Exuding optimism on a day when the Sensex hit a record 19,000 points back home, Commerce and Industry Minister Kamal Nath told a gathering of top British economists that the next two decades in India will be marked primarily by "reforms in governance."
"The next phase of our reforms - part B of the phase which began in 1991 - will focus on reforms in governance. This is going to catapult and engage India with the global economy even more," Nath said at the launch of an India Observatory - a dedicated research unit - at the London School of Economics on Monday evening.
These reforms would include tackling bureaucracy and red tape.
He was speaking at a panel discussion on 'India at 60 in a changing world: the next 20 years,' alongside Bank of England Governor Mervyn King, Reserve Bank of India Governor Y V Reddy, State Bank of India Chairman OP Bhatt, India Observatory head Prof Sir Nicholas Stern and Howard Davies of the LSE.
While in London, Nath also held discussions with World Trade Organization chief Pascal Lamy Monday in a bid to rescue global trade talks in Geneva from collapse. Before heading out to Geneva Tuesday, Nath said correcting "structural flaws in the global trading system" will be another of India's priorities in the coming years and that he was hoping for a breakthrough in the Geneva talks.
In his address to a packed central London auditorium Monday, Nath said the next 20 years for India will also be marked by a "second agricultural revolution," when economic reforms start to enrich lives of the rural poor, and by the emergence of India as "a manufacturing hub and service emporium."
"I sometimes balk at talk of India as the great economic powerhouse. India still has more people living on less than a dollar a day than all the Least Developed Countries put together."
The second agricultural revolution, he said, will happen "when economic growth starts touching the 300 million people who are living on less than a dollar a day in India."
Nath said none of this - neither the current rapid economic growth and nor the strong projections for the coming decades - would have happened without the first Nehruvian phase of India's economic development. These years were marked by the engraving of democracy in a complex country with disparate populations, the establishment of an industrial base and institutions of higher learning and onset of the first green revolution that gave India food self-sufficiency.
"It's sometimes said that the first 40-45 years were wasted years. They were not India's wasted years," the minister declared, adding that these years laid the perfect foundation for India to launch into "calibrated economic reforms" in 1991.
But Bank of England Governor Marvyn King and Prof. Nicholas Stern, both of whom spoke of the need for urgent government intervention to address issues of regional and sectoral inequalities in India, sounded a note of caution.
King, who called India "the most interesting and exciting country in the world today," said the government currently spent less than 2 percent of Gross Domestic Product in capital expenditure needed for investments into health, education and employment.
In contrast, 12 per cent of GDP went into current expenditure.
Similarly, Prof. Stern, who has studied India for close to four decades, pointed out that it was of "enormous importance" for those states that were lagging behind in the race for economic growth - including the populous Uttar Pradesh - caught up with other prosperous states such as Maharashtra.
"China too has parts that are slow in economic growth, but in comparison, there are hardly any people living in those parts," he added.
However, Kamal Nath remained optimistic, telling gathered LSE economists, "I don't think you will have to wait for another 20 years to invite me here again," as the Sensitive Index (Sensex) of the Bombay Stock Exchange Monday crossed the psychologically important mark of 19,000 - just four trading sessions after it went past the 18,000-level.