India Positioned For Economic & Technological Ascendancy, Say Global Economists

In a recent panel discussion at Bennett University, global economists including Nobel Laureate Michael Spence, asserted that India is set to significantly enhance its economic and geopolitical standing in the coming decades. The discussion highlighted key factors such as India's evolving demographic dividend, the rapidly expanding digital economy and GDP growth rates that outpace major economies worldwide.

Professor Michael Spence, who has extensively studied growth across the globe, emphasised that India possesses the highest potential growth rate among major economies. He commended the nation stating, “India has successfully developed, by far, the best digital economy and financial architecture in the world. It is a transformational architecture.”

"India’s leap on the technology front will be a key catalyst for the economic expansion of the nation, currently the world’s fifth biggest economy and its pivotal position in international affairs", he added.

Addressing a student's question on crypto assets, Spence remarked "Cryptocurrency is not a currency because a currency is a store of value and a medium of exchange. If its value changes by a factor of 20 or 30 per cent in a week, it is hard to believe it is a store of value. It is only a currency for those people who want to hide in the darknet.”

He predicted the rise of central bank digital currencies, controlled by central banks, as a solution to extreme data security challenges.

Other panellists outlined how India's technological transformation positions it for a more significant role on the global stage. Rob Johnson, President of the Institute for New Economic Thinking (INET), expressed optimism stating, “India is at the cutting edge of transformation in technology, which I think is a basis for optimism".

Against the backdrop of evolving geopolitics, including conflicts in Ukraine and the Middle East, the panellists emphasised India's rising international prominence. They predicted India becoming the world's third-largest economy with a GDP of USD 5 trillion in the next three years.

“I had pointed out at the ETNOW Global Business Summit in the presence of Prime Minister Narendra Modi ji last week-end, how confident we all are about India becoming the world’s third-largest economy with a GDP of USD5 trillion in the next three years, and I am delighted that Prof Spence is also so positive about India”, said Times Group MD Vineet Jain. “It has been a great experience interacting with him and hearing his views –first at the ETNOW GBS, and now, at the panel discussion at Bennett University which will be aired by ETNOW”, he added.

Amid a global economic system undergoing significant changes, Spence likened the current world scenario to a 'regime change in the global economy.' 

“This is the world that has characteristics and experiences that we haven’t felt for the last three decades. That’s what I mean by regime change and disruption,” he noted.

In such a juncture, India is exporting a vision “at the cutting edge of this new frightened world,” Johnson said. “India in the realm of technology is a visionary and an ambassador to transformation.”

Prof. Rohinton Medhora, Chair of the governing board at INET, emphasised the significance of intangibles and intellectual property in global wealth. He highlighted, “The source of wealth is locked up in intangibles. Most governments haven’t fully caught on to govern an economy, where so much wealth resides in intangibles, where fixed costs are high and marginal costs of production are practically zero.”

“If it is existential, firms will get it. But often existential is still 10, 20, 30 years down the horizon. Very few firms have that horizon because they don’t have that capital or staying power. So, we need capital markets that encourage that kind of horizon,” said Medhora.

Johnson summed up India’s current role citing French author and aviator Antoine de Saint-Exupéry’s famous novel The Little Prince, “It's only with the heart, one can truly see.” India sees that with more clarity than almost any other country, he said.

The discussion will be aired on Friday at 7:30 PM and Saturday at 8:30 PM on ET NOW.