Convocation Address by Sh. YASHWANT SINHA, Hon'ble Union Finance Minister, Govt. Of India on 27^th July,1999

International competition has become a fact of life for Indian industry today, and industry must live in this environment. In the process of being internationally competitive and being able to face international competition is the need of the hour. The key aspects of this process are :

• Benchmarking against the best global companies.
• Making the organisation more responsive, lean and competitive.
• Employing the best talent.
• Divesting from business which was not adding value. The motto should be “fewer things better”.

Today’s entrepreneur must understand the new rules governing competition. In this dynamic economic situation, the attractiveness of respective enterprises and countries will depend on their ability to adapt quickly through constant innovation. Internet technologies and outsourcing are two trends that are driving innovations today.

Today’s entrepreneur must realize that application of internet technology can greatly facilitate implementation of management techniques such as “just-in time” inventory management and other working capital management techniques, making the operation of an enterprise more cost-effective. The internet has also provided alternatives for advertising and the operations of business, and can be expected to evolve into a full-scale computer-operated business environment. And this is available in the English medium in which we have a comparative advantage.

Outsourcing involves provision of services and the manufacturing of components in companies outside the factory location and then assembling them in the principal’s factory. In its extreme form, the so-called virtual factory system has made it possible to manufacture any product at any time in any factory worldwide, with all the engineering specifications and invoices being transmitted electronically. A typical network includes not only a parent firm and its affiliates, but also its suppliers and sub-contractors, its distribution channels and value-added retailers, as well as its research and development alliances and a variety of cooperative arrangements (such as standards consortia).

Covering the major forces shaping our economic environment, let me explain how policies have been designed to help Indian entrepreneurs and business.

In the Budget for 1999-2000, I have emphasized the need for higher investment in venture capital activities for boosting hi-technology sectors and supporting entrepreneurs. Various initiatives have been taken to increase the attractiveness of the venture capital scheme so as to induce high net-worth investors to commit their funds to the sunrise sectors, particularly the information technology sector.

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