DAVOS: The official Indian team at Davos is gung-ho about reforms. The one thing that is pressed home at all India-related sessions is the "fantastic" growth trajectory of the Indian GDP — averaging eight per cent over the past three years and projected to go beyond nine per cent in the next five years.

Yet even as Kamal Nath, Montek Singh Ahluwalia and Ashwini Kumar go all out to project Brand India, they also make it a point to underline that growth has to be inclusive or it could prove to be counterproductive.

The dichotomy — between prosperous India and poor India — came out sharply at a luncheon interactive session on "India's reform agenda," which was targeted at potential foreign investors. Opening the session, management guru C.K. Prahlad said India was a confusing place both for outsiders and for Indians — it was on the verge of touching 10 per cent growth, its markets were booming, at the same time it had to contend with abject poverty. "India is a place of contradictions and reforms is where these contradictions play out most — because reforms are as much political as economic."

Commerce and industry Minister Kamal Nath said India's growth agenda had positioned the country as a key driver of global growth: "The intrinsic worth of India's strong macroeconomic fundamentals, institutional capabilities and solid corporate returns are now being recognised by international investors and these are reflected in the record flow of investments into India." That said, he came to the country's biggest challenge: "Three hundred and fifty million Indians earn less than a dollar a day. How do we make them employable, how do we impart them skills?"

The Minister told the gathering that in a democratic country, any reform had to have widespread political consensus. The Indian reforms story thus far was a story of correct calibration and this had to be the approach for the second round of reforms as well.

The Minister was candid enough to admit that reforms did not go down well with the voters; indeed the Narasimha Rao Government which initiated economic reforms lost the general election. "We have demonstrable areas of excellence where reforms have worked. But reforms will work with the voters only if their basic needs — roads, water, schools and hospitals — are met. But if I tell them I went to Davos to discuss reforms they will tell me to go take a walk."

Mr. Ahluwalia said that while the Government had to be the primary provider of infrastructure in the rural areas and in regions such as the Northeast, in other areas, the investment had to come from the private sector — Indian or foreign.

He said FDI was very much possible in this sector: "India would need $150 billion in the next five years to raise the infrastructure contribution to GDP from 4.7 to eight per cent. Can we get this amount? My judgment is we can."

Mr. Ahluwalia also advocated drastic reforms in education, along the lines suggested by the National Knowledge Commission. He said the Planning Commission was consulting various groups on this and will present a comprehensive education agenda as part of the 11th Five Year Plan; the aim, he said, was to raise public expenditure on education from 3.7 per cent of the GDP to 6 per cent of the GDP by the end of the 11th Plan.

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