The Economic Times, December 12, 2023

India is experiencing a demographic dividend and will continue to do so for a long time, according to Dr Ajit Ranade, Vice Chancellor, Gokhale Institute for Politics and Economics, Pune

He was speaking at the 5th CUTS 40th Anniversary Event held in the Symbiosis School of Economics in Pune on Monday. The event was titled ‘What Would it Take India to Realise its Potential Growth?’

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.

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.

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”.

Dr Ranade 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.

CUTS Secretary General 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.

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.

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.

This was the 5th CUTS 40th Anniversary event organised as part of its celebrations globally. 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.

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