India rides on consumption boom, investments to hit the fast lane: Suresh Prabhu

Former Union Minister for Commerce Suresh Prabhu

The great Indian growth story is likely to accelerate riding on higher consumption and increased investments, both domestic and foreign, former commerce minister Suresh Prabhu said.

“The huge entrepreneurial spirit of Indians will cause a new wave of higher growth,” he told Moneycontrol.

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Prabhu said that government policies need to be balanced for higher consumption but, at the same time, should elevate savings for all – households, corporates and government – to make available a bigger pool for investment-led growth.

For enabling this, procedural hurdles, unwarranted and unproductive regulatory challenges must immediately be reduced and eliminated. “We must facilitate, particularly for micro, small, and medium enterprises (MSMEs) reduced the cost of compliance, to enable more start-ups in the era of less employment in the organised sector caused by technology-driven industry. We must create a larger fund to get equity for small businesses,” he said.

India has the G20 presidency during unprecedented times as the raging war is not just reducing Ukrainian cities to rubbles but also tearing apart the world into new divisiveness.

“We are fighting the cold war and, at the same time, redrawing the balance of power. We must provide a much-needed leadership and focus on a peaceful world to create space for all. The grouping of 20 countries - constituting more than 80 percent of global GDP - must care for those poor outside of this group,” he said.

India can take the lead for initiating a global infrastructure platform. Inequality has increased dramatically while witnessing global growth for which corrective measures are needed. “The platform will ensure rich countries’ capital can flow into other countries to create much-needed infrastructure. This can be a win-win for all, as it will create missing jobs and address a mismatch of capital waiting for bankable projects,” he said.

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Prabhu highlighted climate change as an existential threat staring at the world. India needs to focus on it by not only changing the energy mix, but also many more measures. “We can't ignore adaptation while reducing greenhouse gasses by mitigation,” he said.