December 11, 2023

“India with an ambition of becoming a $5tn economy is already a 5-crore economy with 5-crore cases pending in our courts” said Dr Ajit Ranade, Vice Chancellor, Gokhale Institute for Politics and Economics, Pune. “Judicial delays are a bane in our economy”.Dr Ranade was speaking at the 5th CUTS 40th Anniversary Event held in the Symbiosis School of Economics in Pune on Monday 11th December. The topic: What Would it Take India to Realise its Potential Growth?

“Indeed, the judicial delays are a big handicap for businesses to run their business smoothly, and to citizens in resolving their disputes. At the least, our courts should get out of the colonial system of vacation closures and work like any other institution and clear the backlog asap”, said Mr Pradeep S. Mehta, Secretary General of CUTS International, who was moderating the event. “This call has been made by many senior leaders, including Narendra Modi, the Prime Minister of India, but the judiciary is not listening”.

As the Chair of the event, Dr Vijay Kelkar emphasised on the idea that India needs to adopt a universal approach and not just a narrow outlook on the economic front. There should be openness to competition and global markets for the economy to achieve its potential growth.

This was the 5th CUTS 40th Anniversary event organised as part of its celebrations around the world. Until now, four such events have been organised: 1) Battling the Headwinds: Challenges and Opportunities for the WTO with Dr. Ngozi Okonjo-Iweala, Director-General, WTO in Geneva on 6th April 2023; 2) Challenges before G20 with Amitabh Kant, G20 India Sherpa and Harsh V. Shringla, Chief Coordinator, G20 India in New Delhi on 28th May 2023; 3) Building the Momentum Towards AfCFTA: Overcoming Implementation Challenges with Wamkele Mene, SG, AfCFTA Secretariat, in Accra on 15th August, 2023; and 4) India’s Economic Progress in the Current Global Economic Landscape with Nagesh Kumar, Director, ISID and Rajat Kathuria, Dean, Nader School of Economics  in New Delhi on 9th October 2023. Few more are in the pipeline: Canberra on 30th January and so on.

Delivering the welcome remarks Dr Jyoti Chandiramani, Dean of Symbiosis School of Economics painted the macro picture of the Indian economy and provided an optimistic view for high potential growth. She further set forth the floor for discussion by raising some crucial questions on the type of consumption (whether frugal, or productive), and the existing divergence in the economy.

In his speech Dr. Ranade spoke about the high growth potential of India and the imperative of such growth to be high, sustainable and inclusive economic growth. One interesting fact stated by him was that while there is 1% aggregate population growth in India, there is 2% growth in the working force. This symbolically represents that India is experiencing a demographic dividend and will continue to do so for a long time.

The necessity is to capture the untapped potential through well implemented policies. To achieve sustained high growth India needs to adopt an all-round approach and work on many factors, which include infrastructure, education (quality, access and skill development), healthcare, investment in tech and innovation, financial sector, foreign policy, environment and access to global markets. He said, “We can’t pull up ourselves without our bootstraps”.

He further added that to increase investment spending, we need to increase private investment spending. The key determining factors for private investment spending are stability, predictability and continuity.

Dispute settlement is a crucial aspect, and India ranks fairly low in it vis-à-vis other countries. Labour laws need to be reformed. There needs to be a shift from software services and remittances as it reflects the export of human capital. He stressed that agriculture is the most shackled sector and hence needs reforms.

He suggested for all the reforms, we require institutional reforms and better frameworks by removing inspector raj and compliance burdens.  Reforms are also needed in terms of ease of doing, ease of running, and ease of closing a business.

In response, Mr Mehta briefly touched upon the important factor of production, which is land availability, which hinders the growth of manufacturing industries. Considering the lack of systematic approach in policy implementation, he suggested that Economic Governance be recognised as the fourth factor of production. “This is the glue for all governance activities”.

Dr Chandiramani welcomed the proposal and said that indeed the production factors have to be expanded to cover technology also. She agreed to propagate the idea across the academic world.

Countering the western narrative on sustainable development, Mehta regarded equity and economy as two other essential parts of the triangle and not just the environment. He said that we also need to understand the difference between growing sustainably and sustainable growth.

“There is much confusion on this in the world. We can grown sustainably by pursuing pure economic reforms, but it may not assist sustainable development”, he said. “For green growth, we need to be conscious of the impact of policies and how they can be managed to ensure that the growth is environmentally benign”.

He also proposed that India needs to build up a narrative that export of labour should be considered on a trade visa and not an immigration visa.

The discussion was followed by questions from a highly deliberative audience which consisted of questions from varied sectors. From income inequality to climate and sustainability to environment-related issues, which were well received and addressed by the expert panel.

In response to a question from the audience, Mehta stated that agriculture is the most significant intrusion for the environment to meet with our food needs. Recognising this fact, we have to seek a balance between environment and development rather than condemn all development activities as anti-environment. “Livelihoods also need to be balanced with environment”, asserted Mehta.

In his concluding remarks,  Dr Kelkar, flagged the need for paying attention to the binding constraints on policy as the way forward for reforms. There is a need to avoid sectoral and regional bias to ensure economic growth. On the question of environmental degradation, he pressed upon the importance of time and utilising the full potential to achieve high and sustainable inclusive growth. In this regard, he said that “some changes are reversible, but many things are not, such as time which is not reversible”, so now is the time to act at all costs.

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