Why Davos is batting for a stable India

Our world is interconnected and India cannot remain insulated from trade tensions or currency upheavals. A strong, capable government is essential, which makes our upcoming elections even more crucial.

 |  4-minute read |   24-01-2019
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It’s freezing in Davos, with customary snow and sub-zero temperatures. This year, many major world leaders, including US President, Donald Trump, UK Prime Minister Theresa May, French President Emmanuel Macron, and our own PM Narendra Modi, have decided to give the World Economic Forum a miss.

Notes from 2018

With more than their normal share of domestic headaches to attend to, being seen at Davos may not be politically beneficial. On the other hand, those attending include German Chancellor Angela Merkel, Japanese PM Shinzo Abe, Italian PM Giuseppe Conte, and Israel PM Benjamin Netanyahu.

In 2018, Modi was the toast of this tiny Swiss ski resort, being the first Indian PM to visit in 20 years, with India’s largest-ever delegation consisting of top leaders and CEOs in tow — Modi spoke both as a statesman and the leader of a growing economic power.

davos1_012319121642.jpgIn 2018, Modi was the toast of Davos. (Photo: Reuters)

He flagged climate change, terrorism, counter-globalisation and dangers of technology as threats to world civilisation. He also emphasised his plans for India — how his government was fighting poverty, inequality, and opening up India to investment. As Union minister Suresh Prabhu put it, “PM has a vision of creating a new India by 2022.”

Even without Modi, India is still buzzing at Davos — this time as the world’s officially certified fastest-growing economy.

Testifying to this are India’s top-notch business and industry leaders: Reliance Industries Ltd’s Mukesh Ambani, Wipro’s Azim and Rishad Premji, Tata Sons Chairman N Chandrasekaran, JSW Group CMD Sajjan Jindal, Mahindra Group Chairman Anand Mahindra, Bharti Enterprises chairman Sunil Mittal, Adani Group chairman Gautam Adani, Bajaj Finserv and Bajaj Holdings and Investment MD Sanjiv Bajaj and Spicejet owner Ajay Singh.

According to the World Bank, India had already surpassed France as the sixth largest economy in 2017.

In the backdrop of Davos, a new report by audit firm Pricewaterhouse Coopers (PwC) assumes significance. India is soon likely to overtake the UK to become the fifth largest economy in the world.

India among titans

As the experts explain, “India should return to a healthy growth rate of 7.6 per cent in 2019-20, if there are no major headwinds in the global economy such as enhanced trade tensions or supply-side shocks in oil. The growth will be supported through further realisation of efficiency gains from the newly adopted goods and services tax and policy impetus expected in the first year of a new government.”

The US remains the world’s largest economy with a GDP of $19.39 trillion, followed by China and Japan. Germany, at number four, is just over a trillion dollars ahead of India, which some would think is catch-up distance. In 10 years, India’s economy, with a current GDP of close to $2.6 trillion is expected to overtake Japan.

In fact, a Citigroup study even predicts that by 2050 India will be the world’s largest economy in purchasing power parity (PPP), with a projected PPP income of $85.97 trillion.

While at home, warming up to the forthcoming elections, naysayers speak about farm distress and urban discontent, the mood at Davos is quite different as Indian leaders try to wrap their heads around the event’s official theme, ‘Globalisation 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.’

Given that our population has probably overtaken China’s as the largest, though we don’t like to admit it, we can be at the heart of whatever radical global change is occurring right now — our population is still relatively young with a growing workforce below 30, and we are a functioning democracy.

davos_rtr2ww4z-copy_012319121859.jpgSnowy? Or icy? More than the slowing down of the global economy, the uncertainties of geopolitics is more concerning. (Photo: Reuters)

Vote prudently

Unlike China, we cannot have a leader for life, nor can our politicians devote all their energy to govern the country. Instead, staying in power, or, as in the case of the BJP, returning to power is a Herculean task — that is why the outcome of the 2019 general elections is so crucial.

Given this imperative, what is the message from Davos for the Indian political class, not to mention the masses?

More than the slowing down of the global economy, the uncertainties of global geopolitics, or even the so-called Fourth Industrial Revolution, it is good governance that is most important for India.

Our world is so interconnected and digitised that India cannot remain insulated from either trade tensions or currency upheavals. India’s forte will remain delivery of high-quality and lowcost services. But for that to happen, the general level of education, awareness and skilling must increase.

As Bajaj said in an interview, “What is important for a country like ours is to have a decisive government and one that is inclusive as well.” To me, that is the message from Davos.

(Courtesy of Mail Today)

Also read: Relief for farmers to tax exemptions: 5 things Arun Jaitley could offer to woo voters through Union Budget 2019

Writer

Makarand R Paranjape Makarand R Paranjape @makrandparanspe

The writer is director, Indian Institute of Advanced Study, Shimla. The views are personal.

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