Leading economist Lawrence H Summers said he has been supporting India’s economy for a long time and hopes the country’s economy could grow for 15 years. On Wednesday, he was speaking to Mint editor-in-chief Sruthijith KK at the Hindustan Times Leadership Summit (HTLS).
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“I believe the rule of law, the vast entrepreneurial energy and ability, the ease with anything digital, the remarkable NRI diaspora are all sources of potential economic strength,” Summers said.
“I think that a relatively low income level in India, compared to China, offers substantial potential to capture growth. I hope India can experience 15 years of growth, ”he added.
He said, however, that a country like India needs political stability, less government control for robust economic growth.
“I don’t think it requires public policies that have been historically difficult. It requires a government prepared to free the economy from government restrictions and control. It requires a sense of political stability, ”said Summers, who served as Secretary of the US Treasury from 1999 to 2001.
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Summers, however, also pointed to some incidents that he said do not bode well for an economy like India, which has the potential to become one of the major economies in this quarter of the 21st century.
“I don’t think India’s friends abroad are as confident in India’s ability to handle challenges as they might have been in India 10 or 15 years ago – the kind of challenges facing the United States or Europe today, ”Summers said.
“I have been told that in much of India on a random Wednesday a quarter or a third of teachers who are supposed to teach in schools do not show up, but receive a salary nonetheless. This is not what lays the foundation for success in the modern world, ”he added, adding that there are contradictions in India.
Summers’ comments came a day after official data released on Tuesday showed India’s economy remains on track to post the fastest growth among major economies this year, as its gross domestic product (GDP) rose 8.4% better than expected in the July-September quarter to break through pre-pandemic levels.
With economic activities returning to normal after the second wave of the pandemic earlier this year, this is the fourth consecutive quarter of positive growth after a two-quarter contraction seen last year.
The 8.7 percent growth in government spending over the corresponding period of the previous year and low interest rates boosted consumption. Agriculture benefited from a good monsoon, generating consecutive growth of 4.5 percent.
The manufacturing sector also posted an increase of 5.5 percent, reflecting both a pickup in domestic demand and dynamic exports.