The most important thing that India needs to do is maintain fiscal discipline.

Question: What will be necessary for India to sustain the rncurrent rate of growth? 

Azim Premji: I think the mostrn important thing is we have to maintain fiscal discipline. Whether it bern in our fiscal deficit, whether it be in terms of focusing, in terms of rndevelopment, in areas which can generate scarce resources and therefore rnback inflation rates, and in terms of integrity in our leadership. 

Question:rn Is there any truth to the concept that India is a bubble? 

Azimrn Premji: Oh, that’s completely irrelevant, frankly. I wouldn’t even rnthink of it. It’s a mature democracy of 1.11 billion people. We’ve had arn tradition of successful democracy since '46, '47. We are probably one rnof the only democratic governments in the world which for more than 10 rnyears has successfully led and managed coalition governments, alliance rngovernments. Britain is facing it now and they’re panicked. Whereas we rnhave done it successfully for 10 years; three governments, and done rnit... and the job has gotten done. The job of nation building, the job rnof nation leadership in a difficult, complex coalition has worked. What rnmore maturity can you expect from a democracy? 

Question:rn As India becomes richer and salaries rise, will outsourcing still make rnfinancial sense for Western countries? 

Azim Premji: rnIt will make sense because the companies are going up the value chain. rnAnd as the international companies are trying to learn our business rnmodel, we are learning their business model probably faster than they rnare learning our business model. So cost arbitrage will always be there rnbecause the cost arbitrage is not determined by two million engineers inrn the country who are working on a job, or three million engineers in a rncountry who are working on a job. The cost arbitrage is determined by rnthe standard of living of four billion people, which is still much, muchrn lower than the rest of the developed world; much, much lower. And when rnthe developed world escalates even at 3% on salary levels a year, they rnescalate on a base of 100, where even if you escalate at 7% a year on a rnsalary level, or 10% a year on a salary level, we escalate not on a basern of 100, but we escalate on a base of somewhere between 10 and 20. You rnjust run mathematics and you will find that even at high inflation rnrates, the gap continues to be there, if not increased.