The ‘peace deal’ between Iran and the U.S. over the Strait of Hormuz was “very welcome” for a country like India that imports oil, natural gas, and fertilizer, V. Anantha Nageswaran, Chief Economic Advisor (CEA) to the Government of India, said on Monday. He further hoped that “it lasts”. He advocated for the public sector leadership to “accelerate nuclear energy to the seriousness our present pace does not necessarily fully reflect.”

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

He reasoned that nuclear power was “immune to choke points” and it provided the base load that a nation of fabs and data centres would need. Flagging a new set of problems, he said the first was resource and energy security. “Modern manufacturing, semiconductors, batteries, defence systems, runs on molecules. No molecules, no manufacturing.” The second was research and development. “If the private sector discounts the future too heavily, the public sector must be the patient investor that does not discount the future so heavily.”

Public enterprises and public resource institutions should be where frontier capability was built and then shared in energy, materials, and in process technology, he said.

Nurturing enterprises

The third was the nurturing of small and medium enterprises. “India’s strength will not come from a handful of large firms alone,” he said.

Underlining that Germany’s industrial debt rested on its Mittelstand, the CEA said thousands of mid-sized engineering firms with deep technical capability sustained by patient capital and a culture of quality. “India needs its own version of Mittelstand,” he asserted.

Observing that the defining advantage of the public sector was its ability to think and act over long horizons, Mr. Nageswaran said: “That is exactly the capacity India most needs now and most lacks elsewhere. Public sector leadership is not a relic of an old economic model. In the world we are entering, 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 advanced economies have crossed 5%. “Money that once changed yield into emerging markets now has alternatives at home. Every dollar that comes to India must clear a higher bar than before”.

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