Thinks 256

Ruchir Sharma: “My highest hopes for India now lie, for the most part, outside of politics. Top of the list is the digital revolution, which by many measures is spreading faster in emerging countries like India than developed ones. China, where the digital economy now accounts for 40% of GDP, has shown how tech can lead economic development. The irony: tech giants are now so powerful, the newly confident political classes are cracking down on them from China to the US. The risk in India too is a more adverse regulatory environment kills this new golden goose of global growth. What India needs to keep in mind is that its economy is still relatively unfree, and so more than ever it should buck the global trend of more regulation and bigger government. As Singh stated in his speech back in 1991: less government means more growth. While the world is no longer in thrall to free market wonks, India would still be wise to mark those words.”

Ajay Shah: “We are in a difficult period in the Indian economy, with weaknesses in government demand, consumer demand, and private investment demand. The world economy is recovering well, reflecting strengths in fiscal capacity and vaccination. Firms in India have much to gain by prioritising the export sector, either directly by exporting or by selling to exporting firms. If we define December 2019 as the pre-pandemic month and compare this against the latest value of May 2021, Indian goods exports to the US were up by 41 per cent. There is no other element of the Indian economy where there are such gains compared with pre-pandemic conditions.”

Swaminathan Aiyar: “Apart from incomplete economic reform, the greatest hurdle is a moribund police-judicial system that gives no real justice, prevents enforcement of contract (the heart of a market system), and permits gross misuse for political vendettas. Second, apart from a few centres of excellence like IITs, the educational system produces semi-illiterate schoolboys and unemployable college graduates, so beneath a thin veneer of world-class skills India is hollow. Third, business entry has been liberalised but not exit, checking the creative destruction needed for success. Without tackling these, India will not regain 7% miracle growth.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.