India is “young, aspirational, and demanding,” according to Arvind Panagariya, the former vice chairman of the National Institution for Transforming India.
“Of course, youth is generally demanding,” he told attendees who packed the event space on the 17th floor of East Village on Wednesday for the second annual lecture in the Center for Emerging Markets’ India Lecture Series.
Indeed, India’s economy is young. The country was granted independence from the British Empire in 1947 and then launched a brand new economic development program, Panagariya explained.
In the intervening 60 years, India’s economy has exploded. It’s now the seventh largest economy based on the exchange rate and is poised to grow to No. 3 within Panagariya’s lifetime.
Panagariya is an economics professor and former chief economist of the Asian Development Bank. In 2012, he received Padma Bhushan, the third highest civilian honor bestowed by India’s government.
As India’s economy evolves, he said, so, too, do its economic development programs. In 2016, the government nullified existing ₹500 and ₹1000 banknotes in favor of new bills. Event moderator Vivek Sharma, CEO of Piramal Pharma Solutions, a global pharmaceutical company, asked Panagariya about the impact of the move.
“That was a fight against corruption,” Panagariya said, explaining that it was an effort to cut down on illicit spending and counterfeit cash.
The push to continue growing India’s economy won’t be easy, though. University Distinguished Professor Ravi Ramamurti, director of the Center for Emerging Markets, outlined three major challenges for the developing economy—a trend toward protectionism, the changing nature of technology, and the rise of China as a global player.
Still, if the country’s recent rapid growth is any indication, none of the challenges are insurmountable. “If we look back to where we were 30 years ago to where we are today, there’s no reason to be pessimistic about the future,” Panagariya said.
The economist explained that it took from 1947 to 1990 for India’s per capita income to double. Between 1990 and 2013, however, it tripled. Similarly, between 1993 and 2011, the country’s poverty rate was reduced by half.
“That is a tiger-like growth,” Panagariya said.