At PIC several discussions in the past have centred around various aspects of Indian economy as well as global economy. To further broaden perspectives in this domain, we organised a lecture by Mr. Roberto Zagha, Former World Bank Country Director to India at Gokhale Institute of Politics and Economics. Eminent Economist and Vice President of PIC, Dr. Vijay Kelkar chaired the event.
Mr. Roberto Zagha joined the World Bank in 1980 and has held various positions which include- Director for South Asia for the Bank, department in charge of ‘economic policies’ and ‘poverty reduction’ in South Asia and Lead Economist for India.
Speaking on India’s economy, Mr. Zagha pointed that most of the country’s economic problems are self-made. He stated that though India is a mature democracy, how effective it would be to contain structural challenges remained an issue. The legal and regulatory framework in India was not conducive to investments as land acquisition norms and mining rules remain areas of concern.
Further his comments echoed the national feeling of under-utilized potential of manufacturing sector in India, Mr. Zagha said that the manufacturing sector’s share in India’s gross domestic product (GDP) is just 17%, not enough to absorb the flow of surplus labour from the hinterland to urban centres. In his address, Mr. Zagha applauded Gujarat for its policy of optimal utilization of resources. He said, “India as a whole faces the problem of access to power, energy. But at the same time Gujarat has made significant progress in energy sector. Utilising the available resources properly may help the country.”
Referring to the 2008-09 economic crisis and reviewing various economies including those of the US, Brazil, India and China, Mr. Zagha pointed out that, “income inequality in the US is becoming a serious problem for rational decision making. The rise of China, India, Brazil and other G20 countries has mixed prospects of recovery. Political polarisation and income inequality are severe in the US, while a two-tier economy is emerging in the EU countries.”
Commenting on the growth of US economy, Mr. Zagha expressed that the much-talked about recovery in the United States is not sustainable as the country is not witnessing any significant fresh investments in energy, transportation or telecommunications sectors.
The lecture was very well received by the students of Gokhale Institute of Politics and Economics and PIC members alike and was followed by a Q& A session.