# Global Economic Policy Forum
Recently, the Confederation of Indian Industry organized the coveted Global Economic Policy Forum in New Delhi, India. The theme of this year’s meeting was “Strategizing Global Prosperity Amid Polycrisis.” It was attended by leading government dignitaries from India, including cabinet ministers. The Department of Economic Affairs played a key role in the event. Also in attendance were leading policymakers from abroad, including representatives from the World Bank, IMF, OECD, and IMD, among others. The venue was set in the majestic Bharat Mandapam, Pragati Maidan, New Delhi, which is fast emerging as one of the center stages in Asia for holding leading international events. The event had a wide array of participants with speakers from leading consulting organizations, startups, nonprofits, and academic institutes of excellence. Confederation of Indian Industry is one of India’s apex non-governmental bodies representing both the public and private sectors. The organization plays a pivotal role in bridging the gap between the public, private, and government through policy analysis and bringing all actors on a single platform through its well-thought and organized events. Confederation of Indian Industry is a significant enabler for social change and impact within the wide gamut of actors in the Indian business and social impact ecosystem. Inaugurated by Chief Guest Nirmala Sitharaman, Honourable Minister of Finance and Corporate Affairs, Government of India, the stage was set to discuss various policy initiatives that would keep India on a growth trajectory to become a major power in the future during times of global uncertainty.
# Startup Nation – Powerhouses of Growth
Dr. Ricardo Hausmann, Rafik Hariri Professor of the Practice of International Political Economy and Founder and Director of the Harvard Growth Lab at the Harvard Kennedy School, Harvard University (USA), spoke about the Memorandum of Understanding between CII and the Harvard Growth Lab. Dr. Ricardo Hausmann is a well-known figure and features in the book “Startup Nation: The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer”, where he articulates the innovation by Israel in dry agriculture, desalination, and drip irrigation. An excellent example is the Yatir forest that survives only on rainwater, though only 280 millimeters (about eleven inches) of rain falls each year – and yet the forests are growing faster than expected and on par in soaking CO2 as other lush temperate forests. Israel is an outstanding example of a country that has used its startup ecosystem to build a world-class high-tech society. An inspirational read, it discusses various initiatives taken by the government, including one of the first public-private partnership venture capital models backed by Israel’s government. From the first investment by Warren Buffet outside the US to the first R&D center of Intel abroad, “Startup Nation” is a racy read to understand how a country with less than 10 million people with little natural resources became an advanced country on the back of the tenacity of its people and thought-provoking economic and business policies. 1
The main agenda was to showcase the levers of India’s growth, predominantly its youthful generation of people, along with a reliance on the services sector. The services sector is the largest area of exports for India, ahead of remittances. However, at the same time, India must also focus on product development and manufacturing. One key aspect to note is the lower productivity of India vis-a-vis comparable countries. As India is fast catching up in technology, an increase in the level of technology while keeping other factors constant will, over the next decade, increase the productivity of India. Here India has a lot of scope. Urbanization in India is expected to be around 40.76 percent by 2030, according to a survey by the United Nations. Advanced countries have urbanization close to 80 percent. An increase in urbanization will lead to further economic development through gainful employment of less skilled people, increase the formal sector of employment, and lead to an incremental increase in GDP. The demographic in India drives consumption that has increased due to the digitalization policy by the Indian government. Recall from the macroeconomics online courses on The Middle Road. You can register for free here for the macroeconomic online course. In the long run, the Quantity Theory of Money can be expressed as MV = PY, where M represents the Quantity of Money, V is the rate at which money circulates within the economy, and PY is the nominal GDP. Keeping other factors constant, an increase in the rate of money circulation leads to a rise in nominal GDP. The digitalization policy of the Indian government has also contributed to an increase in consumption within the economy. (citation needed).
Suggested read Productivity, Chat GPT and Steady State
One standout moment of the event was the presence of Mr. Nadir Godrej, Chairman and Managing Director of Godrej Industries. He captivated the audience with his compelling poetry, demonstrating a remarkable showmanship that delighted everyone with creativity and artistic flair. His speeches injected a touch of levity into the otherwise challenging and intense discussions comparing various economic models.
Sustainability and other areas of social impact were also discussed, with key figures such as Dr. Richard Damania, Chief Economist of the Sustainable Development Practice Group at the World Bank (USA), and Dr. Mekala Krishnan, Partner at McKinsey Global Institute (USA). India has taken positive steps in the sustainable development sector. This year, the government of India has started tapping into the sovereign bond market through green bond issuance. There is a growing awareness of holistic causes in India. Turning to capital markets, the event had a plethora of representation from the financial services sector.
Ms. Madhabi Puri Buch, Chairperson of SEBI, shared a nuanced discussion on reforms undertaken by SEBI to safeguard investors. One such reform is the reduction in equity settlement cycle. The equity settlement cycle has reduced from T+2 to T+1 easing the margin requirements of investors making it easier for investors to invest.
India equity markets are on a roll this year; there were discussions about both equity and fixed income markets. The bond market size in India is increasing and has some way to go, but the process has begun. Ashishkumar Chauhan, Managing Director and Chief Executive Officer, National Stock Exchange also discussed his views on the market.
According to a triennial Federal Reserve survey, 58 percentage of U.S households held stocks in 2022, the highest ever for the country. This statistics is shared to comprehend the expected surge in liquidity within the capital markets as India’s progresses over time with the US data as the benchmark.
Well-thought-of reforms and regulations would lead to a higher percentage of ownership stocks leading more equitable wealth effects within the urban population. The event was attended by key officials from Niti Aayog, the Government of India’s leading think tank, along with various government officials. Piyush Goyal, Hon’ble Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Government of India, and Smriti Zubin Irani, Hon’ble Minister of Women and Child Development and Minority Affairs, Government of India. There were a few people from IMD in attendance. One key point noted by Arturo Bris, Professor of Finance and Director of the IMD World Competitiveness Center (Switzerland), – India is one of the few countries to have a national strategy. This is a precondition for building a strong foundation and superstructure for any country. The recent opening up of the semiconductor sector is another area of interest. Ajit Ranade, Vice-Chancellor at Gokhale Institute of Politics and Economics (GIPE), critically observed that 80 percent of work within very large-scale integrated circuits is in software, underlining the importance of maintaining India’s software technology-driven ecosystem.
The Global Economic Policy Forum is a futurist event and a judicious platform for all actors within the Indian and global ecosystem to mingle and discuss various points of view. A well-functioning democracy needs to understand policies from multiple perspectives and have quantified inferences. Gatherings like the Global Economic Policy Forum are a universal platform to understand the impact and causality of policies and their social impact in the given areas of study. One drawback was that the event was too packed, with many events scheduled close together in a single venue. It would have been better to spread out events across multiple venues, giving people sufficient time to network among peers. The Global Economic Policy Forum is a futuristic, well-planned, and well-executed event and a glowing tribute to India’s global leadership. Such illuminating events should be held at regular intervals.
1. Startup Nation: The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer
2.Chart: Data World Bank
Reach out to nishant@themiddleroad.org for any queries related to this article. The article edited after initial post.