Political stability and economic performance

Our correspondent, S. Choodamani, talked to N. VAGHUL, chairman of the Industrial Credit and Investment Corporation of India,  in Chennai, where he is based most of the time nowadays. Mr Vaghul talked to her about a wide range of subjects, including the state of affairs of Indian industry, Indian attitudes, ICICI's success, management, philosophy and much more.

The interview is long, and we didn't have the heart to cut it. Because Mr Vaghul has been his usual frank and forthright self, and we didn't want you to miss out on his thoughts because of editorial cuts. So we have split the interview into three parts.

To read the second part of the interview, click here.
To read the third part of the interview, click here.
domain-B: Do you believe that the reform process begun in 1991 has made Indian industry more competitive?

N. Vaghul: First of all, the reform process is not yet complete. It started off in 1991 on a solid note, but somewhere within two to three years, it lost its way as it usually happens in India. We could not bring the reform process to a satisfactory conclusion. We are now talking of a second generation of reforms.

Industry has gone into turmoil as a result of the reforms because industries that enjoyed protection for the previous forty years had to face competition -- both internal and international. But whether it has successfully led to a restructuring of Indian industry in order to make it competitive, my answer at the present stage is -- not yet. We are still in the throes of change.

domain-B: In the initial stages of the reform process, gross domestic product grew at a high rate. So we can say that there has been some quantitative growth. But has there been a qualitative growth in terms of say, a restructuring of the Indian industry etc?