HTLS 2021: Rooting for India's economy for a long time, says economist Lawrence Summers

HTLS 2021: Lawrence Summers, however, also highlighted some incidents which he said do not bode well for an economy like India, which has the potential to emerge as one of the leading economies of this quarter of the 21st century.
Lawrence H Summers, former director of the White House National Economic Council, speaks to Sruthijith KK, editor-in-chief of Mint, on HTLS 2021. 
Lawrence H Summers, former director of the White House National Economic Council, speaks to Sruthijith KK, editor-in-chief of Mint, on HTLS 2021. 
Published on Dec 01, 2021 06:52 PM IST
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By | Written by Amit Chaturvedi, Hindustan Times, New Delhi

Leading economist Lawrence H Summers has said that he has been rooting for Indian economy for a long time, and hoped that the country’s economy could see 15 years of growth. He was speaking to Mint editor Sruthijith KK on Hindustan Times Leadership Summit (HTLS) on Wednesday.

Full Coverage: HTLS 2021

“I believe that rule of law, vast entrepreneurial energy and capacity, facility with all things digital, remarkable NRI diaspora are all sources of potential economic strength,” said Summers.

“I believe that relatively low level of income in India, compared to China, offers substantial potential to capture growth. I am hopeful that India could see 15 years of growth,” he added.

He, however, said that a country like India needs political stability, less govt control for robust economic growth.

“I don't think that require public policies that have been historically difficult. It requires a government that is prepared to liberate economy from government strictures and control. It requires a sense of political stability,” said Summers, who was Secretary of US Treasury from 1999-2001.

Also Read | Lawrence Summers on China's approach to tackle Covid-19

Summers, however, also highlighted some incidents which he said do not bode well for an economy like India, which has the potential to emerge as one of the leading economies of this quarter of the 21st century.

“I don’t think India’s friends on the outside are as confident in India’s ability to manage challenge as they might have been confident in India 10 or 15 years ago - the kind of challenges that the United States or Europe are facing today,” said Summers.

“I have been told that in substantial parts of India, on a random Wednesday, a quarter or a third of teachers who are supposed to teach in schools don’t show up, but receive salaries nonetheless. That is not what lays a basis for success in the modern world,” he further said, adding that there are contradictions in India.

Summers’ comments came a day after the official data released on Tuesday showed that India’s economy remained on track to post the fastest growth among major economies this year as its Gross Domestic Product (GDP) expanded by a better-than-expected 8.4 per cent in the July-September quarter to cross pre-pandemic levels.

With economic activities returning back to normalcy post the second wave of pandemic earlier this year, this is the fourth consecutive quarter of positive growth after a two-quarter contraction witnessed last year.

The growth of 8.7 per cent in government expenditure over the corresponding period of the previous year and low-interest rates boosted consumption. Agriculture chipped in on the back of a good monsoon, delivering back-to-back 4.5 per cent growth.

Manufacturing too posted a 5.5 per cent increase, reflecting both a recovery in domestic demand and buoyant exports.

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Sunday, January 23, 2022