A Short Speech

The rise of India as a significant economic powerhouse on the world stage is unquestionable. The drivers of this rise have been diverse- ranging from a burgeoning middle class with increased buying powers, to a growing services sector with impressive innovation and vision. More recently niche successes in manufacturing have added to the momentum.

There are few who doubt that India will continue to grow at rates that would be envied by economies in the West for the near foreseeable future. However, it is also clear that India stands at a crossroads, where policymakers will have to separate theory from practice. It is certainly comfortable for us to assume for instance, that the inflationary trends prevalent in the economy can be curbed by monetary tightening alone or that the discrepancies and inconsistencies in our macro economic data do not have direct bearing upon the effectiveness of policy.

Friends, these would be dangerous assumptions to make – and would parallel the unfounded assumptions that are made with regard to our prospering financial markets - which have shrugged off the demons of the global financial crisis, and become veritable havens for capital inflows. Looking at the ground realities today, it becomes increasingly clear that capital inflows are as fickle as they come, and we severely lack serious capital control measures which could ensure that the money flowing in is here to stay, rather than return in haste with quick gains.  

Our economy needs to offer a secure environment for investments – that are sustainable and long term. To do this it is important to engage the investors and regulators, government and business in an inclusive dialogue. This dialogue must capture the subtle differences in perceptions - of the existing economic environment, and seek to align views and streamline solutions. The evolving trajectory of India’s economic growth will be determined by policymakers and the business community alike. This is the reason we have gathered here today, to discuss and debate some of the critical components of India’s economy.

The nature of debate and discourse on economic policymaking amongst the academic and policymaking community in the country more often than not tends to be a conversation that few others are included in. Given that India is looking towards the markets for growth, it is imperative that all the relevant stakeholders are included in such interactions. The practical insights and cumulative experiences of the business community in the country must be tapped, as a valuable and non substitutable resource.