Kenneth S. Rogoff, famous Harvard economist and former chief economist at the IMF, in a recent interview (ET, October, 14, 2022) stated that the recent policy of tightening monetary policies would hurt the global economy and may even lead to global recession. He believes that in this situation, providing employment and food is more important than controlling inflation.
It is a very interesting time for India
Rogoff categorically mentioned the name of India as it has got the opportunity to prosper economically in a big way in this situation. He said this while commenting on the recently released World Economic Outlook of the IMF. The Outlook mentions that the crisis of the global economy is yet to reach its peak. It also expresses satisfaction on India’s economic performance in this current fiscal. Rogoff said, “South Asia is relatively a bright spot in the global economy. We are also seeing growth moving from northern Asia to southern Asia now. Many firms are adopting a ‘China-Plus One’ policy. South Asia will be a big beneficiary of that. This is a very interesting time for India.” He mentions some of the countries of south Asia which have been comparatively doing well. These are India, Vietnam, Singapore, Malaysia and Indonesia.
Policy makers in India have been very optimistic about India’s economic prospects in the coming years. But India has to take care to achieve high quality human resources. So it has to give attention to some matters related to this. A few are mentioned below:
One, reduction of poor people
In the period between 2004-05 and 2012-13, India reduced its poverty by 25% - the highest reduction in history of independent India. Again in between 2015-16 and 2019-20, India pulled out about 140 million people from extreme poverty. In the later phase, adoption of developed technology to transfer welfare benefits to people has been one of the main factors behind reduction of poverty (Economic Times (ET), editorial, 18th October). But surprisingly, the number of poor people has risen in the pandemic phase. The World Bank, using the CMIE data, pointed out that as many as 56 million have been pushed below the poverty line in the pandemic phase. An Economic Times (October 18, 2022) article rightly pointed out that the two poverty measurement methods of UNDP and World Bank are slightly different. The World Bank considers a particular dollar value adjusted for purchasing power parity to measure poverty. On the other hand, UNDP considers a multi-dimensional evaluation of health, education and standard of living to measure poverty. Whatever be the method of estimation of poverty, it is accepted that India has been a home for about 23 crore people, the highest number in the world. So, Indian policy makers have to take very serious steps to quickly eradicate both extreme and general poverty. India can not be a prosperous country with such a huge number of poor people.
Secondly, child health structure of India must be improved
India has been a country which supplied free food to 80 crore people during the Covid crisis in addition to the already existing free food supply to targeted sections. So, general hunger has been reduced to a large extent. But child nutrition is a matter of concern. This has also been exposed in the Global Hunger Index. India has ranked 121 out of 126 countries. Developed countries are not included in the GHI. The Indian government has not accepted the GHI and stated that GHI estimates are intended to malign the country.
In GHI, undernourishment (insufficient calorie intake), child stunting (low height for age), child wasting (low weight for their height) and child mortality (who die before their fifth birthday) are considered. The information is taken from governmental official data. Indian policymakers must acknowledge this and emphasise on child nourishment.