Speaking about India's experience with high growth during the pre-2008 crisis years, Dr.Gokarn highlighted the various international and local factors that contributed to it. While strong global growth and the benign energy prices were among the international factors, he listed low inflation and the resulting lower interest rates; declining fiscal deficit; shift in government spending from consumption to capital investment and the benign balance of payments as among the domestic factors. While post crisis, all of these factors have turned adverse, Dr.Gokarn felt that, with some decisive steps, the domestic factors can be reversed again. "It is not undo-able, but some aggressive measures are required," he added.

Dr.Gokarn pointed out that the surge in productivity, thanks to dramatic rise in the telecom penetration in the country, has now petered out and that we are awaiting the next "technology shock" (to boost productivity again). Dr.Gokarn highlighted Food as another area where technology advances and entrepreneurial efforts could contribute significantly. "There is a complete stagnation of productivity in proteins and vegetables and the supply response has been negligible. This has been a key hindrance to containing inflation," he said.

Back To Top

Mr.Chauhan provided a witty account of his experiences as an entrepreneur including in founding two startup ventures: ExchangeNext (under which he launched multiple exchanges for trading petrochemicals, steel, paper, etc) with financing from the Reliance Group and a venture that created back office systems for brokerages (which was acquired by BSE which then asked him to join the exchange).

Describing how PE/VC investors were like the mythological character Abhimanyu - who knew "how to enter, but not to exit" - he suggested that they could, at time of their investment into an SME company, insist the company list on the BSE's SME Stock Exchange. "Then, you can create an exit (route) at the time of the entry itself," Mr.Chauhan said. The added benefit is that the various governance related provisions that investors desire - from declaration of financial results, etc - is ensured by the exchange and enforced by SEBI and other regulatory agencies. "Protection of minority rights - i.e., ensuring corporate democracy - is the primary job of the exchange. If the majority owner takes away most of the profits and shares only the losses with the minority, then the faith in the public markets will collapse,”  Mr.Chauhan added.

Back To Top.