MADE IN INDIA: 75 Years of Business and Enterprise
By Amitabh Kant
Rupa, 240 pages Rs 595

Seventy-five years after India attained freedom at the stroke of the midnight hour, the Indian economy has emerged as one of the largest in the world, with a vibrant start-up ecosystem. It has certainly come a long way since the time economic performance, shackled by socialist policies and the License-Permit-Quota Raj, was christened the ‘Hindu rate of growth’. In an attempt to understand this remarkably robust and resilient growth story of Indian business and enterprise, Amitabh Kant offers a multi-faceted survey of the nation’s business heritage and culture in 'Made in India'.

This book provides a ground-breaking account of the development of Indian business and enterprise from the colonial period to the present. It not only introduces readers to formative business leaders (including Jamsetji Tata, Ghanshyam Das Birla and Walchand Hirachand Doshi) and leading firms (Wadia Group, Kirloskar Brothers Limited and Shapoorji Pallonji) but also analyse their presence in the country’s economy, their growth over time and their true impact on society.

'Made in India' comes to life with inspiring stories of entrepreneurs like Sunil Bharti Mittal and Rahul Bhatia, who have navigated many ups and downs on the road to building successful enterprises.

Here is an excerpt from the book:

EXCERPT

CLIMATE CHANGE IS EVERYONE’S BUSINESS

The biggest challenge to global prosperity and development today is climate change. According to the Intergovernmental Panel on Climate Change (IPCC), human-induced climate change is leading to more frequent and intense weather events.1 Recent floods and hurricanes across the world are testament to this fact. The IPCC has predicted that owing to extreme climate or weather events, several ecosystems will be at risk of biodiversity loss in the near-term (2021–40). Urban areas may continue to face damage to their utilities infrastructure. Importantly, the report points out that the level to which the impact of climate change will be felt will depend on the vulnerability of the region, socio-economic development and adaptation efforts. This means that developing countries are likelier to face greater risks than the developed ones.

In the longer term (2040–2100), the hard-earned gains in reducing poverty and increasing food security all stand to be erased. While agricultural productivity has been rising over the past 50 years, the growth rate has been slowing. Extreme weather events in turn adversely impact crop production. Ocean warming will impact aquaculture. Humanitarian crises will be borne out of these climate change impacts.

The evidence is right before our eyes. According to the State of the Global Climate Report 2021, the mean temperature in 2021 was 1.11°C above the pre-industrial era (1850–1900).2 The same report notes that the years between 2015 and 2021 have been the warmest years on record. Based on current policies and actions of global governments, the Climate Action Tracker (CAT) has predicted that by 2100, global temperatures will be 2.5°C–2.9°C above pre-industrial levels.3 Even if we consider current pledges and targets, global warming will only be limited to 2.1°C by 2100. Others have predicted warming of 1.6°C if every country meets its commitments.4 Clearly, a business-as-usual approach will not be enough.

Climate Finance, Justice and India’s Leadership

Ambitious mitigation and adaptation strategies have been laid out by governments across the world, through their Nationally Determined Contributions (NDCs) as per the Paris Agreement in 2015.5 However, meeting these NDCs require investments. Public finance would not be enough in developing countries to undertake the required adaptation and mitigation strategies. For instance, India’s first NDC estimated that between 2015 and 2030, the country would need $2.5 trillion worth of investments (at 2015 prices) to finance its adaptation and mitigation strategies. For context, the size of the Indian economy was $3.1 trillion in 2021. These are mammoth investments that cannot be met from public sources of funding alone. Recognition of this investment gap has existed for some time now.

However, at the same time, it is also true that developing countries have not been responsible for the bulk of historical emissions. For instance, the US, Russia, Canada, Japan and the European Union (EU) accounted for 60 per cent of the total carbon emissions between 1751 and 2017.6 This has left very little carbon space for the rest of the world. Consider the 1.5 degrees warming scenario. Given these historic emissions, only 14 per cent of the carbon space is left for developing countries. Continuing with the 1.5 degrees scenario, India has utilized only 1.8 per cent of the carbon space available. If the globally available carbon space is divided equitably, then India’s available carbon space would have been 17.5 per cent of the total space. If we consider total CO2 emissions (kiloton/kt), India comes up as the third-largest emitting country in the world. However, factoring in population, our country has the lowest emissions among G20 countries on a per capita basis, coming in at 1.8 metric tonnes (MT) per capita. In comparison, this figure stood at 15.2 MT per capita for Australia, 14.7 for the US, 11.7 for Russia and Korea, and 8.5 for Japan.7 Historically, India’s per capita incomes come out to be even lower.

Recognizing the need for developed nations to pay their fair share, the Copenhagen Accord of 2009 saw developed countries pledge to collectively raise $100 billion in climate finance annually till 2020. The Paris Agreement of 2015 reiterated this commitment, extending the annual flows till 2025, and setting $100 billion as the floor for the contributions of developed nations. However, since the Paris Agreement, the annual flows have averaged $74 billion a year, with 2020 seeing $83 billion worth of climate finance mobilized.

Analysis by the Organisation for Economic Co-operation and Development (OECD), in their report, Climate Finance Provided and Mobilised by Developed Countries in 2016–20, shows that public finance continues to dominate, with a limited role for private capital as of now. In funds mobilized through public finance, loans tend to dominate. Mitigation sees more fund flows than adaptation efforts, with the energy and transport sectors receiving the most funding. The OECD report notes that mitigation efforts attract financing due to the size and scale of the projects on offer. A ready pipeline, along with maturing technology, is another factor. Within developing countries, the capacity to absorb loans from multilateral agencies is quite varied. Governance issues, along with domestic capital are key constraints. Given the scale of financing required, countries cannot rely on public and multilateral funds alone.

While the gap has been narrowing, a large cumulative shortfall of commitments still exists. Developed countries have not been doing enough in providing financing for climate change. These countries were able to experience socio-economic transformations during the Industrial Era. Asian countries went from being among the richest in the world to the poorest by the time World War II ended. Colonialism, no doubt, played a key role in the transfer of this wealth. Burning of fossil fuels was another key factor—a source of cheap energy and transport, and the source of plastics, among others. An era of consumerism was also ushered in with increasingly unsustainable lifestyles. A use-and-throw culture thrived. Even the Asian transformations of the past century had similar characteristics.

India has recognized that its transition cannot take the same path seen before in the world.

[The excerpt reproduced with the permission of the publishers.]