IFR India's path to sustainable growth 2016: Participants
Export-Import Bank of India
David Rasquinha is deputy managing director of Export-Import Bank of India and has been at the bank since 1985. He has had wide-ranging exposure to export credit, having worked in treasury, multilateral agency-funded projects, planning and research, risk management, trade and project finance, and project exports. Between 1999 and 2004, he was resident representative at the bank’s Washington DC office.
Bejoy Das Gupta
Institute of International Finance
Bejoy Das Gupta is chief economist for Asia-Pacific at the IIF. He has over 20 years’ experience in the analysis of macroeconomic policy, capital flows and the financial sector. Prior to joining the IIF in 1993, Das Gupta was economist for the International Lead and Zinc Study Group in London, an inter-governmental commodity organisation, and in investment banking with Grindlays Bank.
Avinash Persaud’s career spans finance, academia and public policy in Europe and America. He is currently chairman of Intelligence Capital, a financial consultancy. He was previously managing director of State Street Corporation; global head of currency and commodity research at JP Morgan; and director, fixed-income research at UBS.
Moody’s Investors Service
Marie Diron is senior VP at Moody’s Investors Service and was previously director of macro forecasting at Oxford Economics. Prior to that, Diron worked for Brevan Howard, advising the fund’s traders on economic and monetary policy developments. She was also a principal economist at the European Central Bank.
Soumya Kanti Ghosh
Soumya Kanti Ghosh is chief economic adviser at SBI. He has previously been a senior fellow at think-tank ICRIER, and chief economist at the Federation of Indian Chambers of Commerce and Industry. He has more than 25 years of experience in academia and research bodies and an industry chamber and worked with multinational corporations in areas related to economics, risk management and Basel II implementation for banks in India, the Middle East & South Asia.
Editor-at-Large, IFR Thomson Reuters
COMMENTS BY ARUNDHATI BATTACHARYA, CHAIR, STATE BANK OF INDIA
“There are three or four crucial differences between the Indian economy today and others around the world. First and foremost we have the Goods and Services Tax Bill, which is intended to change the way India is taxed and substantially increase the tax net. That is very important. This bill was passed without a single negative vote, which really demonstrates the maturity of India’s parliamentary democracy. That is increasingly difficult to find in other countries. It shows that our lawmakers are doing what is right for the country, rather than working for short-term political gains.
The second thing is the decentralised nature of power in India. India is a federal country and the states have a lot of power, and unless and until these states get on board, it is very difficult to get any reform off the ground. We are starting to see that more and more states understand that last-minute freebies are not going to get them back into power.
This is thanks to the emergence of a very well-informed younger generation that has access to a lot of information via television and the internet. In the 2000s we had an internet penetration of 0.5% but that has now grown to 31.1%. All that information has made the young generation very aspirational. They are not aspiring to last-minute freebies like pressure cookers or TVs; that is not going to get their votes. So the states have realised they need to follow a path of sustainable growth in order to return to power. That is a very strong incentive for them to work with the centre and pursue policies that lead to better corporate governance, and thereby more sustainable growth
Third is the fact that India, unlike anywhere else in the world, has what is called a ‘Unique Identification Authority‘, the largest biometric database in the world. That enables the country to identify who needs what. We are still figuring out how to fully leverage this resource.
But it has given the government the ability to clearly target those people who need help, thereby ensuring that growth is as inclusive as possible. And it is saving money by minimising the leakage we have seen from the handing out of subsidies. That has been empowering because it ensures we can pursue this policy of inclusiveness with minimal cost.
Last but not least, in India we recognise that people have to be ready for the jobs that are being created. The ‘Skill India’ mission is a huge initiative and for the first time the government is not working on this alone but has the support of every large Indian corporation, which are all getting involved.
SBI for example is running 117 rural training institutions. In the last three years we have trained close to 300,000 people, 49% of whom have found a job or started a small business. Everybody in India is now aware of the importance of these skills, and the fact that this mission can only be achieved if we all work together.
These are a few things that are extraordinary about this huge and diverse country, India. I recently heard the president of the World Bank talking about how best to bring private investment into development activities. He suggested it is actually a risk-return equation; that the risk taken should be commensurate with the return achieved, in order to mobilise the private sector.
One thing that interferes with that relationship – by holding back returns and increasing risk – is poor governance. And that is why it is important to discuss the political maturity of central government and the states. India’s leaders are absolutely focused on that one element of growth. They realise that there are risks, and that it is their responsibility to mitigate them and to do the heavy lifting. And they are doing that, alongside the people who matter – that is, the large corporates and many other institutions like ours.
That is what sets India apart today, and what makes India a much better risk.”