We Should let India Grow at its own Pace Says Finance Secretary TV Somanathan
The union finance secretary TV Somanathan addressed the G Ramachandran Endowment Lecture on Saturday to talk about the country’s expected growth. He was called as a guest at the Madras School of Economics, where he talked about “Development in changing times: The role of government efficiency”. He said there’s absolutely no need for panic if India does not grow at a particular targeted growth rate. He added that India has a nano-demographic window to achieve the status of a developed country, and if it misses, it may not reach the expected growth rate.
During the address, Somanathan cautioned that if India fails to achieve the targeted growth in the first quarter of the century, the country might be doomed to mediocrity forever. He explained that there are two widely held views about India in the next two quarters of the century, where the country is expected to grow at a rate of 8-8.5% to get the status of a developed country. And, if by any chance the country misses achieving the set target in this quarter of the century with demographic dividend, it might never be able to reach the desired status.
In the next 25 years, India is expected to grow at a compounded rate of 7-7.5%, but if it doesn’t grows at this rate, there’s still no need to panic. Somanathan said, there are several countries that became developed nations without even touching a 6% growth rate. So, if other countries can make it, India can make it, too.
Somanathan explained why we just need to let our Country grow at its pace. He said, there’s an impression that India should grow at the rate of 8-10% for the next quarter century to become a developed nation by 2047. However, if it fails to reach that pace of growth, we still shouldn’t panic because India won’t necessarily grow at the same speed as China or Japan did in their peak periods of growth. He added, although we all are concerned about economic recovery, Indian trade and growth and we want our nation to grow as fast as it can, but if it doesn’t grows at the desired India growth rate, there’s still nothing to panic about.
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So, why is he saying that we should not panic in the process of slow growth?
Somanathan said that we should not assume that we won’t be able to reach to the status of a developed nation if we don’t grow at the desired rate. We still can make it to the destination, no matter our speed is fast or not so fast. It is important to have a realistic approach to the factors that will lead to the desired GDP, he added.
He emphasized that there’s a greater need for realistic monetary policy, efficiency and delegation of more powers from the government level. Furthermore, India should follow its own way of growth, irrespective of how the other countries have made it.