The Economic Times, October 12, 2023
“We began out of a garage, and today we have a global footprint”, said Pradeep S Mehta, Secretary General, CUTS International at a panel discussion on “India’s Economic Progress in the Current Global Economic Landscape”. This was organised as a part of the CUTS 40th Anniversary Programme, marked the latest in a series of events being organised by CUTS International across the world to commemorate its 40th anniversary this year (1983-2023).
During the interaction moderated by Mehta in New Delhi, panellists took stock of the transformation of the Indian economy over the past four decades, in the backdrop of the recently concluded G20 summit, along with its future prospects and challenges.
Mehta briefly introduced CUTS, describing its origins as a consumer organisation and the subsequent expansion of its work programme into areas of trade, regulation and governance working out of Washington DC, Geneva, New Delhi, Accra, Lusaka, Nairobi and Hanoi. Mehta traced the evolution of CUTS as a global NGO with a unique consumer-centric approach towards both public policy and grassroot issues.
Congratulating CUTS on its 40th anniversary, Rajat Kathuria,Professor, Economics, Shiv Nadar University, observed that it was a remarkable achievement for an institution to survive, sustain and contribute to policymaking for so long, keeping consumers at the centre throughout.
Kathuria noted that “Indian economic policy always centred on producer interests. It was CUTS which brought consumer concerns to the forefront.”
The hour-long discussion touched upon diverse aspects of India’s economic rise and the state of the global economy, as well as the re-emergence of industrial policy around the world, and the technological revolution underway globally.
Discussing the implications of the successful G20 Summit, Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development (ISID), recounted that the smooth passage of a G20 Leaders’ Declaration itself marked a huge success, coming as it did on the back of repeated meetings where consensus had eluded the grouping.
Kumar also hailed the G20 for recommitting the world to attainment of the SDGs, which would help in moving the development agenda forward. He noted that showcasing India’s achievements in digital public infrastructure (DPI), developing a consensus on the need for reform of multilateral development banks (MDBs) and committing to the integrationof MSMEs with Global Value Chains (GVCs) were all positive steps, which showed how successful the Indian G20 Presidency had been.
On the Summit’s longer-term geopolitical implications, Kumar opined that, “The admission of the African Union (AU) as a full G20 member will be a defining legacy of the Indian G20 Presidency. It makes the G20 more inclusive as a forum.”He stated that this was only the latest illustration of India’s unwavering commitment to the Global South.
However, the panellists also cautioned that the recent outbreak of serious hostilities in West Asia threatened to derail initiatives like the India-Middle East-Europe Economic Corridor (IMEC).
In his analysis of India’s economic trajectory, Kathuria stated that India embraced markets a little too late, and that governmental intervention continued for far too long. He pointed out that once any regulatory intervention was in place, it became a very difficult task for any government to undo it, and it ultimately took a crisis (such as the economic events in India leading up to 1991) to dislodge the vested interests created by the regulations. He also noted that the challenge in India has been more about implementing policy efficiently, rather than good policy design.
Kathuria opined that going forward, the government needed to be more of a facilitator of economic activity, rather than itself being a player. “The role of government will gradually change to facilitation and governance, rather than provisioning”, he stated.
The panellists agreed on the potential of markets to work for everybody. They affirmed the need to repose trust in markets, liberalise them, and alongside create a robust institutional framework to handle cases of market failure. Deep reservations were expressed on recent tendencies to go back to a licensing model.
There was also unanimous agreement on the point that the world was witnessing a return to industrial policy, and that this was a trend which was here to stay. Kumar remarked that the “New Washington Consensus refers to industrial policy, no longer to liberalisation.” The shift from globalisation towards what economist Dani Rodrik has termed the “productivism paradigm” was also discussed.
This news item can also be viewed at: