Gaurav Taneja, National Director of Ernst & Young’s India Tax Practice, delivered the Valedictory Address at the Concluding Day celebration of Prime Academy’s 24th session held on 31st March 2007. He talks about the global scene, the Indian scene, the two generations of economic reforms and finally what all this has for you as chartered accountants. A must read
It is a great pleasure for me to be here this evening at the Prime Academy’s Valedictory Day function. Today I am going to address you all on three issues. One, on what is happening at the global level; two, on what’s going on in India and three on what all this means to you when you become chartered accountants.
The world has never seen anything as dramatic and as fast as “change today.” The changes that have happened in the last 100 years are equal to the changes that occurred in the last 2000 years. Electricity was discovered not so long ago and from then on literally everything on earth has changed.
The global scene: Look at how Russia opened up from being a communist economy and has transformed itself dramatically. Look at how Germany, destroyed at the end of World War II through vision and hard work re-emerged as a strong nation. From the production of cars and pharmaceuticals to playing football Germany has come a long way. But today, the people there have a tremendous sense of pessimism. Their economy is growing at only about 2 %. There are more elderly people than young people and because of regulations and certain other factors the scope for growth for the young has been limited. Look at how the US is changing and because of the environment of continuous change and acceptance of change, the US has been the leading country for a long time. This is because they have the culture for rebuilding themselves and striving for more. But now even they are concerned because for every two jobs created in Infosys, TCS or Wipro, one job is possibly lost in the US. They are now branching out more into research and technology, the creation of more IPR’s and brands, in short, further moving up the value chain to maintain their lead as the number one economy in the world. Finally look at Cambodia and Vietnam. 20 years of war has killed people over there. But now even they are growing. Companies like Intel, Nike are setting up manufacturing plants in these countries providing that country with tremendous opportunities. This shows that during dark times, will power and optimism helps people come up. The one major dark spot on earth today is Africa, which is full of killing and brutality. But in general, the earth is a much better place for people to live. What we see today is better than what prevailed a hundred years ago.
The Indian Picture: India’s GDP is growing at 9% net of inflation. About 2 to 3 % is contributed by agriculture. Services and industry are growing in double digits. This has not happened overnight and has not been done without effort. Back in 1991, our foreign exchange reserve was almost nothing. The government of India had to mortgage its gold reserves. But a lot of opportunities was created out of this situation when Dr. Manmohan Singh (then Finance Minister) and Mr. Narasimha Rao (then Prime Minister) used it to pave the way for the first generation of reforms. The pace of reforms was initially slow, and we have been able to reap its benefits over the past the years. And now India is moving on to overseas buying. Take the Tata-Corus deal. An Indian company acquiring a global major is a paradigm shift. Over the past 12 months about 140 transactions of Indians buying overseas have taken place. India is the second largest investor in the UK. Liberalization and reforms have been there, but it is people with aspiration, self-confidence, vision and the ability to execute, have contributed to the success. Reforms have been contextual, but the aspiration, vision, and confidence of Indians are the key to the success of India.
Infrastructure: A study shows that we could increase our GDP by at least 2 % if only we had better infrastructure like roads, ports, power plants, water, sanitation, etc. The most important thing today for India to go forward is its infrastructure. As you progress in your careers, keep an eye on that. When it comes to local counselors and state government, vote for people who make that infrastructure happen. Each of you can make a difference.
Education: The second most important area is education. Our primary school, secondary school, and higher education are suffering badly. I, therefore, congratulate institutions like the Prime Academy which go out and train so many of you people which increase your chances of becoming successful chartered accountants. They are playing an imperative role in the private sector. Unfortunately, the government has not done enough for education. And therefore whatever little we can do for educating our colleagues and peers especially in the rural sector will help India grow fast. When the IT sector took off, the difference in a US salary and Indian salary was about 1:15, so the labor arbitrage was fantastic. This has now shrunk to 1:6 which proves that salaries in India are growing rapidly. While it means a lot to you and me as our salaries go up, we must remember that we have a billion people, and we must ask ourselves whether all the billion are employable in the role and in the capacity they should be? The answer is “No.” There is a need to set up educational institutions both in the private and the public sector, and Prime Academy is an excellent example reaching out to people all over India.
Inclusive growth: When the UPA government came in, they came in with a theme of inclusive growth. People wanted to know what that was. Unless there is real growth in the rural economy, India cannot grow that fast. So when the reforms took place, the idea was that there would be a trickle-down effect. That industries will come, and services will also come in slowly and trickle down to all parts of our society. But 15 years have shown that that has not happened. It has shown that not only a pull factor from the top but also a push factor from the bottom is very vital. And therefore I fully support inclusive growth, my organization fully supports inclusive growth, and you have to do more and more for the rural sector. Now many governments have come and gone, but they haven’t done much for rural reforms. If we get these thing rights, namely labor reforms, if we get the supply chain in the rural sector going then we can grow the rural economy from 2 to 4%. And that growth from 2 to 4% will take India’s GDP to 11 and even to 12%. It is vital as 60 to 65 % of our population stay in the rural sector. If we can unleash this potential imagine how much can be achieved. Inclusive growth is required otherwise the difference between the haves and have not will become so immense that it will create a social disorder in our country.
What it has for you as CA
Let me move on from what’s happening around the globe and what’s happening in India to what it means for people like you and me. What are the lessons that I have leaned from working for the past 20 years? What is it that my colleagues and I look for from people who join our firm as Interns or as chartered accountants?
- Have Integrity: There is no question in my mind that the most important thing is integrity. It is a fundamental value. It is the ability to say no when you see something wrong and not getting tempted by temporary benefits. It comes from your core. Without integrity, you will inevitably slip, whether it is your business or whether you are working in a company or a partnership firm.
- Work Hard. CA is the first real test of hard work. It is not easy to become a chartered accountant and if YOU think becoming a chartered accountant is hard work, its only a start. Hard work is critical. No one has succeeded for a long time successively without putting in hard work. You may be very talented, you may have a lot of luck and may succeed temporarily because of your past karma, but consistent hard work is required to be successful. Success is 99 % handwork and 1 % luck.
- Respect Others’ views: As you work in an organization learn to respect other people’s views. You may not agree with what the other person says; it may not be the right view, but if you want to grow, you must hear people and their views. Otherwise, people may not respect you. However senior you may be people will work for you only because you have ordered them to do so and not because they wish to work with you. Remember you are only as strong as the weakest link in your chain. So respect for people around you, both seniors and juniors are vital. You will start your careers shortly. You will be at the bottom of the pyramid tomorrow but the day after you will become leaders. You will have to make sure that you adjust well with people and that you get the best out of people. Even if one person is left behind in a team, you will not be successful.
- Have enthusiasm: Your career is not a sprint but a marathon. You will need energy for the next 40 years of your life. Not all days will be good and sunny. If your energy and enthusiasm levels are safe, and it is cloudy, everything will turn out okay, and that is the true spirit of a successful human being. And for that, you need the courage of a warrior. Courage to say, “No matter what, I will find the solution.” It is very easy to say that the circumstances were unfortunate and hence you couldn’t succeed, but it is your enthusiasm, energy, and courage that will make you successful. Courage comes from within. People can only motivate you only up to a point. They can lull you with high money, share their experience and inspire you a shade. But it is only you who have to motivate yourself.
Winning is not somebody else losing, it is your energy, integrity, hard work and courage that will make you successful. Courage is the most important. Courage to say no when something is wrong and the courage to stand up to the right thing. These are your core values that you imbibed from your parents, teachers, and relative when you were small. As you grow, you tend to forget these things. You have to find it within yourselves. If you can find it, you will become successful in whatever you do.
- Have a Winning Culture: You must have a winning culture whether as a group, individual or as a team. An excellent example of this is the Australian cricket team.
Winning culture in an organization is the sustainable competitive advantage. Technology is not a sustainable competitive advantage; it can be bought. IPR is not a sustainable competitive advantage; it can be created. But a winning culture can neither be bought nor built overnight. It is truly a sustainable competitive advantage. Think about that when you start your work a couple of years from now. And finally, if you are successful, remember it will come with a lot of sacrifices.
- It is lonely at the top: The road to success is lonely. At the head of the mountain, you are alone, and you have to pay the price with blood. It is painful, but you have to go mentally behind that barrier if you want to win. Michael Schumacher is a superb example of someone who wants to win and is determined to win no matter what the circumstances are. But remember, at the top, there is a place for only one person. You will have certain doubts from time to time, but you will have to overcome them. No one will help you with that. Not your mother, not your father, not your wife not your husband. Those self-doubts have to be overcome by you. It is a lonely place. There is only one Prime Minister of India. There is only one CEO of Infosys Technologies. There is only one Ratan Tata. And Ratan Tata had to take the important decision on the Corus deal all alone, all by him. His advisors may have told him many things, but finally, it was his call. The 12 billion dollar decision, was finally his to take, which if it goes wrong could significantly effect theTata group.
So are you ready to make sacrifices to get successful? Are you willing to pay with blood and sweat? Because this is what is required in the journey to be successful.
- Be a Nice person: But no matter what whether you are successful or not, be a nice person. Because that is how people will finally remember you. And finally, do try to make God a part of your daily life. No matter what you do without God’s grace, it is tough.
Best of luck