New Delhi: A report released by the World Economic Forum’s Global Risk Network and the Confederation of Indian Industry (CII) says that India is at an inflection point – the prospect of sustaining 8-10% growth is achievable, but a number of basic challenges are acting as a handbrake on development and need to be addressed.
More than 40 experts from business, academia, non-government organizations and policy-making were asked to consider the drivers of the recent period of unprecedented growth in India and the opportunities that exist, as well as the threats to India’s continuing progress to prepare the report. The report was published on 1 December to coincide with the India Economic Summit being held in New Delhi,
The report outlines six key risk factors and also gives some findings to be worked upon.
Experts comment on report
”The six risks are intimately interlinked and generate many other threats to the Indian economy. Along with national security, the three pillars of security – human, economic and physical – need to be raised to bring the economy to a position where the challenges can be met. The risks were identified because of their interconnectedness, which magnifies their impact,” said Shamsher S Mehta, director general, Confederation of Indian Industry (CII), India.
”While sustained 8-10% growth for India is possible, it is not a given. In the short term, three economic threats loom large: a rising rupee, an oil price shock and a collapse of asset prices, triggered by a global re-appreciation of risk. In the medium and long term, risk mitigation should focus on building increased resilience via continued investment in basic infrastructure and education, as well as on inclusive growth, in order to reap the demographic dividend of a young, aspirational and growing populace,” said Gareth Shepherd, who oversees Economic and Financial Risks in the Forum’s Global Risk Programme.
Six key risks India is facing
1) Economic Impact of Demographics
2) Loss of Freshwater, both in quantity and quality
3) Economic Shocks and Oil Peaks
4) Geopolitical Risks: Globalization vs Protectionism
5) Climate Change
6) Societal Risks: Infectious Diseases
Key findings of the report
1) The existing infrastructure in India is stretched to its upper limits and increased investment is required
2) Urgent need for the government, private sector and civil society to collaborate on governance reforms to eliminate corruption and ensure equity
3) Much can be gained by removing constraints inherent in inefficient government bureaucracies, complex tax regulations and labor market rigidities
4) Decision-makers should not assume that tomorrow’s growth story would read like today’s
5) Political dynamics and the scope of structural reforms are more likely to shape the next chapter