Asheville: India has the potential to grow beyond its current 7-8 per cent trajectory, World Bank President Ajay Banga has said, describing the country’s latest economic performance as robust despite global energy pressures, trade uncertainty and the impact of El Niño.
In an exclusive interview with IANS on the sidelines of the G20 Finance Ministers’ meeting in here, Banga said the latest growth figures reflected the strength of India’s underlying economy.
“India is now delivering regularly seven to 8 per cent growth, that’s pretty good. And I think there’s opportunity to go even beyond that,” he said.
Banga pointed to growth in services and exports along with sustained investment.
“Even inside that 7.8 per cent, there’s good growth in services. There’s good growth in exports. In fact, investment has held up. So I think this is a pretty robust performance that India has shown,” he said.
The World Bank chief said the focus should extend beyond a single quarter and towards translating growth into employment and opportunities for young people.
“I think there’s a great opportunity for India to keep building through its private sector investments and growth of that and growth in jobs,” he said. “You need to convert all this into the opportunity and hopes and aspirations of young people.”
In addition, Banga outlined three pillars needed to generate employment like physical and human infrastructure, regulatory reform and the mobilisation of private capital.
He said India was doing substantial work on roads, bridges, airports, power, water and digitisation, adding that more progress was needed in education, skilling and healthcare.
“I think the whole skilling and education ecosystem in India needs to be tuned even closer to where the jobs are going to come from in the future and what the private sector would want to do with you,” he said.
On regulatory reform, Banga cited recent changes in labour laws approved by the central government. He said their full effect would depend on implementation by individual states.
“It needs to get implemented state by state for the change to be seen at the ground level, but it’s great progress over where we were a few years ago,” he said.
Banga said private investment would ultimately be critical to expanding employment. “Jobs are created in the private sector. Government enables and the private sector creates,” he said, adding that micro, small and medium-sized enterprises would be central to that effort.
He identified infrastructure, agriculture, primary healthcare, tourism and value-added manufacturing as sectors capable of generating large numbers of jobs. India, he said, had particular strengths in minerals, metals and fashion.
Banga said he had discussed tourism and MSME opportunities with Finance Minister Nirmala Sitharaman. He also said the World Bank had moved quickly to support Indian businesses during the recent crisis following the war in Iran.
“The first thing we did was to pump almost three billion plus of financing into the MSME sort of sector in India for trade finance,” he said.
Banga said India was also emerging as a source of development knowledge for other countries, particularly through its digital public infrastructure and work in agriculture. He said India’s journey towards its 2047 goals would depend both on domestic growth and the stature it occupied in global economics and politics.
