‘Nepal can Become the Pilot from which India can Learn’

Dr Rajiv Kumar, former Vice Chairman of NITI Aayog of India and current Chairman of the Pahle India Foundation, delivered the keynote address at the 10th NewBiz Conclave & Business Excellence Awards 2026 held in Kathmandu on Friday, May 8.

A distinguished economist and policy expert, Dr Kumar has worked across academia, government, industry and multilateral institutions. He is a member of the Global Leadership Council in New York and also serves as a director of the Parley India Foundation. In addition, he is the Chancellor of the Gokhale Institute of Politics and Economics and chairs the Board of Governors of the Giri Institute of Development Studies.

Dr Kumar has previously held senior positions at the Asian Development Bank, the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry. He has also served on the central boards of the State Bank of India and the Reserve Bank of India.

An advocate of economic reform and public policy, Dr Kumar holds advanced degrees from University of Lucknow and the University of Oxford.

Following is the keynote address, edited slightly for clarity. You can also watch it on our youtube channel which broadcast the event live.

Ladies and gentlemen, Namaste! Good evening, everybody, all the eminent guests. It's really a privilege to be here at the 10th conference of the New Business Age.

First and foremost, I should, I think, congratulate everybody in the country for making democracy so proud by making such a big, bold, new initiative. We've all been taken aback; we've all been very pleasantly surprised. I want to wish the new government the very best of luck for reset, reform, and rise. Because that's what we need, and I'm sure with that energy that has been displayed in the last one month, this government is going to actually achieve that. So, as we treasure our democracy in India, I think it is important that the two countries treasure each other's democracies and work together as much as we can. 

Ladies and gentlemen, I just wanted to say a couple of words about the Pahle India Foundation, which is a non-profit making think-tank, policy think tank, which I had established in 2013, and it works principally with the states in India, also with the Delhi government, but very closely with the states to build capacity in the states and to suggest, not only suggest reform measures, but also to show that the reform measures once recommended are also implemented. Because I think, even here in this country — I hope I'm not being presumptive. 

By the way, this is probably my 6th or 7th visit to Kathmandu, and I've always enjoyed coming here. I was here two years ago for the infrastructure summit. 

Now, what I'm going to say is that most of the time, what needs to be done is known to the people, but it is the "how to be done" and the method of doing it, which is very often missing in our countries, both our countries. Therefore, we in Pahle India Foundation have decided to call ourselves an action tank, not just a policy think tank, because we want to not just recommend policies, but also to see them in execution. We also have offices in five states, and it'll be great for us to observe what happens now in Nepal and see how we're doing. 

The first thing that I wanted to sort of emphasise was that India and Nepal have a civilizational connect. It goes back centuries; it goes back millennia. You talk about Ayodhya, you talk about Janakpur, we mention Lumbini, the same we talk about Kushinagar, we talk about the Valmiki Ashram. There is such a continuum here that I think one should understand, that this is a relationship which has been built over centuries, and I'm sure we'll continue over centuries, and I think that's the way we should look at it, in the people-to-people context.

I've always thought about any relationship between two countries as government-to-government, business-to-business, and people-to-people. And we have to make sure that all three strands of this relationship become as trusting, as important, and as strong as they can be. But, not just culturally, not historically: the two countries are also tied together very strongly ecologically. We share the same environment, problems, context, everything. The Himalayas, which crown us both, are today being threatened by what is called the Asian Brown Cloud, which was talked about in the early 2000s. 

There's a three-kilometer-thick brown cloud over the Himalayas, which has been captured by the satellite. And what it does is that it attracts carbon from the atmosphere and deposits it on the snow peaks of the Himalayas, the snow peaks which are the life-giving force to both countries. And that means that our snow peaks no longer hold the same, they attract more heat, and therefore the glaciers are retreating, and I know that there's a fact for India that something like four meters a year, that's what's happening. So, ecologically also, we are tied at the hip. Therefore, we have to work together. So our culture demands that we work together. Our ecology demands that we work together. 

The third factor that we have is that both of us are in the midst of a youth bulge. We have a demographic window which will last shorter for India, but longer for Nepal. But it's not going to last forever. Our median age is 28 years; Nepal's is 25.7 years, and your working age to total population is now at its peak, which is, you know, 48% or so. But, we know that our demographic structure is going to change after 2035 because the ratio of workers to dependents (dependents meaning seniors and children) is going to start changing at that time. Therefore we have a short window, both countries, in which we have to build our skills, make sure that our youth is usefully employed, and their exploding aspirations are met somehow. We have received the largest remittances in the world this year, for $140 billion; your remittances account for more than 25% of the GDP. But that's not the way forward. The way forward is to make sure that this skill, this demographic window is fully exploited, and that we convert our surplus skills into talent which is used, you know, for the country, for both countries. 

The third factor which is common is our youth, our demographic window, and the fact that both the climate window and the demographic window is not going to last forever, and if we have a 10-to-15-year period in which to exploit this. 

I published a book in 2023 titled "Everything All At Once." I co-authored it with Ishan Joshi. There, we point out that the world today is undergoing six simultaneous global transitions. 

Thomas Friedman said the world is flat. We know that it's no longer flat; it's got full of valleys and precipices. Fukuyama said it's the end of history, but Donald Trump has proven that history has just begun; it's no more the end of history. And we therefore say that the six transitions are going on at the moment, at the same time (and this is probably the first time ever in world history that you have such a situation). Our geopolitics, what's happening to Pax Americana, the geo-economic, what's happening to all the institutions that were put up after the Second World War. 

The third is the rise of Asia. Today, Asia is reviving its share in the global economy, with the rise of China and India, and the ASEAN countries and Japan. Therefore, the center of gravity is shifting from trans-Atlantic back to Asia as it was before 1850. 

The fourth is the rise of the global South, where the countries in the region today combinedly provide a greater share of global growth than the OECD countries.

Fifth, as we all know, is climate change, which is an existential problem. Whether some people admit it or not, for us in South Asia, we know that this is happening. We can observe climate change and its effects on our agriculture, on our urban life, et cetera. 

The sixth, the final one, of course, is the Artificial Intelligence that we talked about so much and which is the fifth technological transition. 

All these six are happening at the same time, and we in India and in Nepal have to face this together. And you know what? For the first time in world history, two countries have to grow their growth rate exponentially because we both want to be raising our per capita incomes from wherever we are. We want to be $100 billion. We want to be a “Viksit Bharat.” So, we have to grow our per capita income exponentially and, at the same time, reduce our carbon footprint. And, also make sure that we do it equitably; that we do it not in a manner where income inequality increases, where people are left behind and some rise, but we do it all together. This has never been done before. This has never been achieved before. Everywhere, these transitions were sequential: political, economic, climate, you know, retrofitting, et cetera. 

I lived in England in Oxford for five years, and I know how they recovered the river Thames, where it was said that after the Second World War, if you put your hand in, only half the hand came out, and now they have salmon growing there, trout going there. But the fact is that we don't have that choice. We don't have the choice of the Tokyo Bay, which is full of Mercury, and they recovered it, and the Aral Sea near Uzbekistan, where the Southern half of the sea has completely dried up, and the winds go around killing. We don't have that choice because if we allow ecology to go out of hand today, if we cross that catastrophic limit, it's an existential threat for us. So we have to do it together. 

And, therefore, with that, and I repeat, exponential growth is required. Six percent, seven percent, we in India, are talking now about that 6 and 1/2 is not enough. We have to grow at 8, you know, and therefore, surely 3 and 1/2 and 4 is not enough for any country in South Asia. So you have to grow at that rate and yet, at the same time, do it in a manner that the carbon footprint comes down. So, therefore, what we say in our book is that the bottom line is that business as usual will not do. We just have to remember that and change that completely. And I'm so happy, therefore, to see what's happening in the past one month in Nepal because I think that's the motto that this government has adopted: that business as usual will not do; we need what I call an intellectual “Sagar Manthan”, the kind of churning that we required in our traditional scriptures talked about. And what was Sagar Manthan then? It was a churning of intellectual wisdom from which you brought out some of the nuggets which then became the sort of key factors for all this, for the whole region. This bottom-up, this business, refusal to accept business as usual, refusal to accept every model that has been inherited down to us from wherever and think on our feet and to encourage innovation, to encourage R&D, to encourage, you know, and to admit that we've got to start working to transform the ground realities in our countries. That's the way we have to work today because today's conditions are just completely different.

Let me just give you an example which concerns both of us. We've followed an example of jobs – people moving to jobs. That's the model that we've followed, and that's the model that has been followed since maybe the 17th century or the 18th century, where people from Ireland moved to, you know, the US, or from Europe moved to the US, et cetera, or otherwise. And we've taken migration for granted. But to me migration for jobs is not the answer. 

I was very thrilled to hear and see the hydropower development. It's not just electricity. It will bring jobs to the people in those countryside.  Hydropower is one source of growth, but not just infrastructure, not just energy, not just green energy, but also changing the model of how you want to achieve growth. 

One more example because I am passionate about that and I am sure you like that as well: how do we handle our agriculture? So far we have done our green revolution, which is a chemical-based revolution, and we know that in India, we have come to the end of that road. 1 kg of fertilizer used to give us 12 kgs of extra foodgrain. Today it gives only five. So that we use more and more chemical fertilizer in the soil, and therefore, what we get is less and less output. As a result, what's happening is that today we use much more ground water than we can afford; our ground water is getting completely exploited, but more importantly, the condition of our soil has become so bad that the organic carbon content today is less than 0.4%, when 1.5% is required to keep the land arable. And I'm sure the same situation is happening in Nepal. So we need to think differently about agriculture. 

Therefore, the onus of my talk today is that let both countries— let us together — think together innovatively on how to create a new model of development for all of us.

Here, because your scale is so manageable. We are so huge, we are so diverse, we are such a large continent-economy that even if we want to, we can't do it with any urgency and speed. Nepal can become the laboratory. Nepal can become the pilot from which India can learn, and I think that's the way it should be: that you can try thinking differently, you can try developing new models, you can try thinking innovatively, and what you do, we can look at with a reason to try and replicate and scale it in our country in different parts. So I think that's the transformation that we need also in the relationship between the two countries. 

Therefore, because I'm an economist, I can't end without making some suggestions — some of what we can do. There are seven suggestions that I want to make because I also follow the good old Kundalini Shastra, which are seven chakras, and therefore seven is a good number for all of us. 

So let me start first about the green energy transition. And that is already what we are talking about. You are exporting $130 million which started in 2024/25, this can be scaled 10x for the near future. 10x is the minimum, and that will give us the base load that we need, which we can't get through solar and wind, and nuclear will take time. So that's the green energy transformation that, and along with the green transition, the other two are green urbanization and green transport. This is a must for us. There's no other way out for both countries, otherwise life will become unlivable because of the air quality, because of the congestion, etc.. So, that's the green transition. 

The second one is chemical-free farming, zero-chemical farming. Let's do our research together on collecting the evidence of whether chemical-free farming is viable or not, and whether it will provide nutritional security. I don't say food security, but nutritional security, because otherwise the chemical-laden food is probably not nutritional. Nutritional security, along with ecological security and public health, is essential so that the farmers' and the consumers' health is also protected. So, the second suggestion is for chemical-free farming. 

The third one – and this our Prime Minister is very keen on – he has talked about it, and it's about how to eliminate if you like, or, if not, minimize the license and compliance burden on the private sector. In other words, how to promote private sector growth? Therefore, how to achieve policy certainty, which was talked about. 

In India, we have already enumerated that we have 62,000 compliance requirements, and we are going state by state to make lists of those and asking, "How can we reduce them?" 1,200 of them, we've already thrown out of statute books. We've recently passed another bill which has decriminalized a large number of these. I think the time is right to do the same here for Nepal because believe me it is the private sector which will promote growth for South Asia, and it has done it for centuries. When South Asia had more than 25% of the world's GDP, that was the private sector-led.

Let all of us try to read William Dalrymple's book, “The Golden Road”, to find the codes, to find the sources for that. 

The fourth one that I wanted to talk about is that we need to, as proposed by Francois Bourguignon, the chief economist of the World Bank, start measuring the per capita income growth of the last decile of our population, and not just the average GDP; focus on the last decile of the population, because that is what will ensure equity and equitable growth. That's the important one.

The other point that I wanted to talk about is that we need to restore accountability of governance. So, we need some way – and this is what we did in NITI Aayog to a good effect for some time – which is that we need to have outcome-based performance evaluation, not only for the private sector, or for the corporate sector, but for the government sector as well. And therefore, that's another point, and I think once you do that, it'll bring a new energy. It'll bring about a new synergy going forward. 

And the last point is that everywhere that you look in the world, countries have progressed when the four principal stakeholders work on the basis of mutual trust. Those four principal stakeholders are the government, the business, the academia, and the civil society. These four principal stakeholders have to work on the basis of mutual trust. In South Asia, unfortunately, there is only mistrust among the four stakeholders, and that will not do. 

Therefore, what we are doing in Pahle India Foundation, and it's being now admitted in several states is that we are going down to the district level to say that that might be the unit that might be the place where you can create a platform where all the four can come together and talk to each other about how they will serve the national interest. What can they do to serve the national interest and become accountable to each other? Because if that happens, and that again brings me back to what I said earlier, is that will also be an instrument of changing, of transforming the ground realities in our countries because that's the important one, and that will also be the basis to start counting, start measuring the per capita income growth of the last decile of the population, which is called "Antyodaya" in our countries and should be the same here. 

These seven suggestions I make in all humility, if you like, but these are some things that we are learning in India.

By the way, there is one more, which I forgot, and which is the digital public infrastructure. I heard a lot about it. We have actually done it. The India stack is a good model to follow. That should be done: the UPI, 20 billion transactions a month now in India, the health stack, and the education stack. I think all these put together would make sure that you will reset, reform, and rise, and I wish you all the very best for this process. 

Thank you very much.