The new director general of FICCI Rajiv Kumar tells Forbes India the key lessons he learnt from his last assignment at ICRIER and the importance of nurturing research and human resources
Designation: Now Director General, FICCI. Previously, Director, Indian Council for Research on International Economic Relations (ICRIER)
Career: Member of the G-20 Advisory Group, Ministry of Finance; Director of ICRIER from 2006-10; Chief Economist of Confederation of Indian Industries (CII) from 2004-06.
Education: D.Phil. in Economics from Oxford University; Ph.D. from Lucknow University
Hobbies: Practicing “Sahej” yoga
How was your experience at ICRIER?
I was at ICRIER for four-and-a-half years and my stint there gave me a great satisfaction. The greatest being that by the time I left it was a place humming with not just activity but with energy and ideas of young people. So, my greatest satisfaction came from moving away from a model which sort of said that, and, of necessity, that you get some stars, get some established people and then get them to represent ICRIER or intervene in policy because that’s the think tank model. But that had a problem: Either you were stuck with people who were quite senior, in the sense that they were getting old and so only had their innings to look back on… not necessarily brimming with new ideas, or those brimming with ideas were generally abroad and whom we could generally not afford.
So, out of necessity, what happened was that I got hold of a lot of young people who would have typically done their MAs from Delhi School of Economics or M.Phils from Warwick or LSE [London School of Economics]. They were all in the 24 to 28 age bracket and got motivated about reading and writing and working for policy. This suddenly transformed the place because, with a little bit of guidance from me and some of the senior colleagues, they started churning out a lot of material that, although not path-breaking, was enough for the policy maker to take cognizance of. For example, the report on retail was primarily done by two people, both M.Phils, led by a senior person. Now you hear the retail report being quoted extensively in the white paper introduced by the Department of Industrial Policy and Promotion.
By the time I left, we had research staff of close to 50 people, of which 18 were Ph.Ds. There too I was lucky to get hold of relatively younger people, on deputation from JNU, IMI and IMF who gave ICRIER its dynamism.
Did you have any plan in mind about ICRIER when you started your stint there?
Basically, I had three things in mind when I joined ICRIER. One, I was convinced and am convinced that you need think tanks in the country, separate from research departments of universities, how ever good they might be. I am a believer in the US model rather than the European or Japanese models.
Think tanks are intermediaries between the academic world and the policy world and also a co-ordinator of opinion makers such as journalists, academics, industry representatives and policy makers.
Two: The conviction that it’s all about human resources. That if I have to do anything at all then it is to attract good human resources.
Three: I am not in the business of producing frontline ideas but I am in the business of doing rigorous research that is policy oriented. Herein lies a very important distinction.
Quite often people who are into research think it is not their concern if it is relevant for policy or not. Those who are into influencing policy think that rigorous is waste of time. In the sense that you already know whatever you had to know. So, “the knowledge is there, it is just a matter of packaging it”. I don’t believe in that. I feel good policy comes out of good research. Like the two-year project we did for the MEA [Ministry of External Affairs] on how to define national interest and how to reconcile foreign policy with it. We had 26 papers written on it. From there come these three charts that are there in the book [the ICRIER report on India’s National Interest] that, I think for the first time, conceptually clarified the idea of national interest in terms of security, economic prosperity and global public goods. Then we broke them up after our discussions with all the experts. And then, you get a very focussed and detailed idea of national interest.
It had greatly helped that chairperson Dr Isher Judge Ahluwalia insisted I write a medium term strategy for ICRIER almost at the beginning of my term. It took me two years because the first was spent fire fighting, getting things together and getting ICRIER off the ground.
The medium term strategy helped a lot since we had to define our vision and scope, be clear on our mandate and I think that medium term strategy is still valid. And we changed some of the things around in ICRIER. For example, we added a new thrust area ‘environment’. We activated an area that had never been worked up on — the strategic aspects of international relations.
So, long story short, yes, I had some ideas but these evolved while I learnt on the job.
Five years ago, think tanks were not perhaps covered as extensively as they are today. What do you have to say about the space of think tanks in India?
We are going through very tough times and that is simply because — and this is ironical and paradoxical — there is shortage of human resources. We simply don’t have that. And one of the battles that I have not been completely successful in fighting is the remuneration that you are going to pay our human resources and the quasi-academic world.
Now the Sixth Pay Commission has done a very good job, but my own view on the matter is that we need to go much further. We are pretty much scraping the bottom of the barrel as far as human resources are concerned. We are competing in the same pool as the industry, the media, banking and other sectors. They all are attracting the same talent, and are all willing to pay more than think tanks. Plus, all these other sectors are very willing to take really raw hands and train them on the job. We, in the think tank world, actually need a mix of the two. We need some guys who are well trained and who can then mentor others. I needed eight professors who were up to scratch in techniques, concepts, experience and writing and then they could build the team. But I was never able to fill all the slots.
Is it a brand issue?
No, it’s not a brand issue. A lot of people contacted me from abroad. That pool really exists abroad in assistant professors and post doctorates. But there is an impression we have in this country that [for those] coming to India, we can discount what they are earning, while I am convinced that we have to pay a premium for them to come here. Because the impression that most of my elders have is that since these people [Indian experts working abroad] have come back home, you can discount what he is earning and give him half of what he is earning there and so on. I disagree because then you are restricted to only those who are coming back for reasons other than [working with] you.
You need to attract them with a career. This is what the corporate world is doing today. They are able to attract young people from abroad as a career choice.
But for this you must at least pay the PPP [purchasing power parity] equivalent of the nominal salary that the guy was earning abroad. You have to give him two-thirds or three-fourths of what he is getting there. Let’s say the PPP is Rs. 10 to a dollar. That means you give him one-fourth but then you have to pay a premium because he is, after all, losing all his lifestyle, environment and his housing would not be as good as in Pennsylvania or Ohio.
That acceptance is still not there. As a result, it is a great thing to look around all the universities and IITs and IIMs and see what quality of staff we have and how it compares with the best abroad and how many vacancies are there [in Indian institutions].
This is the supply side. The demand side is rising — both internally and externally in the sense that the government needs more and more inputs because it is getting into complex areas. The corporates need more: They all want to be told what’s the global scenario. And there is an external world that is now more and more interested in India. So there is a mismatch.
Is there a lack of leadership, in the sense that there aren’t enough think tanks?
There are lots of them but there are not enough organised ones. There are lots of one-man shops. That’s the other aspect of our India story, which is that we, as a race, find it impossible to work together. Each one of us [thinks he] knows the Brahmand [the universe] and therefore we have our own theory. So, “I know the answer to India’s problems. So why the hell should I listen to you?” It’s shocking that there is no Indian school of thought in any discipline, even 60 years after independence.
We are just unable to create team spirit and a feeling of loyalty. The only person who has been successful, I think, is Rajendra Pachauri of TERI. He is amazingly successful and the secret might well be that he is the only one amongst us who has stayed on with what he founded. And it goes to the credit of the Tatas who gave him that kind of space and freedom to the extent that you could change the name from the Tata Energy & Research Institute to The Energy & Research Institute. And the Tatas did not mind. That I think is the other issue.
Leadership is required at two levels. One, at the level of the executive officer, somebody like me, Pachauri and Suman [Bery of National Council for Applied Economic Research]. And then, leadership of the founders and board members — how far-sighted, liberal they are.
What were the key lessons from your stint at ICRIER?
One: The importance of human resource. Two: The importance of mentors. Three: The importance of team building. Something that we don’t devote enough time to in our country is a professional approach to human resource management. In other places, you take active steps to make a team gel and then you begin taking pride in the organisation that you work on. I think that’s what is really needed.
What do you think FICCI requires now?
All the above three.
Are they lacking right now?
No, I can’t say that but they can do more of this. Let me say here, with all honesty, that what Amit [Mitra] has done in the last 15 years is amazing. While I was just talking about turning ICRIER from a Rs. 2 crore to a Rs. 10 crore organisation, he has taken FICCI from a Rs. 3 crore firm [in 1994] to a Rs. 100 crore organisation.
He has got a wonderful team of youngsters. He is the only mentor.
Now, I hope there can be six like us in FICCI and once there are, I believe FICCI will be the unbeatable think tank and industry organisation that has to do three jobs: First is networking, the second is advocacy and the third is think tank, where it can produce substantial output on behalf of the industry and for the government.
Do you look at CII and FICCI as competitors?
You know, I am one of the few people who have worked in both the places and that too at a senior level and not so long ago either. I have a lot of friends in CII at all levels. I look at them as competitors but not rivals. I think there is a difference. Competitors are good but rivalry can be destructive. It can generate a lot of negative energy and take away a lot of time. I am looking forward to constructive engagement with CII because there are a lot of issues where, if the industry was together, it would do the country a lot of good. For example, the delivery of public goods and services, law and order, water, public education, urban amenities and so on.
If the industry organisations come together and give up on the idea that they will develop despite the government, which is what I have heard so far, and, instead, hold the government accountable at all levels to deliver what they should, I can imagine, the change that will happen in this country.
For example, agricultural modernisation: If the industry got together to modernise agriculture, improve the logistics and put up a plan where the industry would bring all their resources and experience together, I am sure we can benefit.
Or the Mining Act, which I happened to see just recently in some detail. You cannot have no mining in this country. At the same time, you can only ignore the issues concerning the welfare of the tribal people at your own cost. But there must be a balanced way to achieve both. The way the bill is drafted, I don’t see it being done like that.
There is a whole range of issues like this in which, if the industry was speaking in one voice, we could achieve a lot more.
Should we expect a huge push in the think tank role of FICCI, now that you are involved?
I could say there would be further development because I think Dr. Mitra has already done a fair lot. Some of the FICCI studies are right up there. But yes, that’s my comparative advantage.