New Delhi: India can achieve a sustainable 8% growth in the coming years but still needs to take many steps to remove regulatory hurdles that affect India’s competitiveness and the ease of doing business for firms, commerce and industry minister Nirmala Sitharaman said on Thursday.
Speaking at the India Economic Summit at the World Economic Forum (WEF), Sitharaman said that there is a need to work more closely with states to remove regulatory hurdles facing businesses.
“We need to work harder. We need to take states on board. There is a definitely a lot of regulator mechanisms that go down to the level of municipalities and panchayats. These obstacles have to be removed for the businesses," she said acknowledging that even infrastructure affects competitiveness. “States and the centre are working together to ensure hurdles are removed for businesses," she said. “Across states, we find the urge in states to get out of the rigmarole," she added.
In the recently released World Economic Forum’s Global Competitiveness Index, India’s ranking rose 16 places to 39 among 138 countries. However, India still lags in the World Bank’s ease of doing business index where it ranked 130 among 189 countries last year. The rankings for this year are yet to be released.
Sitharaman said that south Asia and south-east Asia will be the engine for global growth in the not so encouraging global environment. She pointed out that through greater use of technology, India is moving towards a more transparent and corruption free system.
She cited the example of the ambitious goods and services tax which envisages to bring in more than 800 goods and services-linked transactions onto one platform making India one common market. She also cited the example of the JAM trinity—or the Jan Dhan, Aadhaar and mobile that is revolutionizing the way India is banking its unbanked.
In a panel discussion, Gita Gopinath, professor of economics at Harvard University, said the biggest challenge for India is to achieve sustainable growth and not have an instance of a lost decade like some other European countries that went through an economic crisis.
“How can India sustain a 8% growth for the next many decades. That is the biggest challenge. It can continue to do reforms, and see further improvement in the ease of doing business index and its competitiveness rankings," she said.
John Rice, vice chairman, GE, Hong Kong SAR, said there is a need to put more emphasis on exports and to support manufacturing exports.
“There should be more emphasis on export because if you are not exporting then it means you are not competitive. There is a need to set up an Export credit agency in India to support manufacturers who export," he said stressing the need for investment in basic infrastructure to achieve sustainable growth.