May 25th 2024.
According to Sridhar Vembu, the CEO of Zoho, economic development in India should not only be focused on major cities, but also at the district level. In his view, each district should have its own "economic engine" that can contribute to the overall growth of the region.
As an "experimental economist", Vembu believes that this economic engine can take various forms, whether it be a city or a district. The key is to identify what the region can offer to the rest of the world, in order to balance out the imports from other countries. This "stuff" that is sold from the region is what he refers to as the economic engine.
Vembu further explains that the success of a region can be measured by the value added per person by this economic engine. This includes not only labor income, but also profits paid to individuals in the region. Therefore, a high value added per person indicates a prosperous region.
Using Zoho as an example, Vembu mentions that their company adds a value of $100 million to the Tenkasi region in Tamil Nadu each year. With a population of 1.4 million, this translates to a contribution of $70 per person at the district level. He believes that this model should be replicated in all 800+ districts in India, as it is the key to balanced regional development.
Vembu also highlights the potential for rural districts to achieve prosperity by focusing on their economic engines. Even an economic value of $1,000 per capita from exports can make a significant impact. He stresses that this should be the measure of success for a region, as it reflects the value added per person by what is exported to the outside world.
In conclusion, Vembu believes that every district in India has the potential to become an economic engine and contribute to the overall development of the country. It is through these engines that balanced regional growth can be achieved, ultimately leading to a prosperous India.
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