The winds of change are blowing across India’s wide fertile plains. Two global consultancy giants are in agreement about India’s potential and both express cautious optimism about the newly elected Indian Government to sow and foster the changes needed to grow a prosperous future for the Indian people.
Last week Consultancy.uk reported on McKinsey & Company CEO Dominic Barton expressing optimism in India’s future, “I think India has gone right back up, people are interested, obviously people are going to want to see action but I think the feeling is they will because this government seems serious," he said, on the back of a detailed report assessing the potential of the Indian economy. A few days later, the CEO of The Boston Consulting Group, Rich Lesser, has joined in voice, adding to a chorus of optimism in India’s future, "The sense of hope and opportunity is just so much higher. It is a very exciting time."
Both business leaders, heading up two of the most influential consultancy firms globally, are responding to Indian Prime Minister Narendra Modi’s statement reflecting his intention to initiate broad government reform programs. In light of the programs, both advisors conclude that India is on the right track toward creating the conditions positive in outlook for the countries long term growth prospect, as well as the prosperity of its 1.2 billion people. "Global leaders are looking at India with a high degree of optimism, but tempered by the realisation about how hard it is to make change anywhere in the world," says Lesser.
To bring about the internal changes required to turnaround India from recent lacklustre growth, to a global powerhouse stabilising the world economy, firm and active transformation of the government machinery will be required. As it stands, it represents a transformation Modi appears ready to make, saying in his Independence Day speech at Red Fort: “Today in the face of global competition, when we have to realise the dreams of millions of Indians, the country cannot run on the lines of "it happens", "it goes". In order to fulfill the aspirations of masses, we have to sharpen the tool called the government machinery, we have to make it keen, more dynamic, and it is in this direction that we are working.” While Modi is strong in his intention, Lesser is cautiously optimistic: "Of course actions speak louder than words and we will see how things evolve but there should be a great deal of optimism and very close looking at investment opportunities and opportunities to build businesses here in the years ahead,"
McKinsey and BCG both note the potential, and the changes, that need to be made to transform India. Particularly by focusing on areas of energy policy, infrastructure, regulatory constraints, tax regime education and upskilling the work force, India’s potential can be unleashed. Lesser notes however that tax uncertainty is creating risk and discourages people from investing.
Developing India’s manufacturing is a key area about which Modi talked in his Independence Day speech, announcing his ‘Make in India’ initiative, whose aim is to foster and grow the sector in India. McKinsey’s research on India reveals that looking back, the lacklustre growth in recent years can largely be explained by deceleration in the industrial sector.
Going forward, Modi envisages a “zero defects, zero effect” programme, the aim of which is to reduce the number of defects in products manufactured in India, while also reducing the level of pollution created by the manufacturing process. Something Lesser echoes, "you have got tens of millions workers coming into job market. You have got to have opportunity for them, and services will be a big chunk. I'm not minimising that India can be a great part of the services economy, but there has to be a strong manufacturing base,"
With two of the world’s most influential consultancy service rivals optimistic, the future looks bright for India. Both firms recommending their clients look to India for growth opportunities.