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Globalization, Good Governance &

Democracy

The Interface of India@75

Arun Kumar Jagatramka

Chairman and Managing Director

Gujarat NRE Coke Ltd

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India @ 75

A Passion to Grow, to Lead the World

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One of the fastest growing

economies in the world.

Source: The world in 2050, PWC

0

1

2

3

4

5

6

7

8

9

India China Brazil Russia South

Africa

USA UK Japan

G

rowthRatein%

Projected Average Annual Real Growth in GDP 2009 - 2050

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Comparison Growth Profiles

Indias growth has been accelerating

Growth trends sustain high rates for long periods

China and India potentially sustain growth longer due

to magnitude of their populations

0

2

4

6

8

10

12

1960s 1970s 1980s 1990s 2000s 2010s estAvgRealGDPGro

wthin%

JapanTaiwan

Korea

China

India

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Huge untapped market - growing urbanisation

Source : McKinsey Global Institute

Indias middle class

constitutes 50 million

people at present.

Likely to go up to 583million people by 2025

Households that can

afford discretionary

spending likely to go

up from 8 million at

present to 94 million

by 2025

Middle Class is on the rise

Increasing Domestic Consumption

4225

6

5

12

10

3

3

8

11

17

20

2

6

5

9

713

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2025

Share of Average Household Consumption

Food, Beverages, and Tobacco Apparel Housing Utilities

Household Products Personal Products & Services Transportation

Communication Education & Recreation Health Care

Discretionary

Expenditure

(52%)

Necessities

(48%) Necessities

(30%)

Discretionary

Expenditure

(70%)

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Demographic Dividend

A sustained longer growth in demand led by domestic

consumption in India due to our significantly younger

population.

India to remain young with ~60% below 30 years of age.

Source : UN Population Prospects, 2008 revision

The population pyramid India 2010 The population pyramid India 2030

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Youth Power

Set to drive India to Development andProsperity in coming decades

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But this latent power house of energy

may soon turn to be Nightmare.

If we do not channelize the energy in right direction

If we do not put our systems right and are

unable to provide good governance

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Corruption.

Is one single Roadblock..That can derail Indias

dream run in economic growth

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Governance Deficit

Has already started taking its toll..

8%

11.8%

8.8%

3.4%

10.4%

8.7%

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11*

Slower Growth

Annual Average Rate of Growth of

Industrial Output

High Borrowing Costs and worsening investor

sentiment have decelerated rate of growth of

industrial outputSource: Indicus Analytics

-5

0

5

10

15

20

4QFY06

2

FY07

4QFY07

2QFY08

4QFY08

2

FY09

4QFY09

2QFY10

4

FY10

2QFY11

%C

hang

e

Reform Stagnation

Year on Year % Change in Gross

Capital Formation

Governance Deficit one of the prime causes of

low investor confidence hurting investments

Source: CSO, CIRA

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Governance Deficit Slowing Growth

0

5000

10000

15000

20000

25000

30000

35000

40000

2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11(upto

Jan 2011)

US$m

illion

FDI being hit as well

FDI in India declined by

36% in 2010 compared

to that in2009. This

decline coincides with

FDI growth of 17% in

non-Arab Asia.

Investors are preferring a relatively high cost economy as

the ease of doing business is much less in India due to

corruption, lack of transparency and governance deficit

Source: Ministry of Commerce and Industry, GoI

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Hardly 10% of Governments Social Sector

spending reaches the needy

Rs. 883 crore was paid as bribe by

people BPL in an year in India

Poorest household paid Rs.215

crore to police as bribe

We need a robust poverty

alleviation mechanism through

proper implementation &

monitoring so that the benefit

reaches the poor

Corruption affects the poor the most

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PDS is a glaring example of

Corruption affecting the poor

Ration shops remain empty

or closed

Items meant for PDS find

their way to regular kiranastore and sold at market

price

License to open and operateRation shop is a separate

scam due to huge margin

involved

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Falls easy prey to the divisiveelements

The poor isolated from India Shining

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THE YOUTH

Needs A Society built on the Foundation

ofTRUSTWe must learn to Trust. For several

centuries, Indians have been

brainwashed to distrust other

Indians. This saps national energy.

Distrust kills initiative. Distrustcompels people to maneuver and

manipulate. Trust and transparency

stimulates entrepreneurship.

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Non-compliable provisions in most

revenue legislations.

Lead to all being defaulters - differing

only in scale

Big evaders can afford to buy the system

out

While genuine ones are unable to match

the payout of tax evaders to keep the

officials happy

Leading to even the genuine ones

turning into evaders in the longer term

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Relative Honesty

A practical and a

true statement

A serious needfor relook at all

the regulations

to allow honest

people to survive

India Today Conclave 2011

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Key to Good Governance

A relook at the laws The laws are heavily drafted to try to keep the offenders at bay

The regulations in place attempt to make the process a stringent

one

As a result making it tough for the honest to comply with

While the dishonest finds

a way out to bend the

system

The honest find himself

lost in the plethora of rules

& regulations

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Scrap all laws which are not complied with by a

majority of the population such laws only breed

corruption

Laws must not be vague and open ended..which

can be interpreted by the enforcement agencies

as per his own wish again a source of corruption

Laws must be designed to Help the Honest and to

make his Life Easy Rather than Complicating and

make him Live in a Constant Fear

The Honest should not be forced to turn corrupt

Simplify For Greater

Compliance

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We need to come out of the..

Age old mentality of theOppressed and the Oppressor.

Where the enforcement agencies are viewed asthe oppressor

And the common man as oppressed

The Britishers have left but

have left the legacy of Class behind

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Injustice Breeds Corruption

Creates alienation

and hatred

Erodes faith in thesystem

Forces otherwise

honest people to be

corrupt

Corruption is: Anti National

Anti Poor

Anti Development

And Thus Anti Governance

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We are in vicious circle of:

Equitable distribution of bribe

Complete loss of

Propriety and Integrity

A HUGE GOVERNANACEDFICIT

Thrivingofvotebanks

Continuityofperson

alfiefdoms

Reign of Corruption

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System Loaded Against One who tries to

be Honest

We need to get rid of the

Preconceived Mindsets like

Everybody evades tax

Which discourages the honest to

pay higher tax

Leading to more leakage

Multiple division of entityetc.

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Failure of Justice

Gives Rise to Trial by Media

Media has successfully tried to rally

behind the cases of some common

citizens -gaining more acceptance

and credibility in the public life

While the medias job is appreciated

Isnt the inaction by the rightful

agencies and our justice delivery

mechanism taking us to a situation

of Banana Republic?

A Clarioncall for

Justice

http://qwickstep.com/search/influences-of-media.html

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A Reality Check of the Forth

Pillar of Democracy

After each Scam - Media cries foul TRPs increase

We move to another bigger SCAM

Media needs to seriously follow up

the old stories to bring facts

infront of the Nation

Scams should not just become a

TRP increasing scoop.

And above all we need responsible

journalism Media is after all not

free of corruption either

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Raise a Voice

Protect the Whistleblower

Honour and Support

those that Raise their

Voice

Avoid Short Term Gains

for Long Term Goals

Do not Buy my way out

Adopt a NO BRIBE stance

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Immunity to bribe givers : probably a

relief from being hounded and harassed

Person paying the bribe is often the victim

of the system who is forced to pay as well

as remain silent for fear of prosecution

providing undue immunity to the corrupt Is it not akin to rape victim being jailed for

being raped, if she cries rape

Bribe givers be allowed to declare thebribes paid by them without fear of

prosecution, while bribe takers be

accorded stringent punishment

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Decriminalize bribe paying :

Kaushik Basu, Chief Economic Adviser

This would eliminate extortionist

corruption to a great extent

Would also discourage enforcement

agencies from using the laws to theirbenefit, to harass people - only to get

their coffers filled

Law should be changed so that, at the

time of bribery, both parties know that

the giver has immunity and that the

taker not only has a heftier penalty but

also has to return the bribe

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Corruption thrives as long as people areignorant or apathetic.

And only when ignorance and apathy are combatedcan corruption be

effectively controlled.

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Is our Democracy at stake?a word of caution

The Mass do not believe and trust the Netas If we loose faith on our elected representatives, loose faith

on our parliament, then is it not a serious threat to our

democracy?

A cleansing process need to be initiated on an urgent basis

and all political parties must sense this crisis before it is too

late

Crusade against corruption should not become an anti-

establishment movement : we need to be aware of many

divisive elements who would like to fish in troubled waters

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We need to ensure that

The Days of Corrupt Governance

are Numbered

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At the Interface of

India @ 75The Call is for Good Governance