U.S.-Iran peace deal welcome, hope it lasts: Anantha Nageswaran

V. Anantha Nageswaran, Chief Economic Advisor (CEA) to the Government of India, said on Monday that the ‘peace agreement’ between Iran and the US on the Strait of Hormuz is “very satisfactory” for a country like India that imports oil, natural gas and fertilizers. He also hoped “this will last.” He advocated for public sector leadership to “accelerate nuclear energy to a seriousness that our current pace does not fully reflect.”

Delivering the virtual keynote on ‘Public Sector Leadership in Shaping India’s Journey to a Developed Country: From Legacy to Future Readiness’ as part of the CPCL Sooper Leadership Series organized by the Madras Management Centre, Chennai, Mr. Nageswaran said: “Public sector leadership must build strategic reserves not just in crude oil but across the spectrum of critical commodities.”

He thought nuclear power was “proof of choke points” and provided the base load a nation of factories and data centers would need. Pointing to a new set of problems, he said the first was resource and energy security. “Modern manufacturing, semiconductors, batteries, defense systems work on molecules. If there are no molecules, there is no production.” The second was research and development. “If the private sector does not care too much about the future, the public sector should be a patient investor who does not care about the future that much.”

Utilities and public resources agencies should be places where frontier capability is built and then shared across energy, materials and process technology, he said.

Feeding businesses

The third was the development of small and medium-sized enterprises. “India’s strength will not come from just a handful of big companies,” he said.

Underlining that Germany’s industrial debt is based on its own debt MittelstandCEA said there are thousands of mid-sized engineering firms with deep technical capacity backed by patient capital and a culture of quality. “India needs its own version” Mittelstand” he claimed.

Observing that the defining advantage of the public sector is its ability to think and act over long horizons, Mr. Nageswaran said: “This is the capacity that India needs most now and is lacking in most places. Public sector leadership is not a relic of an old economic model. In the world we have entered, it is an instrument of national strategy.”

Pointing out that the era of cheap global capital was over, he said that long-term interest rates in the developed economies have crossed 5%. “Money that once diverted its returns to emerging markets now has alternatives within the country. Every dollar that comes to India has to clear a higher bar than before.”

Chenna Petroleum Corporation Limited (CPCL) managing director H. Shankar, professor Ashwin Mahalingam of IIT-Madras Department of Civil Engineering, MMA managing director group captain (retd.) R. Vijayakumar and former chairman of Indian Oil Corporation and CPCL B. Ashok were present on the occasion.