We’re doing okay on growth, inclusivity and sustainability are our challenges: Montek

Montek Singh Ahluwalia’s book is only two-thirds finished but he’s already on the lit fest circuit, in demand as the man who presided over India’s economic reforms and one of the country’s foremost economists. “I’m looking at this as advance exposure to future experiences,” he joked on Sunday, before giving a talk on ‘India’s Economy: Challenges Ahead’ at the Times Lit Fest Delhi.

Ahluwalia’s work in progress isn’t a memoir or a book on the Indian economy, as one would expect, but a “retrospective on how I saw the reform process, what reforms meant to someone of my generation, who truly understands what a ridiculous way we had of running the economy.” Ahluwalia said the country’s rate of economic growth has been good for since 2004 but the real challenges lay in sustaining the growth, ensuring that all sections were included in growth, and that the environment is protected.

The 1950s to the 1970s are considered low-growth periods, when we neither grew at a good rate nor made a dent on poverty, said the former deputy chairman of the Planning Commission. “Finally in 1991, politicians decided to do things right and got rid of the amazing number of restrictions on private sector enterprise,” he said. From 2004 to 2015, India’s economic growth rate has been an average of 7% to 7.5%, which Ahluwalia feels, is the ideal rate that lifts people out of poverty while keeping the country going. “Now we need to ask what are we going to do to sustain it. You cannot believe that because we did it once, we will continue to do it,” he said.

Once he’d established the importance of the rate of economic growth, Ahluwalia moved on to the other aspects of growth that matter—inclusivity and sustainability. Our performance on inclusivity has been a mixed bag, he said. “If you look at the data, 2004-2011 has had the fastest reduction in the population below the poverty line, but in areas such as gender inclusivity, and quality of jobs, education and healthcare, we’ve done well but could have done better,” he said.

Sustainability was the aspect of growth for which India got no points. “Things are worse than they were 10 years ago. Our air, rivers, environment, everything is polluted because we have no awareness about how bad things are,” he said.

Ahluwalia then said that India should open up towards Asian countries, and be part of ARCEP to ensure sustained growth, while skilling its people appropriately and creating policy to help small industries of 20 to 30 people transition easily into being medium ones with 100 to 1,000 people. “We should learn from all Asian countries and not just compete with China. We need to focus on what needs to be done for India,” he said.

By: Shalini Prema-Umachandran

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