Episode 12: India on the 74th Independence Day
About Jayant Sinha:
On the momentous occasion of India’s 74th Independence Day, I have with me a very special guest on The One Percent Project, Mr Jayant Sinha, Member of Indian Parliament and former Minister of state of finance & civil aviation government of India. Mr Sinha is alumni of some of the most prestigious universities across the world, the Indian Institute of Technology, the University of Pennsylvania and Harvard Business School. He had a remarkable corporate career prior to joining politics, from heading the global IT practise at McKinsey to impact investing at Courage Capital and Omidyar Network.
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In this conversation, he talks about:
His early life and career.
How his education and corporate experience have helped him with good governance.
His views on grass-root entrepreneurship and if migrant workers will become the new micro-entrepreneurs.
The recent success of Jio in attracting foreign capital.
How governments need to plan for the future based on the learnings of COVID-19.
And finally, his vision for India and its youth.
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Transcript:
*The transcripts are not 100% accurate.
Pritish: Thank you, Mr. Sinha, to be on The One Percent Project.
Jayant Sinha: Thank you very much, Pritish, for having me. Very glad to be with you and all your listeners this afternoon from Delhi.
Pritish: You were born in a family of high achievers with a strong influence of public service, Did you always think of getting into politics or civil service?
Jayant Sinha: Not at all, Pritish. I did grow up in a family of people who had dedicated themselves to the service of India to the nation. And so, obviously, I always did want to contribute and give back to the country. But as you pointed out, I grew up in a household surrounded by books by learning, by lots of very successful cousins who had gone on to do really, really very well. So, there were lots of role models around.
And the role model that I picked and I thought best fitted what I would like to do in my life was one of my older cousins who had gone to IIT Kanpur and then went to the US. So naturally, I also gave the IIT exam, got into IIT Delhi, and then when I got a scholarship to go to the US, I went to the US and I was there for many years of course.
Pritish: Yes, you have an education from IIT. You have a Master's from the University of Pennsylvania, and an MBA from Harvard. And then you moved to McKinsey, where you spent 12 years heading the IT and the software division and then into investments with courage capital and Omidyar network. What learnings from education and your professional background helps you build a better India?
Jayant Sinha: Pritish, my education and professional experiences have shaped me as a person, and they contribute greatly to my work as a public servant. I think the foundation for my way of looking at the world is really my education, which has taught me to be very structured and systematic in my thinking, which has taught me to be very fact-based, be very scientific in my approach, and that really is the foundation for how I look at the world and I think about problems.
Then, of course, my professional career has, given me, the skills to look at issues and problems in a very strategic way to understand, what are the salient issues that need to be resolved to gain traction on any set of issues. And once you resolve it at a strategic level, the imperatives of execution, being very performance-oriented, being very outcomes-oriented, all of those factors become quite important as well. So, that also comes from my corporate background.
And then finally, from my corporate background, the necessity to make sure that everybody is on board, everybody is motivated that they are aligned with what the performance expectations are, performance targets are, just the people side of dealing with issues dealing with problems also is something that I have taken away from my professional career. So, that really is how my educational experiences have shaped me.
But I will add on to that the fact that because I've been trained as an engineer because I've spent so much time at McKinsey, I'm very analytical in the way in which I look at problems and try to assess, what are the 4, 5, 6 things that really define a particular situation? What are the causal forces at work? How do you deal with those? Where are the big sort of leverage points? How do we attack those leverage points?
That mindset of being very systems-oriented, very analytical in one's thinking, I think that comes from being an engineer, and then of course, spending many, many years at McKinsey, where we do really specialize in solving difficult problems.
Pritish: You have a keen interest in innovation and entrepreneurship. What are your thoughts on grassroot innovation? And do you see the migrant workers as a new set of micro-entrepreneurs of India who are going to enlighten and empower villages and towns?
Jayant Sinha: Pritish, India is a very, very entrepreneurial country, and I'm saying that even as a distinct between involuntary entrepreneurship and voluntary entrepreneurship. Involuntary entrepreneurship is when people have no other choice but to get into business because they couldn't get a job. So, there is a large number of people who are forced to do that. Nonetheless, very many Indians, have the mindset where they feel like they've got to work for themselves, they've got to set up their businesses, they've got to grow their businesses, and so on. So, India has always been a very entrepreneurial country, and we've got a very rich tradition of entrepreneurship.
Now, what we need to add to that is technology. It is thinking globally. These are the kinds of aspects that we need to bring to our entrepreneurs. And then of course, support them with the necessary capital. So, even as they are thinking about their business, they are also figuring out how their business can scale, how their business can attract the right amount of capital, so that they can become a very successful global class.
So, innovation and entrepreneurship, of course, is vital for India's growth, but it's very important that we add technology, we add a global perspective, and we add capital so that our entrepreneurs can flourish and grow quickly.
Pritish: Okay. Your 2005 HBR article strategies that fit emerging market confirms the recent success of Jio’s success, which is basically attracting international capital from large tech and PE firms. What other sectors do you see need this kind of boost and why?
Jayant Sinha: Pritish, virtually every sector of the Indian economy, like it does elsewhere around the world also, can benefit from innovation and entrepreneurship. With Jio of course, it has transformed telecom in India, and now it's looking to transform retail and digital entertainment as well.
Similarly, if you look at some of the other great and successful companies that have flourished in the last few decades in India. You look at HDFC Bank that has really transformed the way we should think about consumer banking, retail banking, they've done a fantastic job.
Similarly, if you look at IT services, where we've got TCS, Infosys, Wipro, HCl, all of these companies together have really built up and created a very important sector for India. And then of course, in aviation, which I know well if you look at how successful IndiGo, SpiceJet,
Vistara has been, you can see that the right business models, the right entrepreneurs can really transform entire sectors and bring great benefits to the people of India.
Pritish: The 2020 pandemic is a global awakening on multiple fronts for countries, governments, as well as general economic on health care, global warming, as well as geopolitical relations. How do you see governments should gear up for the future?
Jayant Sinha: Governments are gearing up for the future, Pritish. And I think what's most notable about the way India has done with the pandemic is that not only have we focused on relief, which, of course, has been extensive, we have 800 million people right now that are being supplied with food grains. We have some, I think the number is some 40 people who have joined on accounts right now, who are benefiting from this cash transfer programs that we have undertaken.
So, we've done relief on a very mass epic scale that I don't think has ever been attempted in human history before. So, we really focused on the ones who are most vulnerable, the ones who are misleading, and we are providing them with that relief.
But even as you're providing them relief under the honourable Prime Minister's vision of Aatm Nirbhar Bharat we have also taken transformational reform initiatives. And that's happened in agriculture, that's happened in commercial coal mining. It's happened in defence production. To an extent, it's happened in banking as well in terms of the support that we rolled out for NDFC and so on.
So even as the world has been focusing largely on relief and you have that at an epic scale, in India, very notably, we've also focused on recovery and reform. And that also is... is spurring India's economy forward.
So, as I said, governments have been proactive, governments have been taking important steps. But in India, we have not just limited ourselves to relief, but we've also focused on a very fast recovery as well.
Pritish: In the late 80s, India took a strategic decision of investing time and resources into software and technology. And other countries, on the other hand, went into investing time into infrastructure. Looking back, both of them have given great dividends to different countries. And for us, IT has worked out very well. Do you think we should have first started with infrastructure and then come to software?
Jayant Sinha: I don't think that they are decoupled from each other. Of course, for even software, we've had to build infrastructure. Obviously, we built the telecom infrastructure. We built large new cities. I mean, the growth of Bangalore, to some extent, has been because of IT services. The growth of Hyderabad has been because of IT services. The growth of Gorga has been because of IT services.
So, even... even when we talk about IT services, we have to recognize there had to be tremendous infrastructure development, to support the growth of that sector. And certainly, anybody who's been in and out of Bangalore airport recognizes, what a spectacular airport that is. And it's obviously being expanded and there is a second runway that's being added. All of that is to actually spur the growth of information technology and technology in general.
But even as we are doing that, we are also, building new infrastructure, world-class infrastructure in India today, highways, ports, airports, more Telecom, obviously rolling out 4G and 5G as well. So, the 2 go hand in hand. And I think it's... it's a false trade-off. It's an unnecessary sort of trade-off to say that you do one or you do the other. They both go hand in hand.
Pritish: What kind of financial reforms do you think the country needs?
Jayant Sinha: Financially, we've done very many important things in the last few years. Obviously, we have further opened up the financial sector. The growth of the AIFs in the last few years has been extraordinary. I was in the Ministry of Finance when we really got the AIF sector to start to take off, and now there are lakhs of crores that are in alternative assets.
So, we really liberalized and opened up, that aspect of capital markets. We've made it much easier for firms to list, for them to distinct and nationally streamlined company regulation. So, there's been a number of very important steps that have already been taken.
The really important next set of activities is to further strengthen our public sector banks to ensure that they're very efficient, that they're technology-driven, and that they can compete with the best financial institutions in the world. And certainly, when we look at our leading public-sector banks, whether it’s State Bank of India or Bank of Baroda, you can see that they're rapidly getting to that level as well. But right now, the most important thing in terms of financial sector reforms is really to continue to strengthen the public sector banks.
Pritish: What is the message for the Indian youth?
Jayant Sinha: My message to all young people is to really be hopeful and optimistic. We have a tremendous growth prospect in India. We have a very successful, very capable government in place that has been executing an extraordinary reform agenda. And therefore, the prospects for the future are very, very bright. And young people should skill themselves, they should be worldly-wise. They should understand what's happening in the world. They should stay on top of current trends. And they should make sure that they are very, very technology savvy because that's kind of where the world is heading.
Pritish: Your closing remarks on the commencement of the 73rd year of independence.
Jayant Sinha: The best is yet to come to, Pritish. Today has been a historic day in India because the honourable Prime Minister laid the foundation stone for the historic RAM mandir that's being built in Ayodhya. And it's an extraordinary step forward for India's culture, India's heritage. Bhagwan Ram is Maryada Purushottam. He is a role model for all of us and really the foundation of India's culture and heritage, which has spread all over the world.
So, it's a new awakening for India, and it's a moment that we should all cherish and treasure. And India therefore continues to march forward into the future with tremendous hope and strength.
Pritish: Great. And rapid-fire, 3 questions, 1 word, 1 sentence, please.
A book or a blog that has influenced your work and personal life.
Jayant Sinha: Lord of the Rings.
Pritish: The hardest thing about your job.
Jayant Sinha: Making sure that I have enough time for my family as well.
Pritish: What do you know that you didn't know before you joined politics?
Jayant Sinha: How hard you have to work as a member of parliament.
Pritish: Thank sir Sinha for your time. It was a pleasure speaking to you.
Jayant Sinha: Thank you very much, Pritish.