India must grow at 8% to transform lives: Former US treasury secy

Speaking at a CII event, Larry Summers highlighted that the issues India faces are less related to the scale of the govt and more about its effectiveness

India should aim for an eightfold increase in its economy by 2050 to bring about transformative changes in the lives of millions, said former US Treasury Secretary Larry Summers. Achieving an annual growth rate of 8 per cent in a challenging global economic landscape is feasible for India; however, several policy constraints in key areas must be tackled to unlock the country's vast potential.

Speaking at a Confederation of Indian Industry (CII) event titled 'The World is on Fire', Summers pointed out that India's challenges are less about the scale of government and more related to its effectiveness. A combination of liberalising market forces, bolstering infrastructure in the energy sector, implementing state-level reforms and supporting a more effective public sector could generate an 8 per cent growth rate.

He also said that the important thing about resilience is that it comes from diversity rather than self-reliance. Protectionism is a ground for substantial concern, Summers said. 

Summers is also the co-chair of the G20 expert group on Reforms for Strengthening Multilateral Development Banks (MDBs) along with 15th Finance Commission chairman N K Singh. Regarding MDBs, Summers noted that these institutions must grow both quantitatively and qualitatively.

He said that MDBs are at the centre of whatever chance the world has to meet the growing climate challenge. “Carbon pricing is important but more important is dissemination of economically competitive renewable energy,” Summers said. 

He emphasised that coal should not be used for energy generation, pointing out that its social costs are prohibitively high. 

"It is a mistake to think that compromise between coal and renewable energy is viable, the detrimental effects of coal far outweigh the benefits of renewable energy," he stated.

Chief Economic Advisor V Anantha Nageswaran and Department of Economic Affairs Secretary Ajay Seth were also present on the occasion.