India’s Economic Future – Gujarat a South Korea & Maharashtra a Germany?

That India is a model for Europe is clear and well-understood. India has as many languages and ethnic groups as Europe; India has a religious & cultural identity just as Europe has; the various Indian states have been regional kingdoms just like European states; the boundaries of India are as clear as Europe’s. But India has been fused into a real union many times while Europe is still trying desperately for its first union. 

But what about the economic story? Today Europe and America are about 21-22% of global GDP. Well, people forget that India was about 21% of global GDP in the early 18th century, just before the British East India Company began acquiring Indian kingdoms one by one. That India seems so far away today.

Not quite. Many economists believe that India will become one of the three largest economies in the world in the 2040s. We think the way India gets there is for each Indian state to be as large an economy as that of another prosperous country. For example, Gujarat plans to become as big as South Korea, a similar region. This ambition was discussed by Stratfor’s Robert Kaplan in his book “Monsoon”, including the vision to “make Gujarat an Indian Ocean economic nerve center“.

Gujarat is on its way. The other Indian states do not have governments so dedicated to economic development. Take Maharashtra, for example. It has no economic vision or ambition despite being the most developed state in India. Perhaps because of its culture – a martial aggressive spirit, a disrespect for charm, a contempt for the soft touch, and a preference to speak with machines rather than people. But wait a minute. Aren’t these German characteristics as well?

So why can’t Maharashtra employ the German model? The model of training youth for tradesman-type jobs, or for specific jobs in specific industries in the private sector without demanding college education. We discussed this in an inflight conversation with a German
manager who runs the
engineering operations of a ball bearings company in Aurangabad. 

This type of training is exceedingly important for all of India. The celebrated Indian techie or engineering student forms just a slice of India’s vast reservoir of young workers. The majority of Indian workers do not have the opportunity, the aptitude or the family background to allow them a jump into technology or science careers. These are the youth that India needs to provide jobs to. Unfortunately, the state or its agencies simply don’t have the vision, the will or the ability to do so.

Fortunately, India has incredibly innovative people who are already building such programs, successful programs. Luckily for us, we visited such a program when our flight landed in Aurangabad. What we found holds promise for all of Maharashtra and all of India.

We found a program, a center that actively recruits young men & women from very poor backgrounds in rural Maharashtra, some from remote forest areas. Their only requirement is 8th grade school education. The PACE center trains these young men and women for 3 months for the rapidly growing hospitality industry. The students reside in the PACE center and get trained for jobs in Food & Beverages and Housekeeping, they also go through Bakery courses Delhi.

If this sounds easy, it is not or it won’t be without the innovative process of PACE. Remember almost all students come from rural areas, most of them without a high school education. They come into PACE with hardly any grooming, hardly any sense of urban etiquette and hardly any ability in English. PACE teaches them dignity, self respect, pride in their appearance and the most difficult arts for a Maharashtrian, courtesy & politeness. PACE then provides them training in a hands-on manner. The students are the chefs, the restaurant staff & housekeeping staff in a small guest house run by PACE on their campus. The expertise & training materials are from Taj Hotels, India’s famed luxury hotel group.

We stayed at the PACE guest house for 3 days. Our experience was deeply satisfying. The food was very nice, the service excellent, the room spotlessly clean, the housekeeping staff prompt and fast. Even more rewarding were the smiles and professionalism of these students. We spent time attending classes, speaking with students and conversing with teachers, some of them earlier graduates who have come back to teach in a sort of Top Gun system.

Words cannot describe what we mean and so we encourage all to view the 3-minute video below. You will meet two PACE students, you will see what background they come from and you will marvel at their growth in merely 90 days. Both the students in the clip below have jobs with first tier hotel groups in India. This case study is now used by PACE in their presentation in villages and far flung communities.


PACE does a superb job of placing their students in hotels all over India. PACE has a 100% job placement record. But PACE doesn’t stop with placement. PACE monitors and supports the students for one full year after their placement to minimize dropouts. How many top-ranked Universities even think about students after they leave the campus?

What does PACE stand for? The P stands for Pratham, the absolute best and most successful NGO in the world, and A stands for Arora for the Indian-American businessman who funded this center. So PACE is Pratham Arora Centre for Education. PACE Aurangabad is so successful that they are now building a 5-start hotel on their campus to train students for a higher class of jobs in the Hospitality Sector.

The PACE model is now being implemented in other cities and applied to other labor-based industries like construction. Watch the video below of a PACE centre in partnership with Larsen & Toubro, a leading Indian company. At this construction PACE center, they accept students with just a 4th-grade education. This is exactly what India needs, a training program for poor Indian youth with minimal education, one that prepares them and gets them jobs in a growing industry. 


Neither PACE center has anything to do with either the State Government or the Central Government. They are a partnership of PACE and Indian private sector companies like Taj Hotels & Larsen & Toubro. And PACE itself is a joint venture of the NGO Pratham and an extraordinarily generous Indian-American named Arora. 

We cannot describe the sheer pleasure we had in spending time with the young men & women, their instructors and administrators at PACE Aurangabad. We are so proud of what we saw that we now carry the PACE bag that every student gets. And we carry this
PACE bag proudly to our meetings in New York rather than traditional rich leather
briefcases that New Yorkers prefer. It not only keeps us in touch with our core
but it also helps us tell India’s micro story that we so fervently
believe in.


If you want to know how Maharashtra can eventually become another Germany and how India can eventually rival Europe, visit PACE Aurangabad or some of the other PACE centers in India. The experience will make you so bullish about India’s micro story that you will cease to worry about today’s depressing state of India’s macro.

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