It’s a very 21st century, new India moment. Arriving at Bon South restaurant in the affluent Koramangala neighbourhood in Bangalore, I receive a text message on the phone I have borrowed from my father. His mobile phone company has just sent a password that he needs to pay his bill online.
I call him but, as we are connected, Nandan Nilekani, co-chairman of IT outsourcing giant Infosys Technologies, appears and says hello. Though conscious that I am keeping one of India’s best-known businessmen waiting, I elect to finish relaying the password before hanging up. I decide that Nilekani, as an evangelist of the view that India’s prospects can be transformed through investment in IT, would approve of the idea of my 76-year-old father paying his bill online.
We enter the minimalist white restaurant, its cool grey floors offering an immediate respite from the heat outside. Nilekani, 53, is dressed casually in a striped grey shirt and black chinos and loafers. He tells me he has only just arrived from the US that Monday morning, after a journey that started in Seattle on Saturday night. The trip, to promote his new book Imagining India: Ideas for the New Century, a manifesto for what India needs to do to succeed economically in the 21st century, included guest appearances on talk shows with Charlie Rose and Jon Stewart, who described him as part of a new breed of Indian (and Chinese) “overlords”.
Despite the travelling, Nilekani’s high-wattage energy level seems unaffected. In recent years, he has grown used to giving interviews about India and Asia’s ascendance everywhere from Davos (he has been on the board of the World Economic Forum since 2006) to talk shows in the US. How did he become a kind of Maharishi Mahesh Yogi for the corporate set? “It has happened by default,” he says. “Being part of Infosys, which is a very global company, a lot of my job has been outside India meeting CEOs and top politicians. I got into this whole routine of explaining India and what’s happening in technology.”
When Nilekani and six colleagues, including the company’s charismatic first chief executive NR Narayana Murthy, founded Infosys in 1981, it had just $250 in capital and they initially worked out of one of the founders’ homes in Mumbai. They were determined to build a company run by professionals rather than family owners, a rarity in India at that time. Today, it boasts a market capitalisation of about US$17bn and is part of a triumvirate of IT outsourcing companies that has helped make India the back-office of the world, with the phrase “being Bangalored” becoming slang for losing your job to outsourcing.
After Murthy had completed a long stint as the first chief executive of Infosys, Nilekani succeeded him between 2002 and 2007, before the job passed to another of the founders, “Kris” Gopalakrishnan. “For all of us, the company is more important than each of us,” he says, when I ask him how these transitions have been so smooth. “Once that is your framework, then you can make a lot of adjustments.”
The corporate campus on the outskirts of Bangalore, complete with gyms, food courts with multiple cuisines and green surroundings, would not look out of place in California were it not for its bizarre buildings inspired by the Louvre, Sydney Opera House and even the Titanic. Nilekani tells me how visitors would ask how Infosys had such “sylvan orderly surroundings while India also had the world’s largest slums” and how “India had this outsourcing industry with talented technology professionals but also the world’s largest number of uneducated children”. One of those visitors, about five years ago, was the well-known US newspaper columnist Thomas Friedman.
While filming a TV programme on globalisation, Friedman interviewed Nilekani, who explained how, as a result of the dotcom bubble, huge overinvestment in bandwidth around the world had reduced the price of communication to the point where it scarcely mattered whether a person was working in Bangalore or in San Francisco. At one point, he said, “The playing field is being levelled.” On the chaotic drive back into central Bangalore, the literal-minded Friedman had a eureka moment: Nilekani’s comment helped crystallise the thesis of his book The World is Flat, which has gone on to sell more than a million copies. Friedman has written the introduction to Nilekani’s book and calls him the “great explainer”.
Imagining India lives up to this accolade. Nilekani combines a sweeping analysis of everything from the challenges of creating pension systems for India’s elderly to giving citizens “smart cards” (in part to transfer subsidies directly to the poor), to upgrading its woefully inadequate educational system (more than a third of India’s population of 1.1bn and more than half of its women are illiterate). “The book was in my brain for some time because I could not understand India’s contradictions,” he explains. “When people asked me these questions, I felt I really didn’t have good answers for them. [The book] is an entrepreneur’s view, saying these opportunities are also possible for this country.”
The waiter comes by to urge us to try the vast buffet, a daunting line-up that features heavy curries from southern Indian states including Goa and Kerala. Nilekani, however, worries solicitously that sampling the buffet would create problems when reproducing the menu that accompanies this interview – a trivial but telling example of the forward-thinking for which he is known. Instead we order a creamy chicken curry from Andhra Pradesh and he chooses a mutton ishtew from Kerala. We choose the same Kerala pancake called an appam.
When it comes to India’s future, however, we find it more difficult to agree. As an entrepreneur, he sees new dawns beckoning; as a journalist I tend to see dark clouds as well – and the country we’re discussing offers plenty of both. One of the central theses of Imagining India is that the country is in the middle of a demographic dividend: Nilekani argues that instead of suffering famines and the revolution that doom-mongers prophesied in the 1960s because of the huge growth of its population, India is positioned to benefit from the higher growth rates in gross domestic product that typically characterises a young working populace.
More provocatively, Nilekani believes India has better prospects than China, whose one-child policy will, he observes, lead to a rapid ageing of its population, thus creating problems for its economy. Also, he anticipates that a transition to democracy still awaits China, whereas “we have [made that transition and] paid our democracy tax. And India is going to be young for another 30 years. Demography is in some sense destiny, right?”
“India’s challenges are of execution,” he continues, a tad airily. “No amount of execution can change the reality of an ageing population like you have in Europe or Japan.”
I point to statistics from his book that suggest that India’s missed opportunities have all been about poor execution by its government – for instance that 85 per cent of Indians, even most of the very poor, opt to go to private hospitals and doctors because government healthcare is so abysmal. Meanwhile, widespread teacher absenteeism at government schools, especially in India’s populous north where local governance is poor, is leading to higher school drop-out rates. Half of India’s children leave school by the age of 14 and just 13 per cent go to college, Nilekani notes in his book. Of the 350,000 engineering students who graduate every year, about half are deemed unemployable in that field, according to an IT industry body.
“There are many examples of great transformation happening in our society,” Nilekani says in response. “I come from an entrepreneurial background of looking for opportunities and also frequently being told that something is not possible. Of course, it’s one thing to do it in a company and another thing to do it for a country.”
He is enthused by the huge growth of non-governmental organisations, especially in education. Nilekani and his wife, Rohini, a columnist and energetic philanthropist, have donated US$50m to causes as diverse as urban reforms, water conservation and education. (In another of India’s contradictions, absurd tax breaks for the IT industry mean that Infosys paid an effective tax rate of just 13 per cent in the financial year ended last month, versus a typical corporate tax rate of 34 per cent, according to an analyst.)
When we meet, voting for the country’s elections is just about to start, and Nilekani points also to the relatively orderly electronic polling for the country’s 670m voters, and the switch from a paper-based and fraud-ridden stock exchange in the 1990s to the current electronic systems “with faster settlement than most western stock exchanges”.
Warming to this theme, he says: “There is a massive struggle between the historical forces of caste, corruption and communalism [which in the Indian context refers to religious fundamentalism] and the forces trying to create a more just and modern society. It’s easy to say nothing will change. Maybe it is two steps forward, one step back but the reality is change is happening.”
I put it to him that India’s demographic bulge might not, as he argues in his book, lead to an economic miracle such as the one in east Asia, which benefited from much greater female emancipation and an upswing in global trade. Instead, it could conceivably result in urban tensions. These have included attacks in Mumbai on taxi drivers and others from north India by members of a chauvinist provincial party. In Bangalore a couple of years ago, the death by natural causes of a film actor prompted bizarre rioting that shut the city down for two days. “It’s the same issue,” he acknowledges. “It’s to do with young unemployed males.” If India does not move more quickly to provide opportunities for the millions joining its workforce every year, he concedes, “the whole thing can be a disaster”.
He insists, however, that the commitment to primary education that will empower this workforce is now embedded in India. “It does not matter which combination of parties come to power [this summer]. Primary education will continue full speed ahead,” he says, arguing that such ideas have become impervious to what he calls the “competitive populism” of Indian politics.
One example of that populism was a move a couple of years ago by the current government’s human resources minister to increase drastically the reservation of seats for lower castes in institutes of higher education. A few years ago, Nilekani was appointed to the National Knowledge Commission by Manmohan Singh, India’s well-regarded prime minister, but the committee’s principal suggestion that India needed a better regulatory structure to allow more private investment in colleges and universities was rejected in March this year to the ire of the country’s industry groups. About 1,500 new universities are needed over the next six years to help educate some of the 550m Indians who are under the age of 25 and several UK and US institutions are eager to help.
Nilekani himself benefited from studying at the Indian Institute of Technology in Mumbai, one of the country’s best. He was born in Bangalore and went to school there before his father’s job transfers as a textile manager prompted a move away. He describes his mother, Durga, 83, who lives with Nilekani and his wife, as an anchor of the family while he was growing up. After school, he gained admission through the highly competitive entrance exam to the IIT – the common entrance exam today is taken by 400,000 students for just 4,000 places. He came into his own there, participating in debates and it was at an intercollegiate competition that he met his future wife.
At a book launch party in Bangalore, he had been asked by many of the attendees to join politics. As an airline entrepreneur has just joined the electoral fray in Bangalore, I say Nilekani would make a good education minister. “Entering mainstream politics is a different ball game,” he insists.
We wave away offers of dessert, order replenishments of India’s soft drink of choice – lime juice with soda – and I remind him of an earlier example of his can-do optimism. A couple of years ago, I was flying to Bangalore from London with a close friend of Nilekani’s when we bumped into him at Heathrow. He was returning home after the board meeting of an international media company. When he discovered that he was the only person flying in first class, he asked that we both be upgraded on the unimpeachable logic that there was no one else around to mind.
The check-in clerk gave that idea short shrift but I am still mulling over Nilekani’s sunny outlook later that afternoon. Then, in a typically old India postscript, I arrive home to find that the password my father needed had inexplicably expired before he could pay his bill. Every optimist on India is eventually proven wrong, I think, before reminding myself that, thankfully, so is every pessimist.
‘Imagining India’ is published in the UK on Thursday by Allen Lane and is available through the FT Bookshop at £20 plus p&p (RRP £25); tel: 0870 429 5884
...........................................
Bon South
Bangalore
Lime juice with soda x3 Rs225
Mutton ishtew Rs350
Kodi miriyalu kurma Rs275
Appam x2 Rs150
VAT Rs125
Total Rs1125 (£15.50/$22.50)
...........................................
Bangalore’s brain bank
If India were to measure its development in terms of “gross domestic brainpower” then, of all its metropolises, Bangalore, in the south, would be hands-down winner, writes Joe Leahy.
Post-independence, Bangalore’s cooler climate attracted professionals, including scientists, and it became a centre for state-owned heavy industry and prestigious government research outfits, such as the Indian Institute of Science.
The biggest change came in the 1980s, however, when India’s software industry was born. Texas Instruments was the first multinational to set up shop in 1985, tapping into Bangalore’s large pool of engineers. The city quickly became a kind of Indian Silicon Valley, a magnet for India’s best technologists.
Apart from Nandan Nilekani, leading lights of this scene include his mentor, NR Narayana Murthy, the principal founder of Infosys Technologies, who is regularly touted as a candidate for the ceremonial but prestigious role of Indian president. There is also Azim Premji, who transformed Wipro, his former family consumer goods business, into India’s third largest outsourcing company.
Among the multinationals, General Electric, Microsoft, Intel and Google have set up some of their biggest research centres outside of the US in Bangalore.
For all the brilliance of its technology specialists, Bangalore remains beset with problems that are monumental even by the standards of Indian cities.
Misgovernance and poor planning have led to debilitating traffic gridlock. The city’s new airport lies on the opposite side of town from the main technology hub. With no highway or train connecting the two, the 65km journey can take three hours one way.
The local government is elected by the mostly rural population of Karnataka, the state of which Bangalore is the capital, and has little incentive to listen to the complaints of the technology industry. Narrow regionalist politicking means there are also regular tussles about whether English, the language of the technology industry, should be taught in local schools.
Two years ago, the city changed its name to the regional language word, Bengaluru, despite protests that “Bangalore” was an internationally known brand name.
Clearly, if Bangalore’s technology experts are to guarantee their city remains India’s leader in brainpower, they will have to do more than dream up new software codes. They will have to start applying their minds to the grubby business of Indian politics.
Joe Leahy is the FT’s Mumbai bureau chief
