A visionary talk

As a natural orator and shrewd politician, Prime Minister Narendra Modi made a remarkable impact at the World Economic Forum (WEF) in Davos where he delivered keynote address on Tuesday. Known for his eloquence, Modi, a debutant at the global conclave of businessmen, CEOs, thinkers and political leaders, tried his level best to push India’s growth story into the minds of those present at the mega event. He made it clear in no uncertain terms that India would offer immense growth opportunities for those who would come forward with investments.

However, his announcement that India will be a $5-trillion economy by 2025 is a bold statement. That means the country is required to double its economy in just eight years. That could only be possible if India clocks double-digit growth during the next eight years. The ground reality tells a different story. Our GDP growth came down to 7.1 per cent last fiscal from 7.6 per cent in the previous financial year. The growth is expected to further come down to below 7 per cent this financial year, thanks to demonetisation and new indirect tax regime. 

Against this backdrop, it will be a Herculean task for the government to push the growth beyond 10 per cent. Therefore, it’s more unlikely that the Indian economy will double by 2025. Perhaps, Modi may be optimistic that his reforms will fire up growth in next few years. But that’s a tall order. He also tried to tell that the global CEOs that his government has reduced red tape in the government and has now laid out red carpet for investors. But the government needs to bring in more reforms to create conducive environment for global investors.

Besides, it can’t ignore domestic investors if it wants to push the economic growth into higher orbit. With interest rates still high and banks reeling under the growing burden of bad loans, it’s going to be a tough task for the government to spur investments from the Indian companies. But the government can’t go on increasing public spending to drive up growth as it’s happening now. Fiscal deficit will go out of control. However, India needs both domestic and global investments to post better growth.   

However, to the delight of the linguistic patriots in India, Modi delivered his maiden address at Davos in Hindi. That’s a truly good gesture. But given the profile of audience and the purpose of his visit, he would have made a stronger impact had he talked in English. However, that’s his personal choice and no one should have any objection about it. 

But attracting foreign investments is not an easy task for any country and every effort should be made to get more investments as they are essential for the country’s growth. But will Modi’s speech at Davos deliver goods and bring investments into India? That’s a trillion-dollar question because global investors are savvier than they appear in their savvy suits and for them profits matter more than polite words.