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Nandan Nilekani says one of the reasons digital giants do so well is that they use data exhaustively to sense changes in the market.
Nandan Nilekani says one of the reasons digital giants do so well is that they use data exhaustively to sense changes in the market.

In a post-covid world, the past is no indication of what’s in the future: Nandan Nilekani

  • Mint talks to a cross-section of leaders on the challenges ahead and the ways to tackle the virus-induced crisis
  • In the first of the series, Nandan Nilekani charts the way ahead

The covid-19 pandemic is turning out to be a pivotal moment in how countries, companies and people are responding to the crisis. It is leaving the best overwhelmed.

As part of a new series, Mint is tapping global thinkers for insights. The inaugural interview features Nandan Nilekani, co-founder and non-executive chairman of the board of Infosys Ltd. Nilekani previously served as chairman of the Unique Identification Authority of India (UIDAI) and authored the groundbreaking book Reimagining India. Nilekani dwelt on the challenges and, in typical style, laid out the emerging ecosystem as well as the opportunities in a post-covid world. Edited excerpts:

We want to take you back to an idea you recently discussed: internal globalization. Do you think this is a moment when India should take a deep dive into it?

I completely feel what we call internal globalization is the need of the hour. If you look at external globalization, there was a great run for about 20 years. If you take 1991, not only was it the year of India’s big economic reforms, but it was also the time the Berlin Wall fell and in some sense launched an era of globalization. It was further enhanced by the rise of the internet, containerization, which made it easy to move things around the world and, of course, China joining WTO (World Trade Organization) in 2000. The World Is Flat was written in 2004, which in some sense represented the zeitgeist of that period. But today I think there is a lot of pushback against globalization, particularly by some of the big advanced countries and their populations.

Where we should focus our effort is on making the Indian internal economy, which is continental in scale, completely free—easy to move money, easy to relocate. So definitely we need to get the scale benefits of India’s size and population through internal globalization.

Your first big theme was the world is flat. In the past two decades, we have seen the end of globalization as we knew it. Now you are arguing for internal globalization?

Yes. In the ‘world is flat era’, Boston and Bangalore were flattened but not Bangalore and Bidadi as internal India was not equally accessible. But given that India’s growth will have to come more from domestic economic activity, reducing friction internally between states is the need of the hour, and we maybe halfway on that journey.

Has the gap between Bangalore and Bidadi reduced significantly since the ‘world is flat’ idea? And if it has, are we saying India is ready for the idea of internal globalization?

Bidadi today has a Toyota factory and a golf course, so I am not sure if it is the right example I should be using. But I think it is inevitable. We are going to see the migration from North to South and East to West... If you want to get enough economic growth equitably, then you have to make the Indian economy more efficient and more interoperable internally. I think some of the decisions this government has taken now on the whole APMC (agricultural produce market committee) is an example of trying to create a national market for agriculture.

GST (goods and services tax) is an example of creating a national market for goods and services. So I think it is inevitable, it is necessary; we have to find the right balance between the Centre and the states so that both parties have a stake in the game.

There is a surge in the use of tech in the wake of covid-19. Do you think this has given a fresh lease to the idea of using tech to do social good?

Absolutely. The pandemic has brought home the benefits of technology. One, of course, is applications such as Arogya Sethu for contact tracing; the fact that today the Supreme Court is conducting hearings on videoconference is something you would not have imagined before the pandemic.

And then the fact that the world’s largest cash-transfer programme has been so easy because of Aadhaar-DBT(direct benefit transfer)—there were 400 million Aadhaar-enabled transactions in May and June... This will be the turning point in the (deployment of) useful technologies for social development.

So it looks like the enabling environment we have today is most conducive to nurture an open digital ecosystem like UPI (unified payments interface).

Actually, there are many things in play at the ground level. I will focus on both the digital and internal globalization together. Fundamentally, how do we create a national economy where goods, services, people and capital move freely? We do have free movement of people, and that is shown in the migration that has happened.

Our migration is going to go up because the fertility rate of southern and western states is below replacement level, whereas the TFR (total fertility rate) of some of the northern and north-eastern states like Assam is above fertility level. As a result, the bulk of young people over the next decade will be coming from these four to eight states. There is going to be internal migration from these states to the western coastal states or the southern states...

When people move around like that, you have to make sure that every service should be instantly accessible wherever they are. Today, my Aadhaar number is a nationally usable number; bank account, too, is nationally usable; so is my mobile number. This should be applied for other things, too.

If I am eligible for something from the PDS (public distribution system), I should be able to get it anywhere in the country. If I want an education in my mother tongue, I should get that anywhere in the country. We have to really re-imagine some of these things so that people have access everywhere. All this can only be enabled through technology.

What is the kind of architecture that a new India can look at?

Every service provided by the government should be digitally enabled so that it is accessible over a wire or a phone anywhere... For example, in the case of PDS, if I have national portability, a migrant in Delhi and his wife staying in a village in Bihar should be able to withdraw their PDS entitlement and each can take a part of it.

We also have to think of two models, what I call assisted service and self-service. Western society tends to have self-service because everybody is educated, rich and has a smartphone. In a country like India where many people may not have full literacy and may not have access to devices, you need both.

This requires an information highway, the building blocks of which have been in the making for the last 10 years. Given this free exchange of information, the privacy of data must be ensured. We have come a long way forward in the privacy space. In 2010, I had written to the prime minister that we should have a privacy law. A lot has happened since then. One is, of course, the landmark judgement of the Supreme Court that Indians do have a fundamental right to privacy. At the same time, the SC came out with a brilliant judgement that said there are some situations where some of the rights can be circumscribed; they also said any circumscription of privacy should be proportional, reasonable and be supported by law.

You said 50% of India has arrived there. What is the other 50% that needs to be done?

I mean 50% of the digital infrastructure is in place. What is in place is national identity, national payments and banking, and national mobile phones. The PDS system needs to be nationally mobile. GST has given us the foundation for the national indirect tax system, which of course needs to be further simplified, but fundamentally, the thing is there. FASTag has made it possible to drive a truck from Delhi to Kanyakumari without having to stop for paying toll... We need to have a way for voters to be able to move their vote when they migrate. I think healthcare is another important thing which, hopefully, the current crisis will accelerate... Then there is education. It is compounded by the fact that we are going to have many multilingual states in future because of migration.

How do we anticipate and respond to challenges like the pandemic?

You are asking me to talk about “unknown unknowns". I am a great proponent of using digital methods to leapfrog. At the same time, I recognize that if the digital architecture is not open, interoperable and competitive, then you end up creating a new class of intermediaries. For me, (the question is) how do you make these happen in a way we do not replace old overlords with new digital overlords? The second thing is that in excessive dependence on digitization we have to make sure people have the capacity to deal with it. Inequality is exacerbated in a digital world.

There is a point Yuval Noah Harari makes about technology and cooperation. Do you think that in the present situation we have overestimated technology and underestimated cooperation?

I agree with you... As technology becomes more and more mainstream and part of the fibre of your life, then obviously it will become subservient to politics, ideology, security and privacy concerns... That is going to be the future.

You said this before about how Infosys set a very audacious goal of $1 billion when it was around $100 million. How would you recalibrate that goal if you had a similar challenge today?

I think the pandemic is a gigantic stress test on the world. Companies, in particular, are being stressed and clearly, it is starting to distinguish those who have resilient and successful business models from those who do not... Audacious goals are not just about size but also about how you make sure you are more resilient and are more agile and quick to respond to crisis and opportunities... I think the biggest learning from all this is that if you want to be in charge of your destiny, generate your own money... All the great companies became great because they were profitable and generated large amounts of cash... How do you re-imagine what you do to be financially sustainable, resilient, agile and responding to opportunities and threats, de-layering and de-bureaucratizing your firm and making yourself sentient where the nerve tips of your organization are able to immediately sense the change of the environment? These are all some of the things to be done for new audacious goals that companies have to set for themselves.

Data has become absolutely historical. You need fresh sets of data to, as you have put it and people are saying, to re-imagine things. Isn’t that so?

Yes. Actually, that is why the whole idea of sentience is very important because past data may not indicate the future. So your ability to sense what is happening around you, both from data as well as your own insights, becomes very important. One of the reasons digital giants do so well is that they use data exhaustively to sense changes in the market. Every company will have to do that because things are going to change very quickly and the past is no indication of the future.

If you were asked to set three or five audacious goals for India in the current circumstances, what would they be?

I think one is, how do we achieve full and effective literacy and numeracy universally in the next five years... If we put our minds to it, we can address learning outcomes at scale in every language and every nook and corner... (O)ther countries that have either not done it or have done it at a very high cost; we can do it at low cost. The second is about transforming healthcare and making sure everyone has access to it at the lowest possible cost. The third is transforming the delivery of justice, equitably, quickly and cheaply... The fourth is creating a social welfare net that is accessible by everyone at the right time, place and quantum. Finally, how do we make data work for people? The Western model makes it work for large firms and governments. How do we ensure data empowerment? India can be completely data empowered in five years. These five things are not only audacious, they are doable, plausible, transformational and essential.

Gireesh Chandra Prasad contributed to the story.

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