India's ascent from ‘Fragile 5’ to fastest-growing economy has lessons for developing world: NITI Aayog VC
United Nations, July 18: India’s ascent from the "Fragile Five" to the fastest growing major economy has lessons for other developing countries, according to Suman Bery, the vice chair of NITI Aayog.
“The government came out with a white paper which talks about the situation they inherited: India as a part of the so called ‘Fragile Five’; and now, it is one of the fastest growing economies in the world”. Bery spoke exclusively that UN Bureau just after presenting India's report card at the UN's High-Level Political Forum on Sustainable Development.
Asked about what India's experience can show the other developing countries, he said, “India has its own challenges, and I think one reason for India's success is that it has mechanisms to come up with its own solutions”. “With Prime Minister Modi, having been at the helm for ten years and now having been selected to be Prime Minister, another five years, I think there are certain lessons to be drawn”, he said.
“A lot of that has to do with sheer economic management, making sure that the inflation rate is down, good administration, the GST (Goods and Services Tax)”, he said. Above all, he said, economic and financial stability was important and the government had its mandate. “So, there are certain basics, which, I think, India's experience confirms are important”, Bery said.
In “India's case the emphasis even at the time of Covid and after Covid on infrastructure has been quite important, important for employment and productivity, also important for connectivity”, he said.
“And finally, the digital story is fairly well recognized” around the world”, he said, and what it "points out is actually the link between intelligent policy and a fairly dynamic private sector, a successful model of public-private partnership”.
The “Fragile Five” term was coined by the international investment company Morgan Stanley that lumped India with four other developing nations signalling their economic vulnerability. That was a year before Narendra Modi’s election to his first term as Prime Minister.
The International Monetary Fund has also reiterated India’s position as the fastest-growing economy with a growth rate of 7.5 per cent for this year, continuing the world record for the seventh year in a row.
As he explained the contours of Viksit Bharat and PM Modi's vision for India as a developed society by 2047, Bery with his tousled grey hair and scholarly mien projected the image of a professor rather than someone at the intersection of politics and bureaucracy.
He brings to the NITI Aayog the experiences of working with the private sector, as the chief economist of Royal Dutch Shell, with think tanks as a scholar, with the World Bank as an economist, and as a government adviser.
At the UN political forum where member nations presented their progress with the UN’s Sustainable Development Goals (SDGs) 17 targets to be reached by 2030 Bery said India laid emphasis on strengthening partnerships to facilitate access to adequate financing, technology and capacity building for the Global South.
He said that India was on track to achieve years early the goal of reducing the number of those living in poverty by half. “Around 135 million Indians escaped multidimensional poverty in the five years between 2015-16 and 2019-21, made possible through integration of social safety nets, infrastructure development and multiple financial inclusion programmes”, he told the forum.
India has achieved progress towards this and other goals encompassing ending hunger, extending healthcare, fighting climate change, and institution building “in a participative, democratic framework with orderly transfers of power at the level of Indian states and at the centre”, he said.
Asked during an interview about the role of the private sector in achieving India’s development vision, he acknowledged, “I would say that we have not made as much progress as we might have”.
“One is that after the economic liberalization of 1991, the private sector was meant to play a much larger role”, he said, but “it took, frankly, 30 years and the arrival of a new government to recognize the reality”.
“In going from development being a question of government schemes to development being seen as a question of appropriate policies, I think what we have to do now is trust more in our policies, and have more stable policies”, he said.
Building the digital public infrastructure is an area where the private sector made a successful contribution that could be a model. What it “points out is the importance of intelligent regulation”, he said.
“There are two dimensions about how the government and, therefore, NITI Aayog interacts with the private sector: One is through policies, and the other is through regulation”, Bery said. “And in both of these, I think India has made a promising start, but to become a developed economy by 2047 much more needs to happen”, he said.
