Fourth Annual Convocation 2015
Speech of Chief Guest
Dr Janmejaya Sinha, the Director and the faculty, students and parents, ladies and gentlemen,
It is my proud privilege, on behalf of the Board of Governors of Indian Institute of Management, (IIM) Rohtak, to welcome you all to the 4th Annual Convocation. We are pleased that the parents and relatives of the graduands have come in large numbers to share their joy on this important milestone in their lives .We are greatly honoured with the presence of our Chief Guest, Dr Janmejaya Sinha, Chairman Asia Pacific of The Boston Consulting Group. Dr Sinha has had a distinguished academic record and career, first in the Reserve Bank of India and then in BCG, where he is a member of the global executive committee. He is a very busy person, travelling across the globe frequently. In fact, he has been gracious enough to squeeze a day for us in between two international travels. We eagerly look forward to his address and to his advice to the outgoing students.
Your institute has progressed well in its short journey of 5 years. The student intake has increased from about 50 to over 150; the diversity has improved dramatically from less than 10% female students to nearly a third now, from 0% non-engineering students to over a quarter, and from less than 30% students with work experience to nearly half with work experience now. This would have certainly added to the richness in interaction and learning which would create a stronger and more holistic base for tackling real life issues. The velocity of summer and final placements as well as the average salary level has improved considerably.
The students supported by faculty have taken a very active interest in various business and social activities, especially in the sphere of girl child and women education and empowerment, which is especially relevant to this part of the country.
I regret that there has been a delay, due to unforeseen circumstances, in starting work on the new campus; but, now it is to begin soon. The land is in possession, design has been finalised, and the builders have been identified. In less than two years’ time, we will start moving to the new campus. This will give us a strong physical identity.
Our Road Ahead document is a blueprint which is under implementation by the Director and the faculty under the guidance of the board. This will enable IIM Rohtak to establish a unique and distinguished identity.
As you go out of the portals of this Institute, you will face several challenges and will come across several opportunities, some of which will come of their own and some will come up by your initiatives. I would like to touch upon the context of broader opportunities and talk about a couple of areas which you may want to look at seriously.
Quoting the 21st February 2015 issue of the Economist, “India has a rare opportunity to become the World’s most dynamic big economy”, I believe that India doesn’t have an option but to grow at 8 -10% per year in a sustained manner, if it has to reap the dividend of its young population (25 years and below), comprising nearly half of its 1.25 bn population. On the converse, by not doing so, it would bring unimaginable stress and strains in the society.
India’s GDP per person at the purchasing power parity in 2013 was $5500 which is half of China’s and one third of Brazil’s. Challenges for reaching either of these two emerging countries’ level are daunting, but doable. Most people in the rural areas in India make a living on agriculture. Small and informal sector that accounts for nearly 80% of employment has low productivity and wages. Big Companies face huge obstacles to growth due to inadequate infrastructure, uncertain supply of electricity, complicated tax laws and a plethora of rules and regulations, making it one of the most difficult countries to do business. Add it to the stress in the banking system burdened with bad loans on account of slowing down of economy as well as poor judgement – genuine or otherwise.
It requires bold actions to cut-through the inertia and get the wheels of the economy moving at a fast clip of at least 8-10%. Some positive changes are evident. First, the New Government has enunciated its resolve to crank up the growth rate. Second, it has taken some actions in its first 9 months. Third, some beneficial global events like steep oil price and commodity price reduction have taken place. A combination of these events and action has brought down the inflation to 6% and GDP growth to 7.5%. Fourth, the recent budget has given some push and a definitive road map for growth in general and for new business and start-ups in particular. Though many more actions and a committed implementation is a necessary imperative, wheels of economy is expected to turn faster.
In this back ground, I will pick out two areas where concerted action can yield disproportionate dividends towards absorbing nearly 100 million youth entering the job market in the next 10 years.
First is MAKE IN INDIA.
With the agriculture sector not being able to absorb any more manpower productively and service sector not being big enough to absorb millions coming into workforce, it is only the manufacturing sector – big, medium and small – which has the capacity to generate employment in a meaningful way for India. Its share in the economy has to increase to at least 25% of GDP to generate 25 million new jobs. Quoting a BCG report, a productivity increase of 5% per year coupled with 10% annual growth in manufacturing has the potential to add 60 million jobs by 2030.
If the time bomb of population growth is to be diffused, the action has to be on a massive scale and now. At this stage we cannot be fussy and argumentative about what. Defence production, State-owned Enterprises, exports, small medium and large size enterprises, all have to be fixed simultaneously. We need to give encouragement for creation of world class global organisations as well as for massive strengthening of excellence in small and medium industry, as in Germany and Italy, as 80% of the employment in India is generated by firms employing less than 50 workers. India has that rare and unique opportunity to create global giants as well as global brands showing excellence in a diverse variety of products and services
The second area I would like to speak about is Start Ups.
With educated young population, having entrepreneurial spirit in its DNA, explosive growth in start-ups can be a game changer. Imagine 1 million start-ups in the next decade. What a powerful force it can make. Even at an average of 10 persons per start up, it has the potential to generate nearly 10 million new jobs in non-existing areas besides making hundreds of thousands of entrepreneurs wealthy, with massive spending power. Innovation, technology and a committed sense of purpose will feed into a virtuous cycle of expansion, growth, learning through failures as well as successes.
India is such a vast and diverse country that opportunities are only waiting to be dug out. Recent success of e-commerce companies is just one example. In transportation, education, health, cashless phone banking, money transaction, gaming, entertainment or any other you name. You find a pain point and you have a business opportunity. And in most cases the barrier to start is low, so anyone can have a try and can look for gold. Problems do arise in the second stage, where you have yet not proven yourself, and need more cash to grow. This is where the Government can create an encouraging environment and in fact can become a catalyst and an accelerator to draw more private money with greater force. If you cross this stage then there is no looking back. But please remember – to turn a disruptive idea into a disruptive business model, you will need knowledge and mentoring.
Just look at what a small country Finland with a population of just 5.5 million, equal to the size of Pune, has achieved. We all know Nokia and games like Angry Birds or Clash of Clans. There are nearly 200 studios dedicated to gaming alone and where failure is seen as an essential step to success. Imagine what can be achieved in India! With nearly a billion cell phone users and nearly 300 million internet users, that are likely to grow rapidly to over 500 million, i.e., the same size as Europe, in three years’ time, you are blessed to be in the right place at the right time. Some of you will make a career in consultancy, finance, IT and other sectors. However, I would urge you strongly to participate actively in MAKE IN INDIA and to help blossom an entrepreneurial spirit in the country. But, whatever you choose to do, you must be steadfast on two things. One is ethics and integrity – financial or intellectual, or in personal conduct. You should always remember that passing out from this Institute puts on your shoulders a responsibility to be a true leader, not only to lead by example, but to ensure that others follow the strict standards of morality and integrity. Second is your concern for the disadvantaged in the society. We need to give them opportunities and means to better their quality of life. You need to take an active lead and have an inner motivation to make a change, however small, in the lives of poor and disadvantaged.
With these thoughts, I, on my behalf and that of the entire Board of Governors, now commend you to the award of MBA from IIM Rohtak and wish each of you a brilliant success in whatever you choose to do. I would like to call upon you to be connected to this Institute and, whenever possible, contribute to making it a world renowned business school.
At the end, I would like to thank the minister and officials of the Ministry of HRD, Government of India, for their enthusiastic support, the members of the board for their guidance and encouragement, the Director, the faculty and the staff for their contribution in the progress of this Institute, the parents for encouraging and supporting their daughters and sons in realising their dreams and aspirations, and, finally, the students for being the vital source of energy for the Institute.
Thank You All.