ET GBS: India’s youth will take it to new heights
By: Stephen A Schwarzman, Chairman, Blackstone
India and the United States have never been closer. We trade more than ever. We collaborate politically in ways that would have been inconceivable 30 years ago. And four million Indian Americans ensure the vibrancy of our cultural ties.
Blackstone, the company I founded, began investing in India in 2006. We were under no illusions about the challenge, but one of my guiding principles in life and business is that if you are going to dedicate your life to a project, you should choose one with the potential to be huge. India’s rise has been nothing short of astonishing.
Over the past five years, India’s GDP grew by 7.5%, making it the fastest growing economy in the world. Last year, according to the IMF, even while growth was slowing, India surpassed France and the UK to become the world’s fifth largest economy in terms of nominal GDP.
And that barely scratches the surface of India’s potential. The huge migration of people from rural areas to cities, coupled with advances in productivity have lifted tens of millions of people out of poverty.
India will also soon be the most populous country, surpassing China, with half its population under the age of 25.
Continue with Reforms
If India’s youth are anything like the young people I know, they crave for opportunity and the education and training required to seize it. Given the chance, in a stable democracy with strong institutions, they will continue to drive India towards even greater heights.
In my book “What it Takes: Lessons in the Pursuit of Excellence,” I share my journey and the lessons I have learned on what it takes to create a full and purposeful life, regardless of where you are in the world, or what your status or ambitions may be.
No life, after all, moves in a straight line, whether the life of an entrepreneur or a country. There are always hardships and setbacks. But the resilience you show in the face of adversity, not the adversity you face, is what defines you.
Today, there is no higher task for India’s leaders than developing the talent and resilience of their vast, youthful population; removing the obstacles to their progress; and ensuring that opportunity is widely shared.
The first step is simply for India to continue down the path of economic liberalisation. Since 1991, successive governments have rolled back many of the institutional controls which hindered growth. The bureaucracy which Prime Minister Nehru once described as a “steel frame” protecting India from harm, has become much more flexible and pragmatic.
Thanks to these reforms, in the past three years alone, India has risen 68 positions in the global rankings for ease of doing business. But more can and should be done.
India’s infrastructure, for example, needs investment on a scale which can only be achieved by high functioning and trusting public-private partnerships. Prime Minister Modi’s government has built confidence and momentum by making India’s real estate industry more transparent and structured. This will attract investors and help the government achieve its goal of providing affordable housing for twenty million people by 2022.
Cultural and social changes will also be needed to unleash India’s entrepreneurial energy. Only 23% of Indian women are in paid work, compared to 78% of men, among the lowest levels in the world. Enabling women to take a greater role in economic life will transform India’s fortunes.
India’s growth may have slackened recently, but Blackstone’s investment teams have a perspective which goes beyond the headlines. In the IT hubs, they see a growing, educated and affluent middle class. Across the country, they see hundreds of millions of people using the Internet in the most creative ways — and hundreds of millions more yet to come online. They meet talented management teams and entrepreneurs in financial services, IT, consumer products and industry.
All of this bodes well for India’s youth as they seek to build a more equal, more prosperous and more sustainable economy.
Today, the rules of global trade are being rewritten. We are seeing skirmishes between old friends. But we are also seeing deals getting struck and negotiations and stalemates that seem unresolvable getting resolved. One cycle ends and another begins. The reward for the resilient is the kind of friendship we now see between India and the US, and the prospect of many more prosperous years ahead.