Global Leadership Summit: Boosting women’s workforce participation key to India’s economic growth, says Hitendra Dave

Speaking at the CNBC-TV18 Global Leadership Summit, Dave identified improving education and skill development as the single biggest priority for the country.

He also highlighted the importance of increasing women’s participation in the workforce. “Far too many women not doing anything gainfully for the economy,” he said.

This is the verbatim transcript of the interview.

Q: Let’s start by talking about where we currently stand as well as what you see for India over the next 25 years. As you look at the next 25 years, what are you going to be watching for? 

Dave: The wonderful work done by the Reserve Bank of India and the government of India on the digital public infrastructure. The next 25 years should be about the digitisation of credit.

Q: How close are we to actually taking off on the digitisation of credit?

Dave: As a country and as institutions we are live with that, at HSBC we are live with it, but if what the Reserve Bank Governor said—just as they have created UPI, which is open architecture for payments—if they are making unified lending interface, it’s like the master ring, which connects you to all the databases. That has profound implications.

So, demographics, young population, happy population, digital public infrastructure and its implications for credit, the physical infrastructure, the government spending, I don’t know if people are aware that the capex spend of the government has grown at a CAGR of about 18% or 19% over the last four years. That’s remarkable. Small companies don’t manage to grow at that rate, this is the country’s capex, so it’s all for us to use. And if 25 years from now we are not close to the $13,000-$15,000 number, which defines a developed economy, many of us in this room and on the television should feel a little bad about how we misused the opportunity or lost the opportunity.

Q: Speaking about missed opportunities, as well as opportunities that we should leverage and bank on today, if I were to ask you the single biggest opportunity that, from a policy perspective, the government needs to double down on, and from an industry perspective, industry needs to double down on, what would those be?

Dave:

I don’t think it’ll get done unless we significantly increase the amount of investment we do in human capital. We have 1.4 billion people, we have the average median age of 28, 500 million people below the age of 20, but too many of them are coming out of schools, colleges, universities, even engineering, without really being fully employable. So, the number one thing, I think, as a country, we need to do is simply increase the amount of spending we are doing on our human capital.

We need better primary schools, normal schools, colleges, universities, centers of excellence. We are producing five to ten million STEM engineers, but how many of them are really doing dramatic work here? So, if there is one thing you had to choose, you would choose that. If I can add one more, we need to do much more to increase the level of women’s participation in the labour force. There’s just far too many women not doing anything gainfully for the economy. They’re running their homes or looking after their kids or their parents or whatever. I think these two things have the maximum possible implication.

Q: Let’s talk about HSBC and your own plans in India. You’ve had a long committed history here in India. Given the opportunities that you just spoke of, as well as the road ahead, how are you playing the India story from here on?

Dave: We are doubling down. I keep saying internally, we are tripling down. We have seen significant increase in our corporate customers wanting to make acquisitions abroad. Of the 1,520 acquisitions that have got done by Indian companies abroad, we’ve been part of 13 or 14 of those. We’ve banked 50% of the MNCs that have a presence in the country. We also bank 50% of the unicorns. So, we are finding opportunity everywhere and anywhere. The challenge for us is to make sure that we don’t try and do everything.

Q: The chief growth strategy officer and the CMO of Unilever said that India is the heartbeat for Unilever globally. Is HSBC India the heartbeat for HSBC globally? How relevant is India for HSBC globally?

Dave: HSBC is the world’s global bank. I know we had the tagline world’s local bank, but we really now want to operate as the world’s global bank. Any Indian wanting to go abroad, be it a company or an individual, or any individual or a company abroad which wants to come to India, we already have 50% of that market share, we are trying to figure out how to get the balance 50% or so. India is the top priority market for the group currently.

We are a fairly large group. Our contribution to the bottom line is growing at a much faster pace than the group one. At this juncture, I know our board and our executive committees when they discuss growth, ambition, what we want to be 5-15 years down the line, the number one country that comes there is India.

Q: So HSBC is banking on India?

Dave: Yes, yes. I hope India will also be banking on HSBC.

Q: But let me end by asking you about the other big change that we’ve seen. I see a lot of the young startups here in the audience, but this move from valuation to wealth creation via the IPO route has taken momentum. What’s the expectation from here on? And is that a game that you’re going to prioritise?

Dave: We bank 50% of the unicorns. We have a lending fund for startups. We are the only bank which has about a $600 million fund which is dedicated to lending only to startups. So that means we join many of these companies when they are not even on the radar of the capital market or of the investment bankers or whatever. We know their business a little better than most other people. We know the governance and the conduct and the culture and values of those organisations. Even if 50 companies fail, the one company that creates hundreds of – we saw Swiggy, some hundreds of people have become at least worth $1 million in the last two days or so. These stories inspire a lot of people.

I think it’s a wonderful thing, the fact that so many people will become millionaires, many of them will break out and start their own business thereafter. So it’s like a mushrooming of a wonderful practice. I am very happy to be part of it.