It’s a pleasure to be with all of you here today. I am a Harvard man but my commitment to India is naturally higher and wherever there are friends of India I am happy to be there.

Dreaming is a fundamental human right and the starting point of all change. Realising a dream is the more difficult but an equally if not more important part of the dreaming. This is when the dream confronts reality and must either change reality or perish. Luckily when the dream is as broad as a national one, it never perishes.

Today I will try and present my qualitative assessment of where we are on realisation of this dream and what are some of the issues that we need to address.

India is on a roll. And it is likely to remain on the roll for a long time, because the basis of its growth is both wide and deep.

Width in terms of sectors that are competitive. Services have been so for a while. It was IT first, then BPOs, now KPOs in every conceivable field. Manufacturing is coming on stronger in sector after sector. Gems, Clothing were traditionally strong, but now Pharma, Auto Components, Steel and, yes, 2 & 3-wheelers have gained strength.

Depth in terms of the number of competitive companies in each sector. Both these are streams fed by India’s entrepreneurial culture.

The most telling evidence comes from Indian companies increasingly acquiring companies abroad. This year so far 112 foreign acquisitions have occurred valued at USD 7.2 Bn. Not counting the mega Corus-Tata Steel deal. Last year deals totaled USD 4.5 Bn up from USD 1.5 Bn in 2004. This year outward FDI would for the first time exceed growing inward FDI!

Whichever way we look, the numbers and the progress are impressive. The 4th largest economy in the world on purchasing power parity basis, 5% plus GDP growth since 1980s and 8% plus since 2003-04, Inflation around 5%, Foreign exchange reserves of USD 165 Bn, a young demographic profile, etc.

The latest World Economic Forum's "The Global Competitiveness Report" shows a marginal improvement in the global ranking of India’s growth competitiveness from 45th to 43rd. China slipped to 54th from being the 48th. So, India is now ahead of China on competitiveness. More importantly, in terms of Business Competitiveness, which is concerned with firm level competitiveness rather than the largely macroeconomic parameters of growth competitiveness, India is ranked 26th to China's 57th.

There is a buzz about India. Its short term and long term performance. To a point wherein IMF in its World Economic Outlook wondered "Is India becoming an engine for global growth?". Rightly I believe it concludes that though not yet, but very likely to.

We stand at a propitious moment in the history of our nation. While we acknowledge the challenges, -- and there are many – a world of opportunity also awaits us. Globally, India is not just a flavour of the week or the month or even the year. We are the flavour of the times. Previously, it was only China. Now it is China and India.

Both in the services and the manufacturing sector, we are poised to gain from the developments in the world economy. We are becoming internationally competitive despite the serious handicaps of lack of infrastructure, right from social infrastructure including health, education, drinking water and sanitation and, of course, physical infrastructure, power, roads, ports, etc. The key reason, however, for my optimism, is the quality and entrepreneurship of our people. We have the world’ largest pool of smart, hardworking manpower, be it in IT, manufacturing or finance. Also, and this is very important, that demographically, we will remain a country of the young even in 2025. We have to however ensure that we encash this demographic dividend by investing in their education and their skills.

If any proof was needed that it is the quality of human capital that determines the economic performance of a country, then it is India.

Though we have largely climbed out of the ditch that we had dug ourselves into during the controlled economy mindset between 1960-90, we are still at the base of the mountain that is to be climbed. But what is this mountain? Which dream will we chase?

It is clear that we have to focus on growth, but we need to make it inclusive, else we will not develop in a sustainable manner.

The fact remains that we still have unspeakable pockets of poverty in rural and urban India. The growth of the economy is skewed geographically, within income groups and among sectors. We have farmers committing suicide in droves in some areas because agriculture is no longer viable. We have some parameters like malnutrition amongst children that place us in the league of sub-saharan countries. Therefore, there is a need for a sense of proportion and a set of sensible priorities. The last government ran an "India shining" theme in its bid for re-election in 2004 but it did not strike a chord. The outcome was the result of many factors, but this slogan certainly did not work.

Growth has made a dent on poverty. From 36% people being below the poverty line in 1993, we now have 22% below it. This is progress. However, this masks wide differences between states. In some states over 40% of the people are still below the poverty line.

We have to aim for broad based, balanced growth for the sake of its social and environmental sustainability. More than that, at least to me, a dream of unbridled materialism is not very appealing. It’s a hollow dream that does not challenge the soul. Tagore's dream of India in his poem "Where the mind is without fear" is a much more worthwhile dream.

The world is multi dimensional. Economy is one axis, Society & Family are another, Politics yet another. Environment is turning out to be something one can't disregard. All of us are influenced, by all these forces. It is their balance that will determine outcomes.

Developments in any of these axes influences other axes.

Therefore, if we are to realise the Indian dream, we must be eclectic in our thinking and doing. The world does not move in a straight line. If any proof was needed, the situation in Iraq is proof that linear thinking does not always work. So, though I like Goldman Sachs projections for 2050 for India I don't take them too seriously.

Indian business has its work cut out. Develop and strengthen in the fast growing domestic market and move into overseas markets. Also, look around the corner for newer products and technologies.

We have to leverage our already good and improving position in services. We have to move up the value addition ladder and are already on this path.

For improved competitiveness in services and also for manufacturing, we have to strengthen our education system. Since most of the expansion of higher education institutions is occurring in the non-government sector, I am sure the focus would shift from quantity to quality. Entry of foreign educational institutions should in my view be encouraged. Currently there is a bit of a policy vacuum about it, which needs to be corrected.

We can not afford to neglect agriculture. Just too many people are engaged in it. With widespread subsistence farming I am not sure if market oriented farming is a practical proposition. The risks in rain fed agriculture are too high to make an input intensive strategy viable. Contract farming is in its infancy but eliciting much interest from corporates and farmers. However, I believe it will work only in pockets with irrigation, infrastructure and entrepreneurial farming communities. The likely shift to mass retailing may give a fillip to contract farming. But I believe that the existing Indian agricultural trading system, though not without its rough edges, is an efficient, low overhead operation and competing with it may not be easy. In my view dispersed industrialisation can provide the basis for a prosperous agriculture. The dormant government machinery has an important role to play in providing services to agriculture. Some private sector agro-business initiatives like e-choupal of ITC have contributed positively to rural incomes.

In 1991 we moved from a closed market to a progressively open one. But there are pervasive remnants of the closed mentality in the nooks and crannies of our government. Hence, there are a number of pending issues, most importantly in electricity and labor policy, that are not conducive for business development. There are many government policies that distort decision making - from non-merit subsidies, artificial prices, politically expedient investment incentives etc. Corruption continues to be a concern.

We in industry have to keep seeking reform and at the same time continue to do our best under conditions of no or partial reform. The momentum generated by economic growth will gradually loosen the boulders in our way.

The politician's need for re-election in a democracy sometimes makes him wary of sensible economic decision making. In India it makes him an unashamed populist. India cries for good governance and political and administrative reform; of mindsets, policies and processes.

Yet, at the same time in Bihar, one of the worst governed states, there has been a change of government a year ago on precisely this plank of development versus populism, when populism finally lost.

So, In India, for every example there is a counter example. What is clear is that the well developed or, more correctly, developed regions, for even within a state wide disparities exist, are moving ahead strongly and are having a domino effect on other states. However, non-coastal states and regions, other than around Delhi, are having difficulty in attracting investment.

There are incongruencies between words and deeds of politicians in India. Also, the composition of the parliament, wherein the ruling coalition is dependent on left parties support from the outside for its survival, is not conducive to big ticket reform. However, this government will be unable to pursue big ticket reform, but would go along with sectoral policies and decisions that are reform oriented. Reform by stealth if you please. Even this is possible because the left does not want this government to fall.

We need good governance to achieve our goal of inclusive and rapid economic growth. This will come from changes at the top and pressures from below. The pressures from below will increase, as economic and social development makes our people more ambitious, self-assured and more articulate.

To ensure that we can take hard decisions, the Lok Sabha and all the State Assemblies should go to elections simultaneously, co-terminously, and only once in five years. From 1952-62 this was very much the case. To make this possible we should ensure that a vote of no-confidence in the Leader of the House, the Prime Minister or the Chief Minister, should be, like in Germany, accompanied by a positive vote-of-confidence in an alternate party and person.

Quality of leadership is crucial in determining outcomes. Leadership is not just a matter of charisma or showmanship or public relations. It is of understanding today, it is of envisioning a better tomorrow and having the confidence in oneself and of one’s team to make our future happen. Leaders are those that deliver better outcomes. Occupying a chair does not make one a leader.

Gandhiji occupied no chair but led the country from subjugation to freedom, striding like a colossus. . We will do well to remember Gandhiji’s teachings of the seven social sins – wealth without work, pleasure without conscience, education without character, commerce without morality, science without humanity, worship without sacrifice and politics without principles. It is precisely because we have ignored these teachings that we have under-achieved.

India is a land of thousands of gods, many peoples. Of many ideas and dreams coexisting for a long time. I believe this will continue to be the pattern of Indian culture and the Indian economy. The Indian ethos of tolerance, of assimilation, is a great asset. We may be influenced by the world but will not be swept off our feet by it. India is a country with some turmoil on the surface, but it has innate stability, as behoves an open, democratic society with a free judiciary and press.

It is not important for me whether or not India is a so-called superpower, say, 20 years from now. My dream for India, 20 years from today, is a country where poverty has been banished. Where parental income is not a barrier to good health and education, where talent is encouraged, achievement celebrated and the weak can also live with dignity. A country retaining its age-old humanism, tolerant of differences and with a world view that is a cross between that of a yogi and an entrepreneur. A country that retains its soft power in offering an alternative, attractive way of life, that celebrates life, to the world. Where the past and the future complement each other in the present.

Over a century ago, Swami Vivekanand, a great cultural nationalist, who believed in India, its people and their destiny, said something that still resonates remarkably. I can do no better to summarise my thoughts than to quote him. He said. “Let us all work hard, my brethren. On our work depends the coming of India of the future. Arise and awake and see her rejuvenated, more glorious than she ever was-this motherland of ours.” If there can be a thought that drives us in India it is this. If such a thought drives a country, what can stop it from realising its dreams?

Thank you, Sir.