BackIndia has the potential to grow at 9% for a decade: Lawrence Summers
Harvard professor and economist says the country needs to 'reform more boldly'
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New Delhi: India has the potential to grow at 9% for a decade if the country takes bold reform measures, eminent economist and Harvard University professor Lawrence Summers said on Saturday.
“Except India, major emerging economies seem to be losing momentum... I think if India maximizes its potential, it could grow at 9% for a decade, and 8% a decade after that, and 7.5% for a decade after that," Summers said during a session at the Hindustan Times Leadership Summit.
Summers, who is president emeritus and Charles W. Eliot professor at Harvard University, said he is very optimistic about India’s capacity, but that the country needs bolder reforms. “... 9% growth, decline by 0.5% to 1% every decade, that is my sense about India’s potential; that is not my forecast for India because India would have to reform more boldly and take a whole set of steps not just at the national level but at the level of states, and even at the level of culture if it wants to achieve that potential," he said.
Quoting the International Monetary Fund (IMF), Summers said India is projected to be the fastest growing economy in the world over the next five years. Summers’s statement assumes significance as India’s economy grew 7.4% during July-September this fiscal year, faster than China’s 6.9%.
Summers, who is also a former US treasury secretary, said India should not blindly follow the so=called Tiger economies’ growth model and should stress more on developing its services sector. “I think India can do lot to promote manufacturing. But I don’t think it is reasonable to think India should follow South Korea’s export-led growth model," he said. “India has different potential and it should concentrate more on services sector."
Summers also stressed on the need for speedier and more predictable decision-making in India. “Speedy decision-making has never been an Indian hallmark. There is still too much of a sense in India that being well-connected is particularly very important in the country. If this can be worked on, nothing like it," Summers said.
Asked whether the US Federal Reserve should raise interest rates, he said, “It is very clear. Given the current context, there isn’t any other alternative to raising interest rates."
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