa. The other interviews in the series are here.

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