Montek Ahluwalia India Economy Fta Deal Rupee Depreciation Foreign Direct Investment

Economist Montek Singh Ahluwalia on the need for a strategy for managing the balance of payments, price signals being suppressed, managing exports and why rupee depreciation, for the moment, is a good thing. The session was moderated by P Vaidyanathan Iyer, Ma... Economist Montek Singh Ahluwalia on the need for a strategy for managing the balance of payments, price signals being suppressed, managing exports and why rupee depreciation, for the moment, is a good thing. The session was moderated by P Vaidyanathan Iyer, Managing Editor, The Indian Express P Vaidyanathan Iyer: Could you take us from 2000 onwards, the first 13-14 years and the next 13 years? We have had three different governments in this period. The Vajpayee NDA from 1998 to 2004, the UPA from 2004 to 2014 and the current Modi NDA from 2014 to today. It is fair to say that all three have talked about the need for reforms and also made some progress, broadly following the direction set in 1991. However, the 1991 reforms were transformational, dismantling decades of license permit raj controls. What has happened since then is much more gradualist. The fact that governments under different political parties moved forward broadly in the same direction is good news. It shows that there is a broad consensus beneath political polemics. It is particularly important that parties opposing reforms when in Opposition, adopted them when in office, as happened in the case of Aadhaar and also with the GST. However, the pace of movement has been far too slow. I think we are now at a stage when this sort of gradualism will not be enough. Economist Montek Singh Ahluwalia. (Express photo by Abhinav Saha) P Vaidyanathan Iyer: So, what's the India story now? The world is preoccupied with too many things and India is not a focus of attention. This is in some ways an advantage. But we should try to reestablish a positive India story. The positive features about India’s economy are well-known. We have favourable demographics; the economy grew at 8 plus per cent over an extended period before 2010 highlighting the strengths of the Indian private sector; infrastructure and logistics are improving though more needs to be done; the digital public infrastructure has expanded over the past 10 years, leading to an increase in financial inclusion. ExplainSpeaking | To defend, or not to defend (the rupee), that is the question All this is good but it is not enough. To reestablish the India story we need a much clearer articulation of how we intend to deal with the immediate challenge we face as a result of the oil crisis and the longer run challenge of how to accelerate growth to achieve Viksit Bharat. P Vaidyanathan Iyer: Let’s start with the balance of payments. How do you see India’s prospects given there’s no immediate end to the war? Does the three years of continuous pressure on the balance of payments worry you? As you say there is no immediate end to the