Nouriel Roubini is a gifted pragmatist who unfairly got the dark moniker, Dr Doom, for foreseeing the 2008 subprime crisis. If others had listened to him then, the massacre of the American and the world economy could perhaps have been averted.
Last week, Professor Emeritus at the Stern School of Business again predicted troubled times for most leading economies. Except one. And that is India’s.
Besides citing demographic edge, democracy, and pent-up growth potential, Turkish-born Roubini pointed to a slew of measures that India has taken which are directly and indirectly yielding results.
He praised India for building public digital infrastructure such as the UPI, Aadhaar and BHIM. “Your tech stack allows lots of different apps and tools to provide a variety of financial services, public services, and e-commerce. I think that the Indian model is better than the Chinese where the government controls all the data, or the US where a bunch of oligopolistic big tech firms control the data,” he has been quoted saying.
If economists like Roubini and agencies like IMF have been optimistic about India’s unfolding economic story, massive policy fixing by the government in the backdrop has quietly led up to this.
On March 31, for instance, the Narendra Modi government released its new foreign trade policy with the aim of growing India’s exports to $2 trillion by 2030. The policy takes the bold leap of backing international trade using rupee. It raises the limit of exports through courier to Rs 10 lakh per consignment. It has also built an amnesty scheme for failing to fulfil export obligations.
Policy changes and the will to implement them have led the nation to previously unthought-of places. When PM Narendra Modi started speaking about Make in India, he was mocked by his opponents. In 2022-23, India’s defence exports reached an all-time high of Rs 15,920 crore, a 10-fold rise since 2016-17. The defence ministry wants to take India’s annual defence exports to $5 billion (Rs 41,000 crore by current value) by 2024-’25. Buyers of India’s defence technology and arms include Italy, Sri Lanka, Russia, Maldives, Mauritius, Nepal, France, Sri Lanka, Egypt, Israel, Bhutan, UAE, Saudi Arabia, Ethiopia, Philippines, Poland, Spain and Chile.
The PM was also demonised for demonetisation. India now leads the world in digital payments, way ahead of the US and China at second and third place.
With a push for MSMEs and schemes like Start Up India, the nation has had more than 90,000 new startups in the last nine years.
Global investment bank Morgan Stanley seems to agree with the likes of Professor Roubini. Four global trends — demographics, digitalisation, decarbonisation and deglobalisation — are favouring the ‘New India’, it says.
In a report titled, ‘Why This Is India’s Decade’, it says India’s per-capita income would rise from $2,278 now to $5,242 in 2031, setting the stage for a discretionary spending boom. Households earning more than $35,000 a year are likely to rise five-fold in the coming decade to over 25 million. As a result, India’s GDP is likely to more than double to $7.5 trillion by 2031, it says, adding that India would drive a fifth of global growth through the end of this decade.
This is not happening because of a Keynesian approach but a Kautilyan model, in which the State plays a limited but strong role, argue those preparing the economic potion in the government. That in itself is a civilisational victory, apart from the purely material gains it has started gleaning.
Abhijit Majumder is a senior journalist. Views expressed are personal.
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