Turning tariff challenges into reform opportunities
These, at a time when nerves are frayed globally on what next in global trade and the possible impact for emerging economies, seem to reignite and renew hopes for higher growth – which entails growing well past the 6.5 per cent and hopefully with it also be a harbinger of a 1991 moment for the Indian economy. Like in 1991, some leading industry leaders like Naushad Forbes,Co-Chairman, Forbes Marshall and the former president of theConfederation of Indian Industry (CII)believe India would do well if it were to turn the current challenges posed by the US tariff increases as a timeto hasten the drive to usher in some much-needed and long overdue domestic reforms. The government seems inclined to stay the course in ushering in fresh regulatory reforms and has set up tworegulatory commissions – one under Shaktikanta Das, principal secretary toPrime Minister Narendra Modiand the other under T V Somanathan, the cabinet secretary. These are being recognised as well- intentioned endeavours albeit some critics argue that ideally such committees must have outside experts and from the industries and not necessarily secretaries.
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Economist calls for sustained 8-9% growth
The other imperative on high growth has been well articulated. Dr C Rangarajan, economistand the former governor of Reserve Bank of India has maintained for a long time nowthat if India is to find itself seated on the top table of rich nations then it needs sustained high growth of over 8 to 9 per cent each year for the next two decades at least. Much of these starting in the early years when the base is not large and high growth multiples may be more feasible. Agrees Professor Rishikesha Krishnan, a go-to guru on strategy and innovation at the Indian Institute of Management, Bangalore (IIIMB). “It is good to see the latest GDP numbers for the quarter. India certainly needs to be on the high growth trajectory if it has to attain its long term growth aspirations,” he says.
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Professor Krishnan, who till very recent was the director at the IIMB, is known to many for his hugely readable books on innovation- one on Jugaad to systematic innovation and the other about Jugaad to excellence.
To Navneet Munot, MD & CEO at the HDFC Asset Management Company, the growth numbers are in a sense reflective of the “resilience and the robustness of the Indian economy in a very challenging global environment.”
There is little doubt that these are indeed challenging times, especially in global trade and with geo-political tensions adding to the uncertainties. But then, as one economist, who did not wish to be named says, “we seem to be doing reasonably well given the circumstances but now that the effects of tariffs will kick in, we may have to be careful from next quarter onwards because exports may slowdown but then we also need to remember that exports are still not the mainstay for the Indian economy.”