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BW Businessworld

‘Demonetisation, A Courageous Initiative’

India’s commitment to stimulate growth and lift the poorest and most vulnerable is quite evident and must be praised

Photo Credit : Bivash Banerjee

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I remember on the eve of India’s independence, Jawaharlal Nehru described the country on the verge of bold advance and I think it’s fair to say that this vision is bearing fruit today.

Despite all the challenges, India is one of the fastest growing economies with GDP forecast of 7.2 per cent, which is way above the global average and there are strong signs that the country will continue on this path. I must commend India on the wide range of reforms it has undertaken to improve and strengthen institutions.

The recent demonetisation initiative to help formalise the economy is the best example of the effort. At the same time, India has improved its infrastructure and has created means for improving the business environment. I would like to commend India’s courage in pursuing all these reforms. They are not easy and these efforts are being recognised around the world.

India’s commitment to stimulate growth and lift the poorest and most vulnerable is quite evident and must be praised. India is a very active member of WTO and a strong propagator of multilateralism at the global stage.

The World Bank Doing Business report last year, reflects the challenges in the economy but it shows that progress is being made. India’s effort in paying taxes, trading across borders and enforcing contracts have all sharply improved in the World Economic Forum’s Global Competitive Index. India jumped 16 places and now ranks 39 out of 108 countries. So now I see India taking its true place as a dynamic country, which is ready to do business.

In this global period of uncertainty, we are hearing of more and more inward looking policies. Now well, this is very common in the scenario of slow growth, we must nonetheless emphasise that turning into protectionism will not solve all the problems we have.

Also, another notion, which is prevalent is that trade disrupts local markets, leading to unemployment. But trade is a very minor factor in the unemployment figures. The impact of new technology is much more significant, around 80 per cent, i.e, 8/10 jobs lost in the economy are due to new innovations and advancement in technology.

We all know that this is indispensable in high growing economies, especially India, which is seeing a major transformation in technology with IT products becoming increasingly important. So the answer is not to reject the forces but learn to adapt and embrace this new reality.

Against all odds, we will succeed, we all will succeed. In fact, we succeed when the member countries of WTO are both ambitious and flexible. Whatever we do, the solutions have to be equal and benefiting to all. When we bear that in mind, we will be successful. We are constantly working with IMF, World Bank and other institutions to put more realism in a conversation, which is essentially emotional in many places.

Now fighting emotions with numbers is not always very effective, but that’s what we have. We continue our efforts. Trade will not solve all your problems. Trade has to be an important element of your development policies but it has to go hand in hand with all the other development polices including education, social security, skill of labour force, etc. A lot of the problems countries face today is within their borders. There are a lot of policies at home implemented and not being done.

(Azevedo spoke to Naina Sood among others during his recent India trip)

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Roberto Azevedo

The author is Director General, WTO

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