We must think out of the box, says Manmohan

Excerpts from Prime Minister Manmohan Singh's inaugural address at the Summit

Ladies and Gentlemen,

When I look back at our efforts to change the direction of economic policy since the early 1990s, I am convinced that our most difficult challenge and, hence, our biggest achievement, was to change people's "mind set".

This is the idea of growth with equity and social justice. The idea that economic liberalisation and modernisation have to be mindful of the needs of the poor and the marginalised.

I am aware that at times some of the views expressed by our alliance partners on the Left may have raised some doubts in your minds. But I am sure you will leave this summit re-assured and convinced that there is today a wide-ranging consensus on the necessity for India to be actively engaged with the world economy.

Our Government has already taken several steps towards this end. I have repeatedly reaffirmed our commitment to the successful functioning of the multilateral trading system and to broadening the agenda of the World Trade Organisation with an increasingly liberal flow of goods, services and labour. We are committed to lowering our tariffs at least to ASEAN levels.

This is a policy priority for us. You are also aware that we are negotiating Free Trade Agreements with Singapore and ASEAN. I have stated my commitment to the idea of creating an Asian Economic Community, an arc of prosperity across Asia, in which there are no barriers to trade and investment flows and to the movement of people.

The time has come for India to make bold and rapid strides. I urge you to think big. At the recent meetings of the Council on Trade and Industry and of the Manufacturing Competitiveness Council, I was heartened to see many of our business leaders share this sense of urgency and of the necessity to think big and think boldly.

The era of incrementalism is over. We cannot afford to just do things better. We must do them differently. The challenge before us - in economic policy, in social policy, in education policy, in foreign policy "� is to "think out of the box". We must think anew, afresh and ahead.

An important step we must take to enable this change of mind set is to innovate and rejuvenate our "knowledge institutions". Our schools and colleges, universities and research laboratories, our think tanks and policy making institutions.

I have decided to create a National Knowledge Commission to strengthen the roots and sinews of our capacity and capability building so that we are better prepared for the challenges of the 21st Century.

This Commission would be a catalyst in setting ambitious knowledge targets and enabling agencies to attain them. The agenda of the National Knowledge Commission will be shaped by a knowledge pentagon with five areas for action, namely: to increase access to knowledge for public benefit; develop new concepts of higher education; rejuvenate Science & Technology institutions; enable application of knowledge by industry to enhance manufacturing competitiveness; encourage intensive use of knowledge-based services by government to empower citizens.

We must make our universities world class and centres of innovation and excellence. Our Science laboratories must be repositioned for creation of knowledge necessary to develop new products and services.

We must orient our industries to create application of new knowledge to increase productivity, gain competitive advantage and improve conditions of people engaged in work. We must improve services provided by government through the use of information technology.

Above all we must become not merely a knowledge producing society but a knowledge-sharing and knowledge-consuming society. Building a knowledge economy and a knowledge society is the only way in which we can meet the challenge of globalisation.

I am convinced that India has to be a more open economy and must derive the benefits of globalisation, even as we equip ourselves to deal with its challenges.

This is a course which we have set and we shall stay this course. I commit our government to an open, caring economy, an economy where the marginalised are empowered so that they become partners in development and share the benefits of growth.

We have been taking firm steps in this direction, systematically and steadily. We have begun the process of rationalising our indirect tax structures with a movement towards a VAT system and a common goods and services tax.

We have opened up international markets to our airlines so that they become global players. Policy measures are being taken to make a quantum leap in infrastructure sectors such as airports, roads, power, ports and railways.

At the same time, we are increasing the emphasis on education, health and employment. The education cess, the Rural Health Mission, the Food for Work Programme to be followed by an employment guarantee are all major initiatives to make our economy a caring one.

I am happy to inform you that we will be doing away with the restrictive provisions of Press Note 18 for all future joint ventures with foreign partners. This is a regulatory provision that has been a source of some discomfort to investors.

As I listened to tales of success of Indian firms in the global marketplace and the words of optimism at a recent meeting the Manufacturing Competitiveness Council, I was convinced that measures like Press Note 18 are anachronisms today, having outlived their purpose.

In the new dispensation, while existing joint ventures will continue to be protected by a few provisions of Press Note 18, new joint ventures and collaborations will have to be shaped by commercial contractual agreements based on the free will of partners without government interference.

For existing joint ventures, the protection will be restricted to the same - and not allied "� field and not for defunct or sick joint ventures.

The Partnership Summit has been a forum where you have debated India's economic and strategic relations with the world. In this sphere too, we must move away from "incrementalism" to seeking "out-of-the-box" solutions to the challenges we face.

We must have the courage to question our assumptions and challenge pre-conceived notions. We must show a willingness to listen to others, even as we articulate our own concerns in a reasonable and convincing manner.

The national response to the Tsunami tragedy was not only heartening but also showed that in the face of a crisis we have the national will and resources to meet the challenge head on.

The people of India have shown their generosity in a time of distress. They have also shown their determination to be self-reliant, even while being gracious in responding to offers of assistance.

Our response was not shaped by false pride or by chauvinism. We are happy to be part of a global community and to work with it. We will seek international assistance for our reconstruction effort.

I submit to you that the "do-it-yourself" mood of the Nation is not an index of our isolationism. Far from it, it is an index of our resolve to turn an adversity into an opportunity.