Business Today’s Post

Name: India Will Be An Economy Rubbing Shoulders With The Largest Economies By 2047
Uploaded: 2024-08-21T08:00:07.304Z
Duration: 6 min 54 s
Channel: Business Today

Business Today

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In a conversation with Business Today TV at BT@100, the former Chief Economic Advisor and current Executive Director to the IMF, Krishnamurthy Subramanian discusses the challenges India will face leading up to its 100th year in 2047. He shares, "If we can grow at 8%, we will be an economy rubbing shoulders with the largest economies by our 100th year." He also adds that China and Japan grew their GDP by more than 20 times despite facing tough geopolitical conditions like the Vietnam War and the oil shock. Therefore, with sound policies, India is capable of achieving a $55 trillion economy by 2047. Watch: https://lnkd.in/ezfYNxDi | #BTIndia2024 #BTIndiaAt100 #AdaniGroup #IndiaAt100 #IndiaAt100Summit #IMF Adani Group | NABARD - National Bank for Agriculture and Rural Development | Solar Energy Corporation of India Limited | Skill India Digital Hub | Karishma Asoodani

Transcript

Joining me is Mr. Krishnamurthy Subramanian, Executive Director, IMF. Thank you, Sir. We are at BT at 100 and talking about India at 100, which is your recent release. You've pegged to target of $55 trillion of GDP by 2047. Do you see challenges on that way, especially in the geopolitical front? So let me give you the example of a couple of countries that grew similarly. Japan from 1970 to 1995 grew its GDP more than 25 times, from $215 billion to about 5 1/2 trillion. And China from 1996 to 2021 grew its GDP by about 20-2 times. Now, if you look at both these episodes, it wasn't necessarily a honeymoon period for the for them or for the economy itself. I mean, during the. Japanese growth, there was a Vietnamese war, there was, you know, the oil shock and therefore the hyperinflation, the bulk of phenomenon. So there will be challenges, of course, but I think what is important is if, you know, India can implement good policies like we've done over the last 10 years, doubled down on them, then we certainly can grow at 8%. There is enough potential for us to be able to grow at 8%. And thereby if you do that, then we will be a $55 trillion economy by the time we turn 100. And how do you see the role of jobs in employment playing in this to reach this GDP growth level, especially after all the budget announcements? I know it's been a stepping stone, but how far can we go? It's a very important aspect in the economic strategy that I've laid down for India at Hundred, there are four pillars, of which this is 1 crucial pillar. The other pillars are so just to name them. The first pillar is focused on growth at the macroeconomic level. 2nd is social and economic inclusion of IT. Jobs and agrarian renaissance are very important elements. The third is wealth creation and ethical wealth creation. And 4th is virtuous cycle driven by private investment. So in this, the second pillar, as I said, is, you know, jobs are really critical because jobs enable economic inclusion, but also crucially, they also further social inclusion. If you would recall, you know, I think it's this is true for each one of us. We remember the day. And we got our first job. It's so important in all our lives. And so for our young population to be able to become socially and economically included, jobs are going to be really critical. And therefore, in the book, I devote an extensive amount of, you know, real estate in talking about jobs and especially the manufacturing sector, because manufacturing sector growth is really critical for our youth to be able to get jobs, you know, and jobs provide stable income, which also then you know. For the consumption and at at at at the same time, you know, it's also important to understand that as our economy will grow, you will have a large middle class getting created and this large middle class will demand, you know, all kinds of consumables, whether it's actually a television or a phone or a refrigerator, a car, etcetera. And if you don't manufacture them here in India, then will they will have to be important, which will have an impact on the trade deficit, the current account deficit and the external sector. So For these reasons as well the manufacturing. Sector growth is really critical, but from the perspective of, you know, of, of social and economic inclusion, jobs is important and thereby manufacturing. Mr. Subramanian, you've also been the chief economic adviser. I'm going to try and draw your comment on this. The current ECHO survey talks about a different vision with the China plus one strategy. It's somewhere echoes the voice that says it's important if India and China could get together in a way that, you know, we, we don't just act as an alternative, but as a medium. Do you agree this collaboration with China? So overall, when we think about, you know, economics, I think economics also has to be thought within the space of the geopolitical landscape and, and therefore this, you know, is an idea that needs to be thought through and, you know, all the different aspects and the facets I'm sure will be considered. I would like to think that it is important for us to. Not only look at the economics, but also some of the geopolitical aspects in this when we, you know, think more about this. So would you agree that it's a long time for us to try and compete with China? See, the way I look at it, you know, if we can grow at 8%, we will be an economy that is rubbing shoulders with the largest economies in the world. By the time we are, you know, we are 100. So my emphasis would be that we put our heads down, you know, implement good economic policies and grow at 8%. The rest of it will take, you know, take care of itself. One last question just on that 8% growth, something that we're optimistic about also about our future growth. Pertaining to what? Have come for the numbers for the last fiscal. Do you think inflation is completely gone? Is it's no more a challenge for us? I don't think, you know, with any macro variable you can ever say that, you know, it's never going to be a challenge. I'm reminded of, you know, before the global financial crisis, you know, some of the famous macro economists had, you know, had had mentioned that recessions are actually are over and that, you know, we've found a way to avoid that. So and, you know, such words then came back to bite them. So we have to be careful never, ever to declare victory on these, you know, variables, some amount of, you know, paranoia. And this I think is good from a, you know, it keeps us alert to the post prospects of but I think the implementation of the inflation targeting regime has certainly helped in reducing inflation. If you look at the data and I've covered this in the book, pre 2016, the inflation you know, average on average was a close to 7 1/2% and now 5%. So I think that is an aspect that has has is has clearly helped. And overall, I think again, during the COVID period, the fact that. Fiscal policy was very responsible also held in ensuring that, you know, during a period where the rest of the world was having anywhere between 2 1/2 to four times historical average inflation, our inflation was less than historical average. So there's, there's been a lot of good work that's been done on this. But I would always actually urge caution, you know, on, on macroeconomic. I don't think we should drop our guard. Thank you very much, Sir, for speaking with us. My pleasure.

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India Will Be An Economy Rubbing Shoulders With The Largest Economies By 2047

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