India has great potential: Former US Treasury Secretary

Dr. Bhalla asked Dr. Summers if sustained high inflation is a possibility of the future. Giving an overview of the situation, Dr. Summers said that it is not likely. He said that there is an increase in demand, which is not matched by supply. Moreover, wage inflation is occurring, too. Ignoring these signs of inflation might hurt the economy in the long run according to Dr. Summers.

The next point of discussion was central bank inflation targeting. By which, central banks set a target inflation rate which directly affects the expectations of individuals and businesses. About this, Dr. Summers said- “I think inflation targeting was always somewhat an exaggerated idea. I was never one who felt that hinging a policy on whether inflation was running at a planned rate was a particularly good idea.”

Global growth prospects and climate mitigation

Climate mitigation was another important and current topic of discussion when it comes to the economy.

Dr. Bhalla asked Dr. Summers what the allocation of resources for climate mitigation means for economies like India’s, which hopes to achieve higher growth. He said, “I find myself with an intermediate view. An economy constrained to not produce excessive carbon is going to perform less than favourably. That seems to be just common sense. On the other hand, I do think it is a bearable cost.”

Dr. Summers said that the COP26 conference in Glasgow may not see the exaggerated commitments required to make this period a turning point in mankind’s fight against climate change. This is because the effort being taken on this front is still a work in progress.

 India’s future 

According to Dr. Summers, these are India’s advantages over China when it comes to growth - massive intellectual ability, advantages of rule of law, English speaking facility, and information technology. If India is able to use them is something that many people are going to watch, he said.

Worries for the future

Dr. Summers worries whether there are adequate global efforts being made to protect humanity’s common interests. He also raised concern on how well the global economy will be able to accommodate China’s significant economic changes.

For India specifically, the Former Treasury Secretary notes that the challenge is in reducing rates of absenteeism in teachers. It is important for a country like India which is hoping to be a modern state. While the potential for India’s growth is large, ultimately it is about finding the right model which sustains long-term growth.

Mr. Vikram Limaye, MD and CEO at NSE, noted in his inaugural address how under the leadership of Dr. Patil, the NSE helped in setting up the first depository and first clearing corporation. These were the infrastructures that helped develop trust in the markets. The NSE quickly grew to be the largest stock exchange in India and 3rd or 4th largest globally.

Helping India transition from a banking-based financial model to a capital market-based financing model is the NSE’s cornerstone for enhancing its economic impact. Good corporate governance practices, disciplined market development, efficacy in market transactions, and stimulating market inclusions are important for the same.

“We are committed to building trust and integrity in financial markets by investing in technologies and regulatory initiatives that reinforce risk management, streamline compliance requirements, and protect investor interests. From a policy and regulatory standpoint, it is important to build trust and demonstrate stability to give confidence to investors,” stated Mr. Vikram Limaye.

Watch the complete conversation here:

https://www.moneycontrol.com/msite/DrRHPatil-memorial-dialogue-2021/