Attracting Global Talent and Retaining Home Grown Talent in India for Sustainable Growth

 

While India produces world-class STEM talent, we face an unprecedented challenge: our brightest minds are increasingly choosing opportunities abroad, and global innovators bypass India for other emerging markets.

The implications of failing to address these challenges extend far beyond individual career trajectories. We risk a cascading series of economic and strategic setbacks that will compromise India's position in the global knowledge economy.

The issue of brain drain or attracting talent cannot be seen in isolation from other issues. Any country can attract talent if and only if it gets its fundamentals right and there are no shortcuts. If Indian political establishment truly believes that it values talent and want India to be a global talent hub, it needs to build the first world rule of law and financial and education systems to achieve that organically and even take political risks on the way there. This is going to be a long journey. But a good starting point may be to acknowledge the gaps create a long-term path to reach there.

India does not have the luxury of 200+ years that the OECD countries took to reach the “First World”. Indian State and society need to shed its anti-elite, anti-intellectual mindset if we wish to be a hub for local and global talent. Else, if current market conditions dictate that we repel talent and reversing that is not our priority as a nation, then let’s make peace with the situation and move on.

This document tries to outline a comprehensive strategy to reverse this trend and position India as the premier destination for knowledge workers worldwide.

Background: Factors Influencing Attractiveness of a Country   

Factor	Where India Stands
Natural Climate	High
Rule of Law without Over-reach	Low
Robust Unbiased Institutions	Low
Culture of Acceptance and Trust	Low
Network Effects/ Ecosystems	Low
Job Ecosystem	Low
Functioning Democracy	Medium
Equity in Rules and Regulations	Low
High Productivity Firms	Low
High Quality Education	Low
Simple and Low Taxation	Low
Social Security	Low
Net FDI and FPI	Low
Predictability of Rules	Low

Background: Decoding India’s Multi-nations 

		Drivers of Indian Economy - Focus on this Population to Achieve High Long Term Growth
	India I	India II	India  III
Ballpark Size of Nation	80%	15%	4%
Migration  Participation	0%	50%	50%
Direct Tax Contribution	0%	50%	50%
Tax Benefits Received	80%	10%	10%
Symbolized by	Indian Railways  -  Tier II and  III  Non A/C	Indian Railways Tier II and III - A/C Indian Railways - Vande Bharat Domestic Air Travel	Indian Railways - Tier I A/C Indian Railways - Vande Bharat Domestic/International Air Travel
Profile	Low Quality of Education Tier I/II/III Cities in India  and Rural India Pay NO  Direct Taxes High dependence on govt benefit schemes Aspire to Move to India II	Medium Quality of Education Tier I/II/III Cities in India  Pay Medium to High  Direct Taxes Highly Motivated to Move to India  III or Abroad	First World Quality of Education Tier I Cities in India  in Isolated Communities Pay Ultra High Direct Taxes Aspire to Move to Abroad
How State Looks at Them	High Participation/High Stakes in Electoral Politics	High Participation/Medium Stakes  in Electoral Politics	Low Participation/NO Stakes  in Electoral Politics
How They Look at State	Very Vocal- Low Trust - High Dependence	Vocal - Low Trust - Medium Dependence	Not Vocal - Low Trust - No Dependence
Education Profile	Public  School Education Tier III  Humanities and Fundamental Science Education No Education/No Graduation	Private School Education Tier  II Engineering/Medical Education Tier II/III  Humanities and Fundamental Science  Education	Private School Education Tier I Engineering/Medical/Humanities  Education Tier I Fundamental Science Education (Science) IITs/AAIMS/IIMs/IISc/DSE
Dominant Work Profile	Agricultural and related sectors Govt Contractors - Low Tech MSME workers Gig workers Household workers Teachers at Private n Public  Schools Professors at Tier III Institutes Low Level Govt Jobs - Civil and Military	Indian IT Services Sector Govt Contractors - High Tech Industrial Middle Management MSME Owners Merchants, Small Businesses Professors at Tier II/III  Institutes Private and Public Sector Banks etc Middle Level Beurocrats Middle Level Military Officers Writers, Bloggers, Media, Intellects	GCCs, Senior Management at MNCs in India Industrial Top Management Startup Owners Professors at Tier I  Institutes Sr Beurocrats - IAS/IPS/IFS Sr  Level Military Officers Writers, Bloggers, Media, Intellects
Dominant Zones	Rest of India Delhi-NCR Mumbai (MMR) Pune (PMR) Bangalore Chennai Hyderabad Kolkata Ahmadabad	Delhi-NCR Mumbai (MMR) Pune (PMR) Bangalore Chennai Hyderabad Kolkata Ahmadabad Rest of India	Delhi-NCR Mumbai (MMR) Pune (PMR) Bangalore Chennai Hyderabad Kolkata Ahmadabad Rest of India

  

• Acknowledge the existence of Multination within India.
•  Stop punishing the relatively “Healthy child”.
• Take Political Risk and focus on growth Engine (India II and India III) for critical reforms.
•  Go “All in” on selected Cities to make them Attractive for Global Talent.
•  Cannot move 100 % on India to First World in 20 years. Instead, create Virtual “Small First World” within India in all aspects.

Talent Attractiveness Index

Strategic Choice: Mumbai-Pune Twin City combines Mumbai's exceptional Financial and Job ecosystem with Pune's superior quality of life, safety, and climate, creating an ideal combined place for our pilot Special Economic Corridor.

This belt creates India’s best chance to setup Pilot to create “First World” Ecosystem to attract “First World” Talent.

Proposal Summary

Fixing Everything- Everywhere in India is a long journey.

Instead, Focus on Fixing Everything in Pilot Zones and Somethings Everywhere!

PAN India Actions – High Priority Reforms (H.P.R)

Bring in following long term reforms in multiple fields. The idea is to give message of consistency over longer horizon.

Tax Reforms

·       Reduce corporate Tax to 15 % and freeze for next 20 years.

·       Abolish all Surcharges and cess on Direct tax.

·       Simplify Direct Tax Rules. Bring down the highest Direct Tax Slab to 25 %

·       Abolish Securities Transaction Tax and bring down LTCG to 5 %.

·       Bring down proportionate expenditure on Subsidies to compensate for the loss on tax revenue. 

·       Create a special provision to dedicate 25 % of Direct Tax, Corporate Tax and GST revenue at point of collection/Consumption for Pilot Special Economic Corridor

 

Judicial Reforms

•       Work with Supreme Court for long term judicial efficiency and Law Reforms.
  
•        Prioritize on Corporate Law, Patent law, Contract Law and Land Law reforms.
  
•       Prioritize efficiency in Supreme courts, High Courts and Civil courts in India II and III.    
•      Create a separate capacity for Criminal Laws and Criminal courts.  
•      Idea is to reach first world rule of law and efficiency before 2050.
•     

Financial Rules Reforms

• Allow 100 % F.D.I. is all sectors (except critical sectors like Defense)
• Abolish F.E.M.A.

Education Reforms

• Abolish laws that prohibit foreign Universities setup in India.
• Allow foreign Universities to provide full time Graduate and Postgraduate and PhD degrees in India and integrate them with Indian ecosystem.
• Encourage top STEM universities in India to collaborate with foreign universities.  
• Keep the foreign universities outside UGC/AICTE bureaucracy.
• Provide substantial scholarships to students in STEM field if they return to India after post-graduation/doctorate in specialized fields and work from India.

Government Contracting Reforms

• Setup processes in place for transparent government contracting.
• Create a Detailed S.O.P (bound by law) for high value contracts to cover all stages from competitive bidding (Contract Initiation) till clear acceptance criteria for delivery (Contract Closure) across all ministries

Special Economic Corridor (SEC) Actions

•      Create an integrated body Special Economic Corridor Agency (SECA) under a new law.

•      This Agency will have representation from all 3 layers of government – Union, state and Municipal corporation and Supreme court.

•      The Agency will be accountable to P.M.O and C.M.O.

•      Empower the Agency for Single Window Clearance for all decisions and contracts inside the SEC.

•       Empower the agency to work with Supreme court for setup additional capacity for all disputs within SEC.

•          Within the SEC, the SECA will have authority to direct any decisions bypassing the relevant ministries – Home, Education, HRD, Finance.

•      Empower SECA to appoint and transfer any bureaucrats in and out of SECA zone to build the right capacity and all pressure points. 

•      SECA will have authority to engage with foreign universities, to work with research labs, firms to do setups with SEC at a fast-track mode.

•      SECA will have authority to engage with individuals to (Indian and foreign) to work with them within SEC zone.

•       All the long term Judicial/Education/Financial Reforms will take effect within SEC zone as a special provision while the long-term reforms happen within rest of India.

•      SEC will have responsibility to connect with all other government agencies, ministries within SEC to ensure a smooth functioning on SEC zone in terms of Infrastructure, Law and Order, Education etc.  to ensure a fast resolution and implementation

Expected Gains

·       Talent Attraction and Retention: SEC zone will have potential to start attracting global talent over 3 to 5 years.
 
·       Roadmap Creation: The SEC pilot will create a roadmap for India II and India III over 10 to 20 years and establish it as a global talent magnet.
 
·       Long Term Growth: The long-term reforms will also have long term foundations gains for India I creating overall benefits in terms of Rule of law, Investment Inflow and Economic growth by 2050.
 
·       Network Effects: The Ecosystem will create long term collaboration opportunities and knowledge transfer

Possible Issues Resistance from politician-Beurocrats-Contractor Nexus. SECA may abuse powers in SEC zone. Need to setup detailed checks and balances in formation of SECA Will increase inequality. This is expected. The model values growth over equality SEC model may fail at pilot itself. If this happens, we still have taken minimal limited risk.        References   -      Invisible Infrastructure | Episode 82 | Everything is Everything -       The Wonders of FDI | Episode 111 | Everything is Everything -       How to Fix Our GST | Episode 121 | Everything is Everything -       Let's Talk Tax Collection and Spending!!