Following is the Text of the speech of Finance Minister, Shri Pranab Mukherjee made at the annual function of ASSOCHAM, here today:

“It is my pleasure to be here today at the 88th annual function of ASSOCHAM. As a representative body of Indian industry and enterprise, ASSOCHAM has always been at the forefront of pursuing ideas that empower Indian entrepreneurs. It has contributed to building consensus on policy response to issues that impact growth of the economy. It has taken a lead in the dissemination of business knowledge that drives initiatives for market diversification and over all development. Indeed, I am happy to see that this engagement with the development process in the country is very much reflected in your theme for this year’s annual function, namely “Garland of Grids 2015: 10 per cent Growth through Universal Access”.

Let me start by placing the theme for this meeting against the backdrop of our recent development experience.

In a globalizing world, the challenges and opportunities of development, in general, and that of sustaining high growth over an extended period of time, in particular, have become more complex. The last two years have been a difficult period for the Indian economy which otherwise was experiencing an unprecedented spurt in its growth rate. We had to confront three major challenges originating in our external sector. First, a surge in capital inflows, which peaked in the last quarter of 2007-08. Second, an inflationary explosion in global commodity prices, which began even before the first challenge had ebbed, and hit us with great force in the middle of 2008. There was barely any time to deal with this problem before the third challenge, the global financial meltdown and collapse of international trade, hit the world with severity.

The resulting economic slowdown and recession in major developed economies adversely impacted growth in all parts of the world. It revealed critical gaps in international policy making and regulation, in risk management and international development cooperation. It also raised a number of questions on the process of international decision making and accountability that have a direct bearing on the global economic environment for the developing countries.

Most importantly, the crisis highlighted the fact that if we have to benefit from the ongoing process of globalization we have to have strong domestic economic foundations, an integrated and a coherent policy approach to protect and promote national interests. We have to deepen and broaden the domestic market so that we can ride the shocks and uncertainties of the global economy just as well as the periods of expansion and boom. This requires that we take a balanced broad based approach to our development process- an approach that is well captured by the idea of “garland of grids”.

I see the idea of national grids in diverse areas of human activity as a means to speed up the process of building a spatially evolved and regionally balanced Indian economy. It is a means to create an equitable access to resources for the people in all parts of the country, therby placing them on an equal footing.

A country of more than 1 billion persons cannot be led by growth in a few sectors or a few cities and regions of the country in a sustainable manner. With nearly two-third of the population still living in the rural areas it is important for the economy to reach out to these people and provide opportunities to them from the ongoing economic expansion at their door steps. This is essential not only for strengthening the inclusive character of the growth process, but also for anticipating and addressing the demographic issues associated with unplanned urbanization that the absence of a regionally balanced growth can potentially spark. I am not sure that everybody will agree if I say that the process of urbanization in India, by and large with the exception of a few mega cities, has been quite manageable so far, especially when one makes an international comparison with countries in the same stage of development as ours. However, it is important that we take every such step that will allow our economy to develop spatially and synergistically across different sectors of the economy to ensure the overall sustainability of the growth process and a quality of life that the ‘Aam Admi’ aspires for.

The present Government has a renewed mandate for reinforcing inclusive growth, for which the architecture was laid out by the present Government in its last term. It is a mandate for equitable development, where all legitimate aspirations of the people of India can be meaningfully realized.

In the last five years, the Gross Domestic Product of the Indian economy has grown at 8.5 per cent per annum, notwithstanding the significant dip in growth in 2008-09 on account of the global slowdown. We have succeeded in significantly raising the growth rate and sustaining the momentum of the economy to levels that are historically unprecedented. Underpinning this performance are a number of factors that will serve as sources of strength for the years ahead. Savings and investment rates have picked up; the industrial sector has demonstrated the capacity to compete with the best in the global economy; investors, domestic as well as international, have shown confidence in the evolving policy framework and the fundamentals of the economy; and there is steady expansion in domestic demand. Most importantly, the revenue buoyancy in the wake of this growth has come with a renewed public capacity to address the chronic problems of unemployment and poverty that have plagued our economy and the society.

All this gives us hope and courage to aim for a more ambitious growth path, which would give us the means to strengthen and building further the inclusive character of our economy.

We have to build and sustain an economy where the growing capabilities and rising aspirations of individuals can be matched with an expanding set of opportunities for people to enjoy. The economy should be able to support productive employment for all those who enter the labour force.

The ability to generate adequate employment opportunities will be a major factor on which the inclusiveness of the economic growth could be judged. The benefits of economic growth have to percolate down effectively to the most marginalized and vulnerable segments of the population. We need to not only bring down the incidence of poverty but bring it down quickly. There are a number of human development and socio-economic indicators that have to be improved significantly if we are too strengthen the inclusive aspect of our development process.

The present government in its last tenure has tried to bring in a paradigm shift for making the development process more inclusive. It involves creating entitlements backed by legal guarantee to improve access and provide basic amenities and opportunities for livelihood to vulnerable sections of our population. Thus, there are legal entitlements of information in the public domain, for work, education and now the Government is looking at the issue of food security as well.

In an era of rapid and broad based globalization our economy has to be integrated with the global economy to access the scarce resources, including technology, and markets if it has to become a developed nation where its people have the opportunity to realize their potential. For far too long in the past we have denied ourselves the possible benefits and opportunities that accrue from being a part of a larger growth process at the international level. We have set this right now and cannot afford to turn back. With our resources, especially the human resources and the demographic advantage that comes with having a younger population, we are uniquely placed at this juncture to make the 21st Century a truly Indian Century if we continue to build on our global linkages with our trade partners and potential markets. However, the recent global events have amply demonstrated that one has to be cautious in traversing this path.

For us, economic growth has to be an instrument for development and not an end in itself. It has to be not only inclusive but also equitable so as to sustain it over long period. In the last five years, we have moved steadfastly in that direction. It is my earnest hope that the Indian entrepreneurs will continue to contribute effectively in our journey ahead to achieve this shared vision.”

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September 2021