Economic Resurgence-
Moody’s Investors Service has raised the rating for 18 Indian corporates and banks, including Reliance Industries, Infosys, SBI and Axis Bank, to ‘stable’ from ‘negative’.
It has been expressed in some quarters that Indian economy is recovering somewhat faster than expected. The recovery in the current fiscal is likely to help bring growth even higher than pre-Covid time.
This is in a great measure due to the vaccination programme getting momentum. India, in spite of its lethargy and inefficiency, has slowly and surely developed its own indigenous vaccine and successfully launched a program for vaccine outreach. The declining chances of third wave of Covid have helped the industrial atmosphere.
In this regard, I would like to draw the agreements reached in the recent Quad summit for tighter integration of economies of the four countries. India’s integration with these other three democratic economies will be possible, only if India comes out of its inertia in manufacturing and export.
Divestment of Air India has shown the determination of the government to make the public sector lean to avoid losses. Since the strategic interests of India are fast converging with Quad, this will also be an enabling environment for economic understanding.
The Quad economies are the antithesis of China and here private firms operating in rule-based market economies drive things forward.
It should be clear to everyone that potential will however have to be realised by private firms. If India has to strive hard for stronger integration into Global Value Chains it has to reduce the cost of trade for other countries by removing its tariff and non-tariff barriers.
Misplaced enthusiasm for Atmanirbhar Bharat by promoting protectionism will be fatal. No country including India can be self-sufficient in all respects.
India has to enhance its economy and export and become powerful enough to enable it to import anything it likes.
India’s FDI inflows have increased and for this market had been a pull factor. If FDI starts coming into the domestic firms and these firms integrate with Global Value Chains, this will also automatically attract sophisticated technology from outside.
As a democratic and stable country, India is far more reliable than China for the world as a place for Global Value Chains. The government should realise it and it has to come out with trade supportive policies. It has also to maintain momentum for reforms in all sectors, including politically difficult agricultural reforms.
No economic growth is possible in an unstable political turmoil. It is not for government of the day only, but for the entire nation to build up a strong will to march ahead.
