Fiscal responsibility, unsatiated consumption and demand, and increasing urbanization are three driving factors that would put India on track to become a middle-income country in terms of per capita income, according to N K Singh, economist and co-chair of the G20 expert group on reforming multilateral development banks. However, the chairman of the 15th Finance Commission stated that much more work on the reform program is required to reach this aim.
"Rarely has India been in a position where the track record of macroeconomic stability and the coherence and congruence of monetary and fiscal policy is so favorable as today," Singh said, emphasizing how India can become a middle-income country. He stated that the large infrastructure expenditures that have yet to be made provide another significant opportunity for India, particularly in the field of renewable technologies. He also stated that much more has to be done to encourage orderly urbanization, which has historically been a growth driver.
"We need to do much more to improve the competitive efficiency of our export sector by not succumbing too easily to protectionism." "I believe the policies pursued have been very, very prudent," Singh remarked.
He stated that India has complicated federal politics and that the fact that India is one of the few countries that is perpetually in election mode does not improve the predictability of governance measures. "This is an issue on which some thinking has certainly commenced."
When discussing the issues that India faces, he emphasized the importance of upholding the sanctity of contracts throughout governance. "People who invest do so with the expectation of a certain predictable rate of return." And if something is examined, it does not boost corporate confidence. So, what are the tools that may be put in place to enable an orderly transition even if the governance metrics change?" Singh stated.
States that continually stick to strengthening the overall environment for private sector investment and moving away from undue reliance on government outlays, he believes, should be identified and rewarded. In terms of expanding India's exports, Singh stated that becoming a viable credible export nation should be one of India's goals. "Our competitive advantage positions as well to be able to achieve this goal." Singh also stated that in the long run, India will occupy a lot larger position in terms of FDI.