Dr Manmohan Singh delivered the 16th Annual Convocation Address at IIM Bangalore on April 15, 1991, choosing IIMB as a forum to articulate his economic vision for India. The rest is history...
Excerpts from the speech:
Challenges on the Economic Front Today
MANMOHAN SINGH
Management education has taken firm root in our country. The IIMs have been pace setters in this regard. In this context, IIM Bangalore is be complimented that its programmes lay special emphasis on improving the effectiveness of public sector organization and public systems and underdeveloped managed sectors of the economy, such as agriculture and rural development, energy, health and population, human settlement, environment and transport. All these sectors are of tremendous scope for improving organizational efficiency and productivity of resource use in these sectors. They have to be intellectually alert, committed to the pursuit of excellence and socially involved. Profit and loss accounts of an enterprise are an important indicator of managerial effectiveness. But a comprehensive measure of managerial effectiveness must also include an awareness and involvement in wider societal concerns, such as the protection of environment, conservation of energy and concern for social justice.
Having been involved in development administration for two decades, I will focus on the current economic situation in the country and how we can overcome the acute economic crisis now facing us.
India in the 80s
In August 1987, when I left India to take up my assignment with the South Commission in Geneva, the national mood was one of great self-confidence and optimism regarding our ability to effectively tackle problems of poverty, under-development and modernization of our economy.
On the whole, our country made impressive progress in the 1980s. The growth rate of the economy went up to 5.6 per cent per annum as compared the long-term trend of 3.5 per cent. There was acceleration in the growth rate of both agriculture and industry. The poverty ratio declined sharply, broadly in line with the projection of the Sixth and Seventh Plans.
Current Economic Situation
And yet in November 1990, I found that there was a profound change in the national mood. There was a growing feeling of scepticism, self-doubt, even of despondency. Obviously , the recent political instability at the centre and the deepening emotional divide between regions, religious groups and castes had a great deal to do in changing the national mood. But the laxity in the recent years in dealing with India's fiscal and balance of payment problems and failure to press ahead with long overdue structural reforms have also been important contributory factors.
A strong and stable government at the Centre is necessary to tackle the backlog of economic reforms agenda. But in a democracy we cannot legislate for a strong and stable government. Nevertheless we can mobilize public opinion and help evolve a broad national consensus in a support of a sensible action programme of reform, in the hope that its implementation will be facilitated regardless of the character of government at the Centre.
India's twin deficits - fiscal deficit and the balance of payment deficit - have reached unsustainable limits. We have over-borrowed both at home and from abroad to finance the growth of public spending. Thus, hard decisions are needed to overcome this crisis.
However, the situation is by no means unmanageable. The magnitude of both these deficits is such that firm corrective action sustained over a period of two to three years can bring about a dramatic improvement in the macro-economic environment for development. In particular, an action programme designed to improve India's public savings rate from the low level of 1.6 per cent of the GDP reached in 1989-90 to about 4-4.5 per cent of the GDP as in the seventies can reduce both the fiscal deficit and the balance of payment deficit to a safe and sustainable level. The task ahead is to improve the fiscal situation without hurting the poor and without affecting the growth momentum built up in the 1980s.
Reducing the Fiscal Deficit
To reduce the government's fiscal deficit, it will be necessary to adopt a combination of measures involving restraint in the growth of its current expenditure, a reduction in budgetary subsidies and improved internal resource generation on the part of public sector enterprises. These involve difficult decisions and economic policy research, including a careful analysis of trade-offs, which can greatly help in improving the design of public policies.
Subsidies
At the Centre alone, fertiliser, food and export subsidies currently amount to about Rs. 10,000 crores. These subsidies cannot be sustained at their present level. Thus, alternative mechanisms have to be devised to sustain the growth of food production and exports despite a cut in fertiliser and export subsidies. A cut in fertiliser subsidy need not affect the incentive to use fertilisers, if procurement prices of agriculture products are adjusted to take into account higher produce for the market. Special measures will be needed to protect the interest of small and marginal farmers who have little marketable surplus. Higher fertiliser prices will, in all cases, increase the requirements of farm credit, which have to be met if agricultural production is not to suffer.
Similarly, if budgetary support for export promotion is to be curtailed without affecting the growth of exports, we will have to make more aggressive use of the exchange rate as well as pursue tighter fiscal and monetary policies so as to keep inflation under control.
Food subsidies raise difficult issues of social policy in a country where a large proportion of the population lives below the poverty line. However, available data shows that the present urban-oriented public distribution system does not serve the interest of those who are really poor. The feasibility of a public distribution system, specifically targeted at the more vulnerable sections of our population, is yet to be established. Maybe, greater emphasis on the provision of employment opportunities can yield a more effective approach to the achievement of food security than an expanding and expensive system of public distribution. In that event, public intervention in the food market can be reduced to stocking arrangements which can help keep prices under control even in years of scarcity.
Increased internal resource generation in public sector enterprises cannot be secured merely by increasing prices. Even then, there is a strong case for a more realistic pricing of such important inputs as water for irrigation and electricity. Deliberate under-pricing of these inputs prevents the expansion of their output and, therefore, constitutes discrimination against those not having access to these critical inputs. There should be legal sanctions to ensure that these critical inputs will in no case be priced below the cost of production.
Government Expenditure
The measure discussed above will help contain budgetary deficit. However, if a strong impact is to be made on inflationary expectations, it may be necessary to make use of income policy measures, which seek to restrain payment of additional wages, dearness allowance and dividends, for a specified period of time. The country has to be prepared for a period of strict austerity.
The current economic situation is such that no responsible political party can promise to increase government expenditure, offer tax concessions or increase subsidies for sometime to come. I suggest that a part of the election code, the Election Commission should lay down a rule that any political party which promises in its election manifesto to increase government expenditure or to grant fiscal concessions, should be obligated to state clearly as to how these concessions or additional expenditure would be financed.
In the medium-term, an effective solution of the fiscal crisis and the external deficit is vitally linked to the implementation of structural reforms designed to improve the efficiency of our economic processes. Our investment rate of 24 per cent of the GDP is not unimpressive. However, the productivity of this investment and the rate of return thereof are far from optimal.
Improving Public Sector Efficiency
Since the public sector accounts for a very large proportion of the investment in our economy and large-scale privatization is not feasible so long as the financial sector remains in the public sector, careful consideration should be given to evolving new mechanisms which contain a judicious blend of autonomy and accountability for the existing public sector enterprises. Memoranda of understanding agreed to between the government and public enterprises, setting out broad performance norms can prove helpful but only if the government as the owner has the technical expertise to set realistic goals and to evaluate the performance of a public enterprise. This unfortunately does not always happen and in its absence MoUs lose much operational significance.
In this context, there has to be as objective discussion of the future role of the public sector in India's development. Clearly, public enterprises, which generate substantial internal resources while operating in a competitive environment, do make a positive contribution to the growth process. However, loss-making enterprises which are found to be patently unviable are drag on the economy. And yet, out of concern for unemployment and the local economy of the area in which these enterprises operate, government has found it difficult close down such enterprises. Their closure will be facilitated, if location specific cost-effective strategies to protect the interest of the affected workers are devised. These may involve the establishment of new industries as well retaining of surplus workers. A social safety net has to be devised so that the cost of adjustment is not borne exclusively by the workers. Management research can make an important contribution in this regard.
On a broader plane, the future of the public sector has to be considered against the background of manifest reluctance of politicians to give public sector enterprises sufficient functional autonomy and to permit the establishment of an arms-length relationship between government and these enterprises. When public sector enterprises are engaged in routine activities, the consequences are not serious. But when they are called upon to take quick decisions involving high degree of risk and uncertainty, the consequences of delays in decision-making processes can be very serious.
The time has, therefore, come when there ought to be serious public debate about the continuing validity of the Industrial Policy Resolution of 1956, earmarking certain areas for exclusive development by the public sector.
Experience shows that lack of effective competition and concentration of economic power, either in the hands of politicians or private industrialists, can prove detrimental to public interest. Thus, public enterprises functioning in a competitive environment will have a greater incentive to perform well. It will also be much easier then to assess their performance on an objective basis.
The Private Sector: Going Global
Additionally, in order to inverse the productivity of investments in the private sector, we ought to take a fresh look at the regulatory framework consisting of industrial licensing and the MRTP Act, which influences the conduct of the private sector. There is a broad consensus among economists that regulatory policies which come in the way of increased competition among Indian firms in the domestic market have outlived their utility and that our firms must be free to expand and diversify in the light of their perceptions of market opportunities. At the same time, the government will need to adopt effective measures to control monopolistic or restrictive trade practices.
All over the world, economies of large-scale are an important feature of most industrial processes. Restrictions on capacity expansion and diversification encourage fragmentation of capacities, generate undeserved profits, and reduce the incentive to control costs and to upgrade quality. They constitute a major hindrance to the emergence of Indian firms as internationally competitive enterprises.
There will still be need to ensure that scarce resource are not diverted to patently low priority activities. But this concern can be met by having a short negative list of industries where further investment is to be discouraged. Fiscal policy can also be used to promote this objective.
Promoting Small-scale Industries and Backward Areas
There will also be a need to protect the interests of small-scale industries against unfair competition from units in the large-scale sector. But this concern can be met by having a strong policing of restrictive trade practices and through promotional devices (adequate access to credit, marketing support and technical assistance designed to upgrade the quality of products), which help small-scale units overcome the adverse effects of market imperfection at their source.
There may also be a need to direct new industrial investments to backward areas. But this concern can be taken care of by specifying the list of backward districts where alone new investments will be allowed in a given Plan period. With these safeguards, industrial licensing, subjecting each application to a detailed investigation, can be dispensed with.
Foreign Trade
The regulatory mechanism relating to foreign trade also merits a fresh look. Since the country is faced with acute balance of payments difficulties, import restrictions cannot be dispensed with. However, it would be most unfortunate if the present foreign exchange difficulties are used to perpetuate the regime of quantitative import controls. The harmful effects of such regime on allocative efficiency, employment and income distribution have been well documented. Over time, therefore, concerted efforts must be made to replace import restrictions by tariffs and the level of effective protection reduced so as to promote the growth of efficient import substitution and exports.
Tariffs and tax policies have to pay special attention to the modernisation of India's capital goods industry. We have to evolve a medium-term programme, so that India's industrial economy becomes internationally competitive over a reasonable period of time. The realisation of India full export potential has been stifled by indiscriminate encouragement to import substitution, implicit in our industrial and trade policies. Full participation in the emerging global economy will necessitate progressive liberalisation of import controls and exchange controls. A well thought out plan has to be devised to make the rupee a convertible currency in a reasonable period of time, in any case before the end of the decade.
Overall, it has to be appreciated that India's industrial economy is now too large to be effectively regulated by discretionary administrative controls. They promote neither efficiency nor equity. Very often, they become instruments of large-scale corruption and arbitrariness in the public administration. Therefore, as far as possible, the emphasis in the future on the design of regulatory mechanisms must shift to non-discrimination and greater transparency.
Tax Reforms
Finally, the reform of tax system, both at the centre and in the states, also requires priority attention. India needs expanding tax revenues for financing essential rural infrastructure, for universalising access to basic social services like education and health, and in support of anti-poverty development programmes. These activities can not be taken care of by the market forces. Nor can they be financed by borrowings. We need, therefore, a broad-based, moderately progressive and elastic tax system, so that tax revenues can increase faster than national income growth even without frequent revision of tax rates. More emphasis has to be laid on broadening the tax base and on improving the efficiency of tax administration than frequent jacking up of tax rate, which very often cannot be made effective. Moreover, the tax structure should have built in incentives to promote savings and reward risk-bearing activities. Financing needs of local authorities must also receive greater attention if decentralization is to become an effective instrument of development.
Challenges before managers
India is currently faced with a very difficult economic situation. But there is no cause for despair. Our economy and polity have considerable built in resilience. What the country needs is a pragmatic set of policies, involving a judicious blend of efficiency and equity around which we can mobilise public opinion. Institutes of higher learning can play a major role in helping to evolve such an action programme.
We are on the threshold of a new century and a new millennium. Science and technology have now emerged as a major determinant of power and wealth of nations. The growth of science and technology makes it possible as never before that chronic poverty need not be the inevitable lot of millions of people in our country. However, the extent to which new scientific and technical knowledge is incorporated into production process depends on the vision and motivation of our managers and entrepreneurs. Thus, graduates of institutes like IIM Bangalore, are builders of tomorrow's India. Their creative abilities will greatly influence the place that India occupies in the global economy. They have a challenging and exciting task. The nation has a big stake in their success.
Note: Dr Manmohan Singh was Economic Adviser to the Prime Minister and Chairman, University Grants Commission, when the address was delivered. He obtained his Masters degrees in Economics from Punjab and Cambridge Universities, and DPhil from Oxford University. He has served as the Governor of Reserve Bank of India, the Union Finance Minister during 1991-96, and Prime Minister during 2004-09; currently he is serving his second term as Prime Minister in the 15th Lok Sabha.
Dr Manmohan Singh delivered the 16th Annual Convocation Address at IIM Bangalore on April 15, 1991, choosing IIMB as a forum to articulate his economic vision for India. The rest is history...
Excerpts from the speech:
Challenges on the Economic Front Today
MANMOHAN SINGH
Management education has taken firm root in our country. The IIMs have been pace setters in this regard. In this context, IIM Bangalore is be complimented that its programmes lay special emphasis on improving the effectiveness of public sector organization and public systems and underdeveloped managed sectors of the economy, such as agriculture and rural development, energy, health and population, human settlement, environment and transport. All these sectors are of tremendous scope for improving organizational efficiency and productivity of resource use in these sectors. They have to be intellectually alert, committed to the pursuit of excellence and socially involved. Profit and loss accounts of an enterprise are an important indicator of managerial effectiveness. But a comprehensive measure of managerial effectiveness must also include an awareness and involvement in wider societal concerns, such as the protection of environment, conservation of energy and concern for social justice.
Having been involved in development administration for two decades, I will focus on the current economic situation in the country and how we can overcome the acute economic crisis now facing us.
India in the 80s
In August 1987, when I left India to take up my assignment with the South Commission in Geneva, the national mood was one of great self-confidence and optimism regarding our ability to effectively tackle problems of poverty, under-development and modernization of our economy.
On the whole, our country made impressive progress in the 1980s. The growth rate of the economy went up to 5.6 per cent per annum as compared the long-term trend of 3.5 per cent. There was acceleration in the growth rate of both agriculture and industry. The poverty ratio declined sharply, broadly in line with the projection of the Sixth and Seventh Plans.
Current Economic Situation
And yet in November 1990, I found that there was a profound change in the national mood. There was a growing feeling of scepticism, self-doubt, even of despondency. Obviously , the recent political instability at the centre and the deepening emotional divide between regions, religious groups and castes had a great deal to do in changing the national mood. But the laxity in the recent years in dealing with India's fiscal and balance of payment problems and failure to press ahead with long overdue structural reforms have also been important contributory factors.
A strong and stable government at the Centre is necessary to tackle the backlog of economic reforms agenda. But in a democracy we cannot legislate for a strong and stable government. Nevertheless we can mobilize public opinion and help evolve a broad national consensus in a support of a sensible action programme of reform, in the hope that its implementation will be facilitated regardless of the character of government at the Centre.
India's twin deficits - fiscal deficit and the balance of payment deficit - have reached unsustainable limits. We have over-borrowed both at home and from abroad to finance the growth of public spending. Thus, hard decisions are needed to overcome this crisis.
However, the situation is by no means unmanageable. The magnitude of both these deficits is such that firm corrective action sustained over a period of two to three years can bring about a dramatic improvement in the macro-economic environment for development. In particular, an action programme designed to improve India's public savings rate from the low level of 1.6 per cent of the GDP reached in 1989-90 to about 4-4.5 per cent of the GDP as in the seventies can reduce both the fiscal deficit and the balance of payment deficit to a safe and sustainable level. The task ahead is to improve the fiscal situation without hurting the poor and without affecting the growth momentum built up in the 1980s.
Reducing the Fiscal Deficit
To reduce the government's fiscal deficit, it will be necessary to adopt a combination of measures involving restraint in the growth of its current expenditure, a reduction in budgetary subsidies and improved internal resource generation on the part of public sector enterprises. These involve difficult decisions and economic policy research, including a careful analysis of trade-offs, which can greatly help in improving the design of public policies.
Subsidies
At the Centre alone, fertiliser, food and export subsidies currently amount to about Rs. 10,000 crores. These subsidies cannot be sustained at their present level. Thus, alternative mechanisms have to be devised to sustain the growth of food production and exports despite a cut in fertiliser and export subsidies. A cut in fertiliser subsidy need not affect the incentive to use fertilisers, if procurement prices of agriculture products are adjusted to take into account higher produce for the market. Special measures will be needed to protect the interest of small and marginal farmers who have little marketable surplus. Higher fertiliser prices will, in all cases, increase the requirements of farm credit, which have to be met if agricultural production is not to suffer.
Similarly, if budgetary support for export promotion is to be curtailed without affecting the growth of exports, we will have to make more aggressive use of the exchange rate as well as pursue tighter fiscal and monetary policies so as to keep inflation under control.
Food subsidies raise difficult issues of social policy in a country where a large proportion of the population lives below the poverty line. However, available data shows that the present urban-oriented public distribution system does not serve the interest of those who are really poor. The feasibility of a public distribution system, specifically targeted at the more vulnerable sections of our population, is yet to be established. Maybe, greater emphasis on the provision of employment opportunities can yield a more effective approach to the achievement of food security than an expanding and expensive system of public distribution. In that event, public intervention in the food market can be reduced to stocking arrangements which can help keep prices under control even in years of scarcity.
Increased internal resource generation in public sector enterprises cannot be secured merely by increasing prices. Even then, there is a strong case for a more realistic pricing of such important inputs as water for irrigation and electricity. Deliberate under-pricing of these inputs prevents the expansion of their output and, therefore, constitutes discrimination against those not having access to these critical inputs. There should be legal sanctions to ensure that these critical inputs will in no case be priced below the cost of production.
Government Expenditure
The measure discussed above will help contain budgetary deficit. However, if a strong impact is to be made on inflationary expectations, it may be necessary to make use of income policy measures, which seek to restrain payment of additional wages, dearness allowance and dividends, for a specified period of time. The country has to be prepared for a period of strict austerity.
The current economic situation is such that no responsible political party can promise to increase government expenditure, offer tax concessions or increase subsidies for sometime to come. I suggest that a part of the election code, the Election Commission should lay down a rule that any political party which promises in its election manifesto to increase government expenditure or to grant fiscal concessions, should be obligated to state clearly as to how these concessions or additional expenditure would be financed.
In the medium-term, an effective solution of the fiscal crisis and the external deficit is vitally linked to the implementation of structural reforms designed to improve the efficiency of our economic processes. Our investment rate of 24 per cent of the GDP is not unimpressive. However, the productivity of this investment and the rate of return thereof are far from optimal.
Improving Public Sector Efficiency
Since the public sector accounts for a very large proportion of the investment in our economy and large-scale privatization is not feasible so long as the financial sector remains in the public sector, careful consideration should be given to evolving new mechanisms which contain a judicious blend of autonomy and accountability for the existing public sector enterprises. Memoranda of understanding agreed to between the government and public enterprises, setting out broad performance norms can prove helpful but only if the government as the owner has the technical expertise to set realistic goals and to evaluate the performance of a public enterprise. This unfortunately does not always happen and in its absence MoUs lose much operational significance.
In this context, there has to be as objective discussion of the future role of the public sector in India's development. Clearly, public enterprises, which generate substantial internal resources while operating in a competitive environment, do make a positive contribution to the growth process. However, loss-making enterprises which are found to be patently unviable are drag on the economy. And yet, out of concern for unemployment and the local economy of the area in which these enterprises operate, government has found it difficult close down such enterprises. Their closure will be facilitated, if location specific cost-effective strategies to protect the interest of the affected workers are devised. These may involve the establishment of new industries as well retaining of surplus workers. A social safety net has to be devised so that the cost of adjustment is not borne exclusively by the workers. Management research can make an important contribution in this regard.
On a broader plane, the future of the public sector has to be considered against the background of manifest reluctance of politicians to give public sector enterprises sufficient functional autonomy and to permit the establishment of an arms-length relationship between government and these enterprises. When public sector enterprises are engaged in routine activities, the consequences are not serious. But when they are called upon to take quick decisions involving high degree of risk and uncertainty, the consequences of delays in decision-making processes can be very serious.
The time has, therefore, come when there ought to be serious public debate about the continuing validity of the Industrial Policy Resolution of 1956, earmarking certain areas for exclusive development by the public sector.
Experience shows that lack of effective competition and concentration of economic power, either in the hands of politicians or private industrialists, can prove detrimental to public interest. Thus, public enterprises functioning in a competitive environment will have a greater incentive to perform well. It will also be much easier then to assess their performance on an objective basis.
The Private Sector: Going Global
Additionally, in order to inverse the productivity of investments in the private sector, we ought to take a fresh look at the regulatory framework consisting of industrial licensing and the MRTP Act, which influences the conduct of the private sector. There is a broad consensus among economists that regulatory policies which come in the way of increased competition among Indian firms in the domestic market have outlived their utility and that our firms must be free to expand and diversify in the light of their perceptions of market opportunities. At the same time, the government will need to adopt effective measures to control monopolistic or restrictive trade practices.
All over the world, economies of large-scale are an important feature of most industrial processes. Restrictions on capacity expansion and diversification encourage fragmentation of capacities, generate undeserved profits, and reduce the incentive to control costs and to upgrade quality. They constitute a major hindrance to the emergence of Indian firms as internationally competitive enterprises.
There will still be need to ensure that scarce resource are not diverted to patently low priority activities. But this concern can be met by having a short negative list of industries where further investment is to be discouraged. Fiscal policy can also be used to promote this objective.
Promoting Small-scale Industries and Backward Areas
There will also be a need to protect the interests of small-scale industries against unfair competition from units in the large-scale sector. But this concern can be met by having a strong policing of restrictive trade practices and through promotional devices (adequate access to credit, marketing support and technical assistance designed to upgrade the quality of products), which help small-scale units overcome the adverse effects of market imperfection at their source.
There may also be a need to direct new industrial investments to backward areas. But this concern can be taken care of by specifying the list of backward districts where alone new investments will be allowed in a given Plan period. With these safeguards, industrial licensing, subjecting each application to a detailed investigation, can be dispensed with.
Foreign Trade
The regulatory mechanism relating to foreign trade also merits a fresh look. Since the country is faced with acute balance of payments difficulties, import restrictions cannot be dispensed with. However, it would be most unfortunate if the present foreign exchange difficulties are used to perpetuate the regime of quantitative import controls. The harmful effects of such regime on allocative efficiency, employment and income distribution have been well documented. Over time, therefore, concerted efforts must be made to replace import restrictions by tariffs and the level of effective protection reduced so as to promote the growth of efficient import substitution and exports.
Tariffs and tax policies have to pay special attention to the modernisation of India's capital goods industry. We have to evolve a medium-term programme, so that India's industrial economy becomes internationally competitive over a reasonable period of time. The realisation of India full export potential has been stifled by indiscriminate encouragement to import substitution, implicit in our industrial and trade policies. Full participation in the emerging global economy will necessitate progressive liberalisation of import controls and exchange controls. A well thought out plan has to be devised to make the rupee a convertible currency in a reasonable period of time, in any case before the end of the decade.
Overall, it has to be appreciated that India's industrial economy is now too large to be effectively regulated by discretionary administrative controls. They promote neither efficiency nor equity. Very often, they become instruments of large-scale corruption and arbitrariness in the public administration. Therefore, as far as possible, the emphasis in the future on the design of regulatory mechanisms must shift to non-discrimination and greater transparency.
Tax Reforms
Finally, the reform of tax system, both at the centre and in the states, also requires priority attention. India needs expanding tax revenues for financing essential rural infrastructure, for universalising access to basic social services like education and health, and in support of anti-poverty development programmes. These activities can not be taken care of by the market forces. Nor can they be financed by borrowings. We need, therefore, a broad-based, moderately progressive and elastic tax system, so that tax revenues can increase faster than national income growth even without frequent revision of tax rates. More emphasis has to be laid on broadening the tax base and on improving the efficiency of tax administration than frequent jacking up of tax rate, which very often cannot be made effective. Moreover, the tax structure should have built in incentives to promote savings and reward risk-bearing activities. Financing needs of local authorities must also receive greater attention if decentralization is to become an effective instrument of development.
Challenges before managers
India is currently faced with a very difficult economic situation. But there is no cause for despair. Our economy and polity have considerable built in resilience. What the country needs is a pragmatic set of policies, involving a judicious blend of efficiency and equity around which we can mobilise public opinion. Institutes of higher learning can play a major role in helping to evolve such an action programme.
We are on the threshold of a new century and a new millennium. Science and technology have now emerged as a major determinant of power and wealth of nations. The growth of science and technology makes it possible as never before that chronic poverty need not be the inevitable lot of millions of people in our country. However, the extent to which new scientific and technical knowledge is incorporated into production process depends on the vision and motivation of our managers and entrepreneurs. Thus, graduates of institutes like IIM Bangalore, are builders of tomorrow's India. Their creative abilities will greatly influence the place that India occupies in the global economy. They have a challenging and exciting task. The nation has a big stake in their success.
Note: Dr Manmohan Singh was Economic Adviser to the Prime Minister and Chairman, University Grants Commission, when the address was delivered. He obtained his Masters degrees in Economics from Punjab and Cambridge Universities, and DPhil from Oxford University. He has served as the Governor of Reserve Bank of India, the Union Finance Minister during 1991-96, and Prime Minister during 2004-09; currently he is serving his second term as Prime Minister in the 15th Lok Sabha.