WHEELS OF PROGRESS, NEED NO (MORE) SPOKES

A $5 trillion economy is achievable in India and is not a too-distant goal. It just needs the relevant blend of physical capital, human capital, technology, policy proactiveness, and most importantly, stakeholder interest

- Srinath Sridharan & Ninupta Srinath

THE COVID-19 PANDEMIC has taught individuals, societies, and nations that life goes on, and that livelihood has to be built and rebuilt over and over again. It has also pivoted our attention to the inclusive socio-economic development needed, for which collaborative commerce could be the path in a federation-of-states structure like India. It would need heavy lifting by the multiple stakeholders concerned, and not just the Government of India.

But apart from strategic planning for a nation's growth, there are unseen, unthought-of, and sometimes even unavoidable risks that keep emerging and having detrimental impacts on the economy. The currently raging Russian invasion of Ukraine has dented global food chains and other supply chains further. During such uncertain global turmoil, we have seen the US Federal Reserve raising interest rates. India's foreign exchange reserves have now fallen below the $600 billion mark amid capital outflows and a strengthening dollar. At its peak, the reserves were $642.45 billion in September 2021. Foreign funds have pulled out over Rs 1.75 lakh crore so far in this calendar year. To curb inflationary trends, it seems that further interest rate hikes would be brought in by the Reserve Bank of India.