Hyderabad: “In 2047 India will have a per capita income of the value of today’s dollars of 10,000 US Dollars, said Dr. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, here on Wednesday,
The average size of the GDP will be approaching close to 20 trillion US Dollars too and therefore , India, will be a transformed society”, said Dr. Bibek Debroy while virtually addressing the inaugural session at the 57th Annual Conference of the Indian Econometric Society (TIES) held at the University of Hyderabad (UoH) here.
Dr. Debroy remarked that basic necessities have been provided to the people and more so in the rural areas by the Government.
“Economic indicators after the Covid 19 have improved in India. Everyone is now looking to see the rate of growth in 2023-24 and the growth of the economy by 2047, he said.
The pandemic may have passed but still there is a lot of uncertainty around the world, he said there is uncertainty around what is happening in China, about the Russia-Ukraine conflict, growth prospects in Europe and the USA.
Since India is not insulated, we will also face the volatility, Forex markets and capital markets and exchange rates will face volatility. Inflation rates will also be impacted by some uncertainty”, he added.
Dr. Debroy said, “There are four sources of growth – Consumption, Private Investment, Government Expenditure and Net Exports. The global market is not going to be rosy. We tend to forget that when India did 9 percent growth, our exports had performed quite well. The net GDP ratio is also very high.”
Dr. Debroy, while referring to the Goldman Sachs report which had contemplated the rate of growth for India only at 5.5 percent, said, “Today when India does 5.5 percent, there is despair all around. Just to illustrate how aspirations have changed. However, with 5.5 percent growth, there has been an exponential rise in the per capita income.”
“Different States are at different levels of development and hence the sources of growth will also be different. But the fact of the matter is that to raise the growth trajectory, we need to make Land Markets more efficient. Agriculture will also vastly improve when we make land markets more efficient. Similarly, we need to make the labour markets and capital markets also more efficient”, he added.
In his concluding address, Dr. Debroy said, “We need a simplified GST and a simplified system of direct tax. These are the areas on which all of us should think and the research that we collectively produce will educate all of us and help in making much informed policy decisions.”
In his presidential address on “Official Intervention, Reserve Accumulation and Exchange Rate Volatility”, Prof. M Ramachandran, President of TIES and faculty at Pondicherry University, said “The Volatility of exchange rate is negatively associated with official purchase of foreign exchange and also the response of volatility is larger in magnitude when the level of reserve is below the threshold level”.
On the contrary, official sale triggers volatility irrespective of whether the reserve holding is above or below the threshold level, he added.
Prof. B J Rao, Vice Chancellor, UoH; Prof. Ramana Murthy, Dean, School of Economics; Prof. V. R. Panchamukhi, Chairman, TIES Trust; Prof. K.L. Krishna, Former Director, Delhi School of Economics and Dr. Nitin Desai, Former Under Secretary General, UN-DESA was present on the occasion.