Premji's five mantras to transform India

Wipro Chairman Azim Premji on Tuesday said India needs to focus on five priority areas to achieve “social transformation”, a situation that ensures individual well-being, plugs resource wastage and helps develop the economy.

Delivering the JRD Tata Memorial Lecture on invitation by industry body Assocham, Premji mooted a five-fold path that emphasises primary education and heathcare, and overhauls laws related to land, power and water resources.

Premji also stressed that India’s software industry is at a global advantage mainly because of the “salary arbitrage,” an advantage that cannot last forever.

Premji said that arbitrage opportunities between different economies are “short-term benefits”. Salary or wage differential, which fuelled the software industry and is now fuelling growth in BPO, pharma and biotechnology research, is “just one kind of arbitrage opportunity…It is most important to realise that such opportunities do not last forever,” Premji said.

He said the medium-term drivers of the Indian economy will be technological progress and changes in geo-politics, which will result in “deeper and more benefits, that will be well worth the trouble taken to develop them.” In the long-run, however, growth, according to Premji, will come from changes as widespread as global demographic organisation.

“There are many complex issues that confront the country… I am convinced the first priority is primary education,” Premji said. He added that the infant mortality rate of 70 per thousand, compared to less than 10 per thousand in the developed worked, combined with illiteracy, deprives millions of our people from benefiting from economic opportunities.

The third priorty to achieve social transformation, he said, is to overhaul land-related laws, taxation and information systems. “It is estimated that 90 per cent of land in India is subject to legal disputes over ownership. Stamp duty ranges from 8-15 per cent of property value, encouraging avoidance. On the other hand, property tax rates are low and collection is inefficient,” Premji said.

The power situation, Premji emphasised, is the “biggest drain” on the economy, and reform in this area can have a major impact on fiscal deficit of states, apart from the cost of doing business in India.

“The first investment we make before opening up any facility in the country is a power generator, which results in complete duplication of national infrastructure and resources,” Premji said in his lecture.