Given the lessons of the last five years a lot has been accomplished but so much to be done. What should be the top 2 or 3 projects or agendas or focuses in the next term if Modi gets elected? -So, the next five years the agenda apart from completing all the projects which is started which would be completed next 2 – 3 years because much of it is being ceded and lot of money has been spent should focus on creating the new India. And what is the new India? The new India is one, I would say, where there is justice available to everybody. You know, Rajiv, our biggest problem in society is there is a broken down justice system. We have 18 judges for million population. America has got 100, India needs 50. Cases take 5, 10, 15, 20 years to come to a conclusion. And the ordinary Indian suffer, the poor Indian suffers. We have more than 250 thousand undertrials in prison who have served full sentence or half their sentence and should be released but they don’t have money for bail. We have thousands of cases in the high courts and the supreme court pending for a large number of years. The Ayodhya case has been pending in Supreme Court for a long number of years. Many consequential matters have been pending. They have been pending because the judicial system lacks capacity. So, we need more investment justice system, more courts, more prosecutors, more investigators. Second, the government Itself is a very big litigant and should reduce its litigation. And the third thing which is important for that to happen is that the rule of law must be applied and rule of law may be seen to be applied so the rule of man will diminish. The rule of law rule of man diminishes, we will cease to be a feudal society. We will become an open democratic society where the poorest of poor will be empowered by the right guaranteed to them in the constitution by our founding fathers. Till today the rights are there but the rights could not be enforced. There was always a mercy of the rule of man. There was the mercy of the politician, mercy of the policemen. And when you are poor, the people will oppress you the most are the lower level government officials, the policeman and the lower level political people, and the local gundas through riding roughshod over you. So, I think this is the most important thing. The rule of law should be established. Justice should be delivered early. And if justice is delivered early, all those political leaders who have been charged with rape, with murder, with corruption, they will go to jail. Because in 2 or 3 of them go to jail. We have a politician who was been convicted, who is out on bail, but his appeal is still not heard in the Supreme Court. Should be heard, should be decided and he tried to get bail but Supreme Court has still give him a bail. That is number one. The second thing that is required, Is to enrich human capital. Our education system has to be improved, our school education system should become much better. The poorest of the poor should get high quality education, so, lot more investments, lot more quality standards and enforcement is required. And every young person who wants to go to college should be able to go to college without worrying about the fees without taking debt. So, we must revamp our education system and make sure we invest in human capital in larger amount of skill development so that people have the ability to earn much more because the true test of the society is the quality of the human capital and that the focus should be there. But third thing which is very important to be done in the next 5 years is to revamp the economic ecosystem of this country. For far too long Rajiv, we have incentivised capital as against labour. We are a labor surplus country in a capital deficit country. Like China did when China opened up, it sorted the SEZs in their coastal areas, It invited capital to come to take advantage in surplus labour, they built labour intensive industries to dominate the world to mass production. And they made sure the surplus from that went into creating infrastructure, went into creating capital intensive industries around the nation. What we have done is we are incentivising capital so there is more automation, there are more capital incentives and the people who are cronies, who can go robbing bank and take loan and not pay back, they become the billionaires. And our labor intensive industries are suffering like garment, like manufacturing, electronic assembly etc. Just now, I read the data that India imported 46 billion dollars of electronic goods last year which is very very high. And after oil, electronic goods are the largest import that we have because we distort our electronic industry which is built up on assembly, which is built up on creating an ecosystem. So, we have to revamp, correct it and incentivise labour intensive industries so that more and more people get employment and we have to do that in a very significant manner, by changing the terms of trade in terms of labour as against capital. It doesn’t mean you tax capital out of existence. It just means you reduce the incentives for capital and increase the incentives for labour. This government has done something but more needs to be done. And I think the next thing that needs to be done is urbanization. Rajiv, according to the government we are 34% urban, the world is about 52% urban, China is 59% urban. Between the big cities like in Mumbai, in Bangalore and in Delhi and the village which we have 600, 625 thousand, there are 5000 small towns of 50,000 – 100,000 people. Government must invest in them to make sure more and more people come there because urbanization is aggregation of human activity. Aggregation of human activity creates specialization. Specialization increases productivity. Increased productivity leads to increased income for the wage earner. And then government can deliver good schools, good quality of the life, protection of the life, liberty and property of the citizen. And they can feel much better, they can live in the rural areas travel 10 kilometres come to a small town and these small towns can become manufacturing hubs linked with a good road network. So, I think we must invest in the smaller towns so the smaller towns aggregate people and the quality of life can improve. So, we need a new economic model based upon productivity, based upon efficiency, based upon lower cost, based upon human capital and based upon, you know, using our labour to our people’s strength to create greater amount of jobs and a better quality of life. I think this should be the economic agenda but top of the list in my mind is justice. Because without justice no society can prosper. The society has to be democratic, there has to be rule of law. You know that in the US where you live, Rajiv, where Supreme Court judge went to break the law, the policeman will go after him and give him a ticket. He is not bothered whether he is a Supreme Court judge. Doesn’t matter who you are, you are the same under the law except the President who has the immunity. -Now, this is brilliant. I mean, you summarized I think extremely well and I wish the Modi government would take advantage of smart people like you in the next administration. Now, among your priorities, I agree with all of them, but there is three of them, the development of human resource, the three of them they are interrelated. The development of human resource, labur intensive and urbanization. Now, there is a relationship among these. -Yes. -So, how you develop the human resource will determine what kind of labour intensive versus capital intensive industries and opportunities come. So, to have labour incentive, you need educated labor, smart labor. You know! So, the HRD I would say has failed because in the last five years you can’t, HRD can’t say from here we have gone there to that level. They can’t really do that because it’s like more of the same and you are absolutely right that we have become, we are become more capital incentive chasing FDI and all that which is needed in some sectors. But we have totally neglected the labour and so, the unemployment situation is there. Now, tell me, is there a trade off or a contradiction or tension between urbanization and labour intensive. because urbanization requires capital. -Urbanization requires capital, I agree with you But a different kind of capital as compared to industry. For example, should we incentivise a large refinery that is being setup which is fully automated as against a garment industry which can create 2 million jobs? So, we need a refinery. But we don’t have to give them too many incentives. We can make sure that the taxation burden is reduced everywhere and capital allowances are reduced. So, if capital allowances are reduced the service industry which is light in capital, heavy in employment and heavy in jobs can pay lesser capital and plough back the money and make sure that they grow. So, I think we have to reconfigure and the urbanization has to come through public investment. Modi has got a huge program for low cost housing. I think it’s fantastic because the moment a civilian has a house over the head and they own the house, the attitude of the society changes. That’s what a Deepak Parikh wrote many years ago how societies change because of housing. You can see it in Singapore, you can see it in other places where a great majority have houses because they have a stake in society. And they feel that the society belongs to them. So, I think there is no requirement change of model. We can have a large program to create infrastructure. What is the infrastructure? In these cities you must create roads, you must have street lighting, must have water supply and you must have sewage. And we must create areas with factories to come with public transport. And it’s not difficult Rajiv. And there is no contradiction. Government of India has got enough money for all this. It’s not that we lack money. There is enough money in the market and money in the country. The key is the focus. There is a focus is there, we can have urbanization and with urbanization what happens, more people come together in a particular area. I mean they come together in a particular area, labour intensive industry which are needed today like electronic assembly where we are importing a lot, garments where we have a great opportunity because China is becoming expensive. They are not able to supply the world, they have moved to Vietnam. You can as well come to India and we have surplus labour in Bihar, in Uttar Pradesh, in Madhya Pradesh, in Rajasthan other areas in middle of India investment and not the south. The south doesn’t have surplus labour. And you must do this. And let me give some more piece of data, Rajiv. India’s fertility rate today is 2.1. Now for a emerging market like India, replacement is 2.3 not 2.1. replacement is 2.1 for developed countries because infant mortality is low. Female, maternal mortality is low So, at 2.1, India is below the replacement rate for emerging countries. Second, the whole as a south has a fertility rate of 1.8. They are much below. The fertility rate is above replacement in Bihar, in UP, Madhya Pradesh, Rajasthan, Rajasthan etc. Not in West Bengal, not in Punjab. So, in the middle of the country where larger number of young people are coming and if you look at the population pyramid, you will be very surprised Rajiv, in the age group 0 – 4 and 5 – 8 There are lesser children than in the age group 8 – 12 and 12- 16. The new data says so. I am writing an article on this. So, we are coming to a stage where lesser children are being born and in the future the number of children going to school is going to come down in some places rather drastically. So, there is demographic change happening all over the country and a very sharp demographic change in south of India, in the east of India in West Bengal, in the west of India in Punjab. And if that happens, we have to have a new economic model. And the economic model has to be built on increased urbanization, better schooling and labor intensive industries in the middle of India where larger number of people are coming up the land. Rajiv, let me give another data. 43% of India depends on the agricultural sector but the 17% of GDP which can grow at 3, 3 ½ %. 57% of India depends upon services and industry it grow 7 – 8%. The income of people of the land is 42,000 rupees per year The income of people on industry is 1.25 lakhs. The income of people in service is 1.65 lakhs. It’s 1:3:4 It will soon become 1:4:7. Because once that happens because in services you can earn more money because it depends on greater skills, that the land can never supply… the disparity between the people on the land and people who are the factories and people who are in services, widens. And this disparity is the source of tension today and all these talk about farm distress, all this talk about rural distress etc comes from the fact that the land cannot support such a large number of people with the income that they aspire. It can support them at very low level of subsistence, but not the income they aspire. Even in rural areas young man and young girl wants to have a cell phone, wants to have a scooter, wants to have the good things of life. Just like an urban youngster because they see it in TV, they are watching movies etc. They are not content to staying in a very suboptimal way in a village like earlier. And when they don’t get it they get frustrated. So, we have to move the people of the land into factories. And the only way to do it is, urbanization in the smaller cities because the smaller cities are the intermediary layer between the land and the farm and the bigger cities. And they have to grow bigger because they near to the land so they can always live off the land, the cost of living would be lower, cost of labor only lower, and it gives a competitive advantage for labor intensive industries that labor is 50 – 60% of the value act. So, I think it works perfectly and it solves the problem in India and it means the bigger chunk of development will come in Uttar Pradesh, will come in Bihar, will come in Rajasthan, will come in Madhya Pradesh where large chunks of population stay. They require more urbanization. And if we look at the level of urbanization there is very low. I think in Bihar level of urbanization is 12 – 13%. In Karnataka it’s 35 – 40%. Tamil Nadu it’s 52%. And Maharashtra is 40%+ So, urbanization, fertility rate, lack of education has a direct correlation with income. -Very good. So, basically, urbanization is for infrastructure and better facilities and quality of life. And it’s not the same, not to be confused with centralization. So, it’s urbanization with -Not… -Decentralization. -Yeah. -It’s a decentralized urbanization. -Decentralized urbanization in the smaller towns. The big towns will -Yes. -grow. But the big towns have become crowded, low quality of life, high pollution. For example, in Delhi, UNICEF report and other report say that the people of Delhi will live 9 years less because they inhale the bad polluted air. -Yes. -When you come to Delhi don’t stay in India, in Delhi too long Rajiv because we want you to live much longer. -Yes, yes. So, there is a positive correlation -Yes. -between what the HRD should do to train the manpower, especially the rural manpower, the village manpower. They have to be trained so that they can live in an urban setting and they can be part of modern economy but the modern… so, modernization should not mean necessarily capital intensive they should be labour intensive modernization. And, you know, the Indian heritage and the Indian traditions can also be compatible with urbanization So, I think this requires very profound strategic thinking and I am very glad that you are doing that. -It’s quite thinking and you must remember Rajiv, India is an artisanal economy. Our people in rural areas have got rich skills. Now, how to make them more productive with the same skills by the little bit of machinery and affirmation. That’s what you must do. Because with those skills they are not able to create the income they want. So, we must make sure they can produce more and that increased production can give them a higher level of income because they are more productive. Because not all of them can create unique goods which have a much higher value. That too can be done with higher degree of skills, But for that to happen the average purchasing power of people should go up. If purchasing power goes up, we become a society. I think the greatest value will be for hand created crafts which India has plenty of people. So, our people have skills but the skills require to be set in the modern setting where they can be made much more productive, so, they can have a greater income and that can happen in the smaller town setting, not in big town setting, which creates stress and other complications. I hope the Modi and his government and his main thinkers are taking note of this kind of visionary strategic thinking fully compatible and grounded in our tradition. Also, 21st century compatible at the cutting edge of technology. Being able to think of on all the different aspects of nation building, rashtra building, and I would really like Modi to win and make you an important part of the future of our country. I would really like to do that. On that note I want to thank you and we will have more such conversations. But this is absolutely amazing. I am sure our viewers will love it. Thank you once more. -Thank you, Rajiv.