There has been a significant transformation that has taken place over the last 25 years. The Indian economy has changed in many ways. But it is not a time for us to get complacent. There is a lot more that needs to be done. There has been been a significant transformation in the consulting business as well. To speak more on this topic, CNBC-TV18's Shereen Bhan caught up with N Chandrasekaran, Chairman of Tata Sons, Rajnish Kumar, Chairman of State Bank of India (SBI), Uday Kotak, Exec VC & MD of Kotak Mahindra Bank, Madhav Chavan, CEO of Pratham and Dominic Barton, Managing Partner at McKinsey Global.

Below is the verbatim transcript of the discussion.

Q: When we talk about India today, we talk about India being able to enjoy a governance premium. You of course, put together a 177 page report on corporate governance in India. But let me talk about public governance because the Indian economy is being rerated on account of this premium that people seem to exercise when it comes to public governance. How significant a change is that and what will it mean as far as India's future is concerned?

Kotak: I think India has come a long way but the road ahead is even more interesting and challenging. Therefore, if I look at China and India, if you look at the last 20 years, India has grown at about 5.5 percent and our per capita gross domestic product (GDP) is now about USD 1,800. China is about five times our size in just hard GDP and India needs to grow on a per capita GDP of about 8 percent a year for the next 20 years to reach China's level of per capita GDP. This is per capita therefore, if you take a population growth of 1-1.2 percent, for the next 20 years, we must grow at 9 percent to reach the current GDP of China and that is our challenge.

Q: Is it doable?

Kotak: I think it is doable and a lot depends on the audience and the people around in this room.

Q: That will probably be the first question that we ask the audience to poll on, but go ahead.

Kotak: I believe that in addition to the hard stuff, India needs to do a lot of the soft stuff and as somebody once said, for a country to be a rich country or a truly developed country, it is not that the poor have cars, it is that the rich use public transport.

Q: Let us not kid ourselves. That is not going to happen.

Kotak: That is something which we really need to bring. How do the rich in this country use public transport so that we bring the level of society such that the quality of our services and infrastructure and the softer aspects have really got us there.

Q: This challenge that Mr Kotak was just talking about and while we do obsess in India whether we are growing at 7.5 percent or 8 percent or eventually 8 percent plus, the fact of the matter is that when you talk about per capita GDP, we are lowest in the Brazil, Russia, India, China and South Africa (BRICS) nations, not just in comparison to China, we are the lowest in the G20 nations as well. What will it take to ensure that we see the kind of growth and the quality of growth that we just spoke about?

Chandrasekaran: I have a slightly different view on this. Let us take a figure like 6 percent. Assume that we are going to grow at 6 percent on average for the next 30 years. Simple math that our GDP will go from the current USD 2,000 level, per capita income will grow USD 18,000 and that is a big number. That is where South Korea is today more or less. The issue is not whether we will grow at 6 percent, 7 percent, 8 percent. If we grow at 6 percent it takes 30-32 years. Can we do it in 20 years? It is not that uniformly you will grow at 9 percent every year. It is like you will have a good day, you will have a good year and you will not have a good year. So if you can manage to grow at an average 6-7 percent and have a few good years, then it can happen. That is the way to look at it.

Q: When you say a few good years, are you talking about an 8 percent plus kind of growth number?

Chandrasekaran: Whatever is the number. The math is very clear. So, the journey of going from sub-USD 2,000 levels, to go to USD 18,000-20,000 level is going to be a pretty exciting and exhilarating one and it is possible, but I am not going to make a bet whether it is going to be 9 percent this year or 7 percent. Actually in the overall scheme of things it does not matter.

Q: But what do you believe will continue to be the drivers to ensure that we do, even whether it is 6 percent, that we do actually see that 6 percent kind of growth number?

Chandrasekaran: I think it will happen. I think you cannot, I am going to be a little bit critical here, you cannot get up in the morning every day and say what is the GDP growth going to be this quarter. We have got to get away from that. We have to start seeing the possibilities. Look at our exports. If you look at the quality of exports, a country which has USD 1,800 of per capita income, usually, countries that have that level of per capita income typically will export commodities. But the quality of exports from India mirrors that of countries which have very significant high level of per capita income.

You should put it down to the level of intellect that is there in this country. So this country has tremendous intellect. The quality of exports, the quality of engagements that we do outside is pretty significant. So all of this will play out. But we need an inflection point. I do not know whether the inflection point will come when it is USD 3,000, USD 5,000 and there are studies which say that when you cross USD 6,000 of per capita income, suddenly you see, but I am not a statistician. But I think these signs are all positive.

Q: I think Chandra raised a very important point and that is the focus on India’s human capital. Even if one were to look at the data at this point in time, whether it is the human development index, it is the education sector that you look at very closely, if anything is going to actually hold India back, it will be the fact that we don’t make enough transformative progress on some of those crucial issues. How critical is it going to be to put our energy, our attention, government intervention, government money, private sector capital on addressing the challenges when it comes to human capital?

Chavan: Sometimes it worries me that human capital and human beings don’t actually fit in our calculations. I am glad that Uday Kotak made this point that we have to improve the public services which can be used by everybody not just the poor. I think that is extremely important and that is where we are lagging behind.

Just a few days ago Bill Gates wrote a piece and said if you don’t focus on health and nutrition then you are going to be in a lot of trouble. He forgot to mention education, which was mentioned later on.

The interesting point is and this is something that I have been sort of mulling over, we have achieved all this growth in the past 30-40 years, we have come from being a poor country to a lower middle income country. This has happened although we were backward in education and health and so on. Now one may be tempted to say that what is the problem? You train and teach and make good intellectual capital with 200-300 million top Indian 30 percent population and you can make do. That is going to be a very dangerous thing because henceforth a lot of things are going to be automated and you may not require the kind of human capital, you may need very high level of human capital but in a small proportion and this is threatening. You can already see on the ground that the jobs availability, aspirations of the young people are humongous and at the same time you find that those kinds of jobs are just not available for the education they have. This is going to be worrisome.

So, it may not actually hurt industrial growth or growth of IT companies together but it may hurt in other ways like creating social tensions, political tensions and people will want more and you will have to solve those problems.

Q: Do you see enough or adequate attention being given to address some of these issues on the ground realistically?

Chavan: I don’t think so. Again, if you don’t have clean water, go get bottled water. It is not about my country everywhere you should get clean tap water, why shouldn’t you do that? So, it has not been done, it is not being done. It is like in the traffic. In a traffic jam everybody tries to go around and in India there is no three lane road, it quickly becomes six lane because everybody wants to get ahead, I should get ahead, it is not about the traffic should be smooth and that is going to hurt us a lot. So, the soft side is going to be very important. It is not just what the government does, it is going to me much more than that.

Q: You have been bullish on India for a long time now despite the disenchantment around 2013 but you believe that 2014 the mood around India has changed significantly but you are concerned about the fact that we are not skilling people for the kinds of jobs that will be available. We are not skilling people for the kind of skills they will require in the future. How critical is that going to be to be able to achieve this middle income dream that we have by 2025?

Barton: I think it is one of the most fundamental issues to make sure that people have jobs. Jobs is the new currency of the realm I think in globalisation. One of the challenges and I am optimist, is that the speed of the world is going faster and faster. So, we typically had a generation to be able to adapt to technological shifts and those are happening at a much faster rate. So, the idea for people who are already trained to assume that you are set after 25 years of education and you are just going to work of that investment for the rest of your life is over. We are going to have to do lifelong learning.

Then if you think about the hundreds of millions of people that are going to have to move to services and other parts, there are lots of opportunities, we are going to have to think about an education system that is much more nimble, modular, fast paced, low cost. It is going to be things like the cost per employee day. We have to have different measures when we think about education – the cost per employee day - how much does it take to be able to train someone.

I don’t believe you have to have someone sitting in the school for 8 years to be capable to be adding value in the system. So, one of the most significant areas of reform is going to be in education and breaking some orthodoxies and how we do it to enable people to be able to get into the jobs that are there, that said I am actually quite bullish about India overall and I am bullish that we will figure it out.

If I just think about some of the sectors – tourism, which is going to be a huge opportunity. It is a wonderful way for people to come into the system.

If you think about the US, the hospitality industry is one of the biggest and has been one of the biggest flywheels for bringing immigrants which by the way have been a very significant portion of the US economic growth, working in a hotel, working in a resort, doing dry cleaning, that was the way people came in. The challenge is, as that gets automated it becomes harder to be able to do it. That said, I think there are so many opportunities in terms of growth given whether it is 9 or 6 percent or whatever it is, we should have the demand for it but skilling will be the challenge.

Q: Since we are talking about the levers that are going to be able to take India to the next wave of growth, the public sector plays a very important role in the growth of the Indian economy. The Indian banking sector plays a critical role as far as the health of the Indian economy is concerned. The banking sector itself is seeing many changes on account of digitsation and so on and so forth, but as you look forward today, what of the things that you are most excited about and what are the things that you are most concerned about? The upside and the downside, give me the list of priorities that you would focus on.

Kumar: Definitely the exciting thing is about the digital transformation which is happening in the country and banks, they have responded to that very well. Particularly, what are the enablers? The enablers are that telecom revolution which has started about 30 years ago.

Q: Yes, pretty much along with liberalisation, yes.

Kumar: Absolutely. The other was the IT sector which till 1985 was largely unknown and suddenly it created waves in Silicon Valley. So, USA took advantage of India's skills in IT first and we took the advantage later on. So this digital transformation, it will definitely bring in efficiencies in many ways and definitely, it is around the cost efficiencies. It is the efficiencies which can be brought by adopting the risk management tools which is the efficiency for enhancing the revenues through data analytics. So there is a vast ocean of opportunities and that is where I am happy to say that banking system in India has responded quite well and we at SBI definitely, being the leader in the industry, we are doing our bit in leading that transformation which is happening in the banking industry. And in any country, whether it is developed economies or it is developing economy, the role of the banking sector, it is very critical for the growth of the country. Without a robust banking and financial system, the growth in any country cannot be achieved.

Q: Since we are talking about the banking sector, the argument from the government for consolidation in the banking sector has been that India needs to create a few world class and world sized banks. Why should we have so many, a smattering of small banks? We should have the capability to create large world class and world sized banks. SBI is one of the first off the block. You have seven subsidiaries now to be able to integrate within your fold. How realistic is it to imagine a future where we will see world class and world sized Indian banks? How soon?

Kumar: Now, you can define world class in many ways, but if we are talking about the size, then definitely the gap between SBI and the next bank, it is very huge. And if the consolidation has to happen and if we are talking about the size then you cannot achieve it by consolidating smaller banks. Then only when the large banks, they come together and merge, only then you can create a scale which is anywhere close to SBI. So in the next bank in terms of size is less than one-fourth of SBI.

Q: So it is not about merging the weaker banks with the stronger banks?

Kumar: Not at all. That would be a very, I would say, wrong strategy to adopt. It is all about that if you want to create size, you want to create world class bank, then you will definitely have to consolidate some bigger banks. What these smaller banks do and particularly the public sector banks space, there can be differentiated banking, there can be niche banking. After all we are a country of 1.3 billion people and there is a scope for thousands of banks to flourish and that is the model you see in USA. You have a bank which has one branch and still it is a bank. But there are large banks which take care of the other part which is about development, project financing, corporate credit. So in my view, there is a space for everyone to exist. It is all about finding the niche and that is definitely the need of the hour that we at least have 3-4 more institutions which not of SBI's size, but at least close to that.

Q: Appetite and the support from the government to actually do a big-ticket consolidation?

Kumar: I am sure that, like the situation we are currently in and do we need public sector banks dominating 70 percent of the assets in the country and particularly when now, the private sector banks, they have found their niche, they are doing tremendous service in the country, this is definitely a moot question that what should be the role of the public sector banks. But again, considering that there is a huge social banking agenda, you will need in this country, public sector banks for a fairly long time because by nature, I feel that private capital or private sector banks would not be able to fulfil the social inclusion agenda.

Q: You won’t be able to fulfil the social inclusion agenda?

Kotak: First of all I agree with Rajnish Kumar, men may come and men may go but SBI will be here forever. That is one point I just wanted to say.

Q: That is a great endorsement from a competitor.

Kotak: I think about him as a guru. So coming to the points which have been raised on – and I am going back to first of all on social banking with RBI norms for priorities sector and agri and all, they are applicable to all the banks. Therefore, each of us has to do a bit and I think most of the banks are doing it. But on the more fundamental point about the banking and the future, I feel that in the next three-five years including in India banking will not remain what it is. I think it is fundamentally and structurally changing.

Q: In what way?

Kotak: In two ways. Number one, we are moving to a world where financial intermediation is getting to be a much broader concept. Therefore, a customer of today is looking at what makes sense for him or her. It could be through a bank, it could be through a mutual fund, it could be through an insurance company, it could be through an NBFC or it could be through an advisory practice. So customers are looking for solutions whichever the service provider and it is here that banks have to fundamentally redefine their roles. Are they in the role of bundling products or are they in the role of finding solutions appropriate for the customer. So this is one.

Second, I think the digital transformation is going to dramatically squeeze the costs at which intermediation will happen most of the banks in India today have had an intermediation cost of somewhere in the two to two and half percent range. I think the future is not going to give this luxury to banking. We will have to be somewhere on a basis points, which is 100 bps is a lot and this 2-2.5 percent luxury for intermediation between the saver and the borrower is going to be under serious threat and we as financial services intermediaries and not just as banks have to redefine our future and I think this happens in the next three-five years.

Q: Quick point on consolidation.

Kotak: I think consolidation in financial services will happen because of needs of efficiency because of needs of having management teams, which can manage risks. One of the challenges which Indian financial sector has faced over the last 8-10 years is inability to manage risks well and there are not that many management teams out there to have 50-100 intermediaries being able to manage risks in a very fast changing environment and frankly digital will lead to disruption. If you look at what is happening in the telecom space from a level of 13-15 players we are down to 3, we are going to see that in many other sectors and I believe that the future is not a banking dominant financial services but a financial services, which includes banking.

Q: You just gave the telecom industry for example, so let me just labour on that for a second, yes, we are down to 3 players, yes we have seen enormous amount of disruption but we have also seen enormous amount of disruption as far as the average revenue per user or the ARPU is concerned, is that where the Indian banking system is going to be headed?

Kotak: In my view banks have to be ready for that. A 250 bps cost of intermediation and maybe it is because of compliance, maybe it is because of obligations like CRR, SLR, the kind of asset pools we have, there are lots of reasons for it but the market place is not going to give that luxury and that is where I think you are going to see a significant consolidation either through combinations or mortality.

Q: Which ones would you place your bets on?

Kotak: I think from the overall system point of view, combination is better than mortality but as you ease up entry like we have seen the policymakers make it easier for entry into banking and financial services. So if you ease entry, you should be ready for exit and exit can happen either through mortality or combinations and we should be ready for both and the system must be having the foundations of a strong framework to handle mortality in the financial sector as well.

Q: Since we are talking about the India and the world the top 100 multinational companies, eight Indian 41 Chinese, are we likely to see that change, are we likely to see a significant transformation in that setting order and what will it take?

Chandrasekaran: We love comparisons, don’t we? Before I answer your question, you made a comment about when are you going to have world class banks. I feel some of our banks are world class.

Q: I said that the government said that they want world class and world sized banks?

Chandrasekaran: Size I agree with you but in terms of the way they serve, the way they use technology, some of our banks are today world class. I think size does matter and definitely I think the mood of the hour is that there will be some consolidation.

I think definitely there will be a lot more companies, which will become global, which will become top500, top1000 companies from India. It will happen. As I said, it is all about how fast it will accelerate. We don’t have to debate much, all of us would agree that there are many things that are in favour of India starting from demography to the rising income levels to the consumer aspirations. Every single way you look at it, there are many things that are going for us but there are obviously challenges and those challenges are common for everybody. Jobs is a challenge worldwide, environment is a challenge worldwide, aging population is a challenge worldwide. So there have to be solutions that have to be found for these problems.

Q: So you think the focus needs to be on the domestic market?

Chandrasekaran: Yes, absolutely. I said it, it is going to be the greatest market for all of our lifetimes. I am not saying that you should not focus on international markets. As a group today we are present in 100 countries, out of the 700,000 people we have, 150,000 people are outside India, two-thirds of our revenues are from outside especially the top two companies which are more successful, TCS and Jaguar is 90 percent plus international income. So we will evaluate every international opportunity on its merits but India is a happening place. It will be the place to be.

Q: So if India is the happening place and India is the place to be then from a capital deployment perspective, would it be fair to assume that capital will focus on chasing growth and demand in the Indian market as opposed to trying to do another Jaguar?

Chandrasekaran: Yes, that is what. It is never either or. I think every business case has to be evaluated on its merits when there is an opportunity, we will go after it outside but definitely in India there is a tremendous opportunity, we will deploy capital in India, no question about it.

Q: The bias though much more on the Indian market and do you believe for a global champion out of India, it will be imperative to sort of consolidate your position in India before you look outside or do you believe that you could do it anywhere? You could look outside and then look inside?

Chandrasekaran: We are always interested in opportunities. We look both in India and outside. So it is never – this is the pecking order.

The fact remains that India will be a growth market for a long time to come.

Q: But what does your gut tell you, are Indian companies going to be less acquisitive when it comes to outbound M&A?

Chandrasekaran: This is for Dominic Barton, Managing Partner at McKindey Global. This is a typical consultance question.

Q: He will give the answer that you want him to give. That is also the job of a consultance. In terms of the appetite for the kind of acquisitions that we saw, for instance the Tata Group doing, the Corus doing, the Jaguar-LandRover, do you see that outbound FDI, Indian companies going out there and making acquisitions aboard, that is going to be something that perhaps given the strength in the domestic market is going to be perhaps on the backburner?

Barton: One thing I would also say about those 41 Chinese companies, most of them they are big companies but they are primarily Chinese companies. They have got the massive markets that they can go after, so without telling the time, give me a watch-type story, I agree with Chandrasekaran that this is the place where people want to be.

This is where – if you are in the consumer goods business, if you are in the infrastructure business or if you are in the financial services business, you want to be here. So before you go out, I would say why wouldn’t you look at what you got here. I think in technologies, India is leapfrogging on many dimensions, that will be the opportunity but I will take one - healthcare, healthcare is one of the most rigid backward stone-age industry in North America that I have ever seen because of regulation, high cost, low service and you are going to see innovation going on in this country. We are seeing it in China, that – and also by the way in East Africa, that is the stuff that is going to come we think into that part of the world but while you are here, there are just waves of growth. So I don’t think he have to define your success by being global. I think you wanted to find your success by – are you the very best in the world because you are going to have to be in this global world and what you do and then go after the market here.

Q: If I could just extend that, we are under 2 percent of world trade today. If we have the aspiration to want to continue to grow and whether it is 6 percent or 8 percent or 9 percent, can we do that without increasing the share of world trade, without pushing our export story significantly? We have got plenty of historical evidence to show that that export push is needed if we want to continue to sustain these growth rates?

Barton: I don’t agree with you. I think that is an older model. As Uday Kotak said, when you are exporting commodities and you are coming out of a system that is the way to do it. If you have the – we have never seen in human history, China is beginning to do that but this size of domestic population and I agree we have to get it skilled and having jobs to be able to have the demand but I think what you are going to see is a lot more imports coming in because you are going to have to have commodities to help fuel the demand that is going on here.

But I think when you do grow, you do tend to trade more but I don’t think that has to be the lever. I think it is unlocking – if we could focus on unlocking the growth here breaking the execution barriers, the regulatory challenges that is going to give us a far bigger growth opportunity than trying to focus on export markets. That is my own personal view.

Q: Let me now move to another important issue. We started by talking about public governance but let me talk about corporate governance. Let me start by asking you because you have just put together an almost 200-page report on why you feel that there is a need to redefine how we see governance in India. You call it moving away from the raja-praja model to a more custodian model. A] Why do you think that is important? B] Do you believe that we are actually headed in that direction? And the assumption then would be that most companies are operating in the raja-praja model.

Kotak: Think about the total number of companies in India. We have a total of 1.2 million companies, 12 lakh companies, out of which listed companies is only 5,000. So we have 5,000 listed companies which is a large number because even in the US you have 5,000 listed companies. Now look at the increase in domestic savings flows into financial assets we have seen in the last 12-18 months.

The reason for that is high real interest rates followed by government policy actions including demonetisation and GST which has led to a significant formalisation of savings. So as more and more savers' money in India is now coming into these 5,000 companies, we have to really nurture the trust of these savers and hold it for the next 10-30 years. That is one.

Number two, if again on a global basis, Indian price-earnings ratios (P/E) are better than many other countries and we need to nurture the quality of our governance to be able to command a premium in P/E to be able to attract global investment into India. Therefore, if we want domestic savings to grow faster into financial assets, combined by having that premium valuation for global capital, the time has come for us to continue down the path of significantly upping our game in governance.

And I must say, on corporate governance a lot has been done and therefore, what we are recommending is more evolutionary, not revolutionary because that is the way to go and I fundamentally believe that India is moving away from the traditional raja-praja model to a true trustee model. A trustee model can be a promoter, can be a professional manager, can be boards, can be independent management, but to work towards the interest of the entire body of shareholders and not a segment or a section of the shareholders because that is what will get true trust and get us the premiums which Indian companies deserve.

And Indian companies have made a lot of progress, so if we continue down this path, it will fund our domestic growth. And as Dominic and Chandra said, we need to focus more on domestic growth. If we are not going to depend that much on exports, we will have to find a way of funding our current account deficits and the balance of payments. So money has to come from somewhere for it. And we have so far in the last many years, our current account has been funded by balance of payments including foreign investment. So either we say we want to be an export led model and not depend on it or else, up our game and get premium valuations for Indian companies.

Q: So let me pick up on a couple of points that you made. You said that this is, if we could broadly call it corporate governance 3.0, which is the report that you put out, if this is not revolutionary, it is evolutionary, it is another layer over and above the system that we already have in place, is there need for more regulation/legislation because a lot of the recommendations that you have proposed will require legislative change as well which the government will have to consider. But is that the need of the hour or is better enforcement the need of the hour? From a regulatory perspective, is better enforcement the need of the hour today?

Kotak: One of the things we have commented on our report is on the need for dramatic capacity building with the regulator. And just to give you statistics, SEC has 5,000 employees for 5,000 companies. India, SEBI has 780. Corporate Finance Department, SEC is 800 people. Corporate Finance Department of our regulator is 30 people. Therefore, if we have to really have the capacity to handle huge amounts of savings into this narrow funnel of 5,000 companies, we will have to up our game, not only on the prescriptive aspects, but more importantly on capability and intent aspects as well, as a society.

Q: Where do you see the most trouble in the recommendations being accepted? Which specific recommendation, do you believe you are going to see resistance from corporate India as well as perhaps the government?

Kotak: The good news is our job is done. Now it is up to the regulators, policy makers in the government and media of course, media plays a big role. So Shereen, you have more influence from here than I do.

Q: What will it take to ensure effectiveness of boards? What will it take to ensure that boards actually function for all stakeholders, all shareholders. One of the recommendations is also splitting the role of Chairman and CEO. Do you believe that that is necessarily the best way forward?

Chandrasekaran: I can give you two perspectives. One from group perspective and second is overall. I think from group perspective, the Tata Group has established governance way before anyone of this was formalised. So at the end of the day to me personally governance is about what is right. The moment you are trying to read the rulebook, 10 times over try to interpret - there is a problem. Fundamentally governance is all about fundamentally feeling (at heart) that you are doing the right thing and it is a culture. So the answer to your first question is what does it take is culture. It is not so much enforcement. We can talk so many things. All of this is required to do things in orderly manner. You need to have evolutionary or revolutionary principles and you need to have the bandwidth, capacity building and all that but fundamentally it is culture. How do you, company by company, have that culture of doing right thing and that's all it takes.

Q: It probably might be easier for Mr. Chandrasekaran as well as Mr. Kotak to talk about culture. In a public sector enterprise - and I think public sector undertaking (PSUs) get a lot of flat and sometimes unfairly so as well but how do you ensure that you actually build a culture that is merit based, you build a culture that rewards all stakeholders, all shareholders. How easy or difficult is it to do that?

Kumar: Even if you take an example of State Bank of India (SBI) and today nobody questions its corporate governance standards and we are definitely owned by Government of India. So the problem arises when there is a difference between what you practice and what you preach. You may write papers, you may have debate around whether we should have single position of MD, CEO and Chairman or you can have two positions but I have my doubts that these types of structures do really help. What I would believe and agree is with Mr. Chandra, so Tatas for centuries. So today even for banking system if we have to write a cheque, we do not follow the process. We simply write the cheques because we want money from bank and from where the confidence comes in that belief that they will not do anything wrong and same I can say with certain degree of confidence and certainty that State Bank of India despite being public sector it has set good governance standards and despite the fact that our CEOs change very frequently but still there is something in the system and its DNA and the way people have brought up that there are certain value systems which are taught or which you learn or which you imbibe and when people reach to the top they take those value systems and then the standards are maintained. There may be some degree of variance here and there because it is a large institution but ultimately it is all about the DNA, the culture, the ethics, the integrity part and in a bank, as compared to manufacturing sector or in a financial entity it is the corporate governance and integrity which matters most.

Q: It also helps that you are listed so you do need to ensure compliance with listings regulations etc. Would it been different if you were not?

Kumar: I do not think so but it does like when you are listed the biggest problem about listing is that quarter-after-quarter you are facing, you and the analysts, so that makes the task a bit difficult but does it really help in improving the corporate governance standards. It is a debatable point.

Q: What you are seeing globally at this point of time and where do you see India when it comes to things like corporate governance. Is this at all an issue when you talk to investors who are looking at investing in India? What is the outlook on this subject?

Barton: I do think governance does matter and people do want to look at what the standards are and how people proceed. It is back to what Uday said about the price earnings multiples. We have seen there are very big differences in a corporate governance system in countries on what the PE multiples are. There is evidence of that so it does matter. I would like to pick up on one of the comments though which was just mentioned and it is something we have talked about before - the global markets especially if I could call it Anglo-Saxon market have become much more short-term over the last 30 years quarterly driven and that is a problem because it is very difficult to be building for the long-term with this amazing amount of growth and by the way it is not going to be smooth. I do not think anyone here and I am learning from this group than saying anything, it is not going to be a smooth path; you are saying 6 percent-9 percent. So the idea that you are going to meet quarterly numbers is crazy and the Anglo-Saxon markets become too short-term and one of the most important factors is we need long-term money, pension funds, we need people investing for 8-10-20-25 years and if we do that the returns will be better and you will get better performance and so that is the thing. I would hope that our markets, our capital markets and the investors, the long-term money is long-term and that would be an advantage and I would argue that there is more of that opportunity to be had here then there is in New York or in London right now. So the long-term money is important.

Q: Let me use the last few minutes to talk about what we would like to see in terms of being able to redefine the way we see capitalism and let me ask you in the context of we need money to invest in education and healthcare. We have been talking about this collaborative arrangement between governments whether at state level or the central level as well as the private sector. Philanthropy has it part to play but if I were to ask you about redefining the idea of capitalism to make it work for everybody. What is it that you would like to see change in India in your experience of having worked in these sectors?

Chavan: Those who have socialism won't be too bad. It is not only about wealth creation. It is also about distribution and that is what we are saying and if you do not focus on that -- I think we were too busy making money and when you do all that then you forget that you have to do something with that money whether it is private markets, corporate social responsibility (CSR) today - Rohini and Nandan Nilekani have declared that they are going to give away half of their wealth. People are doing that but it is not about charity. You have to look at these public services, public goods as an investment and go after them.

I do not think we have that. I think our focus has been entirely on business and its growth. I think we need to have a lot of focus on how education is going to change, how we learn - our globalisation, Indian companies are going out and doing global things. There is a lot that we can learn here. This innovation - what happens is you try to solve your own problems and you learn a lot like we learnt a lot and what we learnt in trying to solve Indian problems, we came up with indigenous solutions and those were attractive to the world and this is happening to many Indian organisations. There is a group called Design for Change. They are in 66 countries because their solution is attractive but not many people recognise it. So there are a lot of groups that are doing this even in the social sector. I think we have to focus on what our problem is and not necessarily borrow. People tell me don't reinvent the wheel but I keep saying the path to progress and development is different in different countries. So you might have to reinvent the path, why not.

Q: Speaking of reinvention let me ask you what your ask is from the private sector. You spoke about models of social entrepreneurship and there is a bunch of them, we are seeing whole new set of companies emerge in this space but what is your ask for people like Mr. Kotak, Mr. Kumar, Mr. Chandra sitting here?

Chavan: I think there is one important development that is shaping the relationship between the corporate sector and social sector which is the CSR provisions. A lot of that could be used if the government, the corporate sector and the social sector and people like us sit together and say how you can make the government system work and how can you make improve the efficiency and effectiveness of the governmental system.

Q: What is coming in the way of that? Is it an issue of control? Is it an issue of the government? You know we have got models of where government infrastructures being managed by the private sector. So what is coming in the way of being able to get everybody on the same page?

Chavan: At least as far as CSR law is concerned the whole thing has to mature a little bit. Right now everybody is thinking this is compliance, I got to do it. If I do not do it it is going to be a problem and better do it in my backyard so I can show things. I think the government also has to step-up and this is not a small trivial amount. We are looking at some Rs 9,000 crore that was spent and if you say that let us now focus and create working models of how things can improve and use them to improve governmental services. The tendency is, and I have seen this since the birth of Pratham, government people think they know what they are doing and that is the end of it. Some people do not think so. Corporate sector says do not bother me too much, here is the money get things done and you are done. Social sector thinks they are the best in the world, like us. So it is important that people come together and focus on what needs to be done and I do not think we are clear on that. We are not clear on that - that needs to be done.

Q: As you look at your dashboard today and let us leave India outside for a little bit. What is the one big global challenge that you would be most concerned about that could impact India and what is the one big opportunity that you would be most excited about that Indian companies should also focus on?

Barton: It is hard to pick one on either of those and I am an optimistic; I think the big thing is that there is so much change. So the big thing I worry about is jobs because we got to ensure that people have jobs in a world that is moving faster and faster. I think we can do it but it is going to take private sector and social sector innovation because the systems aren't there and if we do not in a world where one person can create humongous amount of wealth, you can even create a lot of instability. It is not trade. It is going to be more technology. So, getting that right is going to be important. On the other hand, on the flip side I am so excited by digitisation and technology because it is going to enable hundreds of millions of people to be able to get access to information, to education, to jobs, to markets and so forth. So there is a challenge on the jobs but there is an opportunity and especially in this country to enable hundreds of millions of people to have access to education, to information and an ability to get jobs which is going to help make this such an amazing growth country.

Q: The one thing that you are confident about and the one risk that you would be watching out for what is on your dashboard today?

Chavan: I believe in people and people find a solution, sometimes the path is not easy but I believe in Indian people. We do tend to find, not that other people do not find but Indians are particularly good at finding and so we will find and that I am very-very sure of. The risk is that we take the risk lightly. We should not and you may ignore some read lights and we should not do that and the earlier signs are already there. There are all these reservation kind of agitations going on. What are they saying that needs to be looked into and have to be address beyond political alliance and that is different.

Q: Equitable distribution?

Chavan: There is a lot more happening at the bottom and we need to do something about it.

Kumar: Yes, opportunity is big but my biggest worry is that we are heavily under invested when it comes to physical and social infrastructure in this country. The population is growing but the growth in infrastructure is not keeping pace and that is a big threat on the Indian economy and it is pulling it back. Opportunity, of course all of us know that we can grow at 6-6.5-7 percent for anyone and everyone there is a huge opportunity for growth be it the provider of goods or be it the provider of services.

Chandrasekaran: The challenge is we have shortage of everything. We have shortage of infrastructure, shortage of skills, number of doctors, teachers, lawyers everything and we also have to create 100 million job. The opportunity is to solve the problem by defining the future of jobs so that we create those jobs that address these challenges.

Opportunity I think is that I will be bolder and say that we have an opportunity to grow at 9 percent; the capability is there. The biggest enemies are we Indian ourselves for our growth. Therefore, we have to find a way of getting to 8-9 percent growth. I think that is the opportunity. On the risk, it is a civil society issue and I will give an example. Two most important pillars of civil society are teachers and judges. Best of talent does not want to go there today and I will believe that India has truly progressed and developed when best of talent wants to become a teacher and the best of lawyers want to become judges. That is the day I will say India has truly arrived.