American economist and Nobel laureate Joseph Stiglitz said on Friday that the current slow growth being experienced by India ‘was not the end of the world’.
“Though it is natural to have high aspirations after witnessing a nine per cent growth rate, it is not the end of the world if India is now growing slowly. When the global economy is going through a big crisis, it is not possible for any individual country including India to grow at a high rate as in good times,” said Stiglitz who was delivering a lecture titled ‘Macroeconomics in Crisis: An agenda for rejuvenating the discipline’ at the University of Hyderabad on Friday.
Responding to a question at the end of his lecture, the author whose latest book is The Price of Inequality, however, said India with a vast internal market should not have a problem in growing its economy.
“If you get your macroeconomic policy right, you should be able to grow at a reasonable rate,” Stiglitz said while suggesting the policy focus should be on strengthening the domestic economy and on ways to increase the purchasing power of people.
The significance of the domestic market as the fundamental driver of growth in the Indian context can also be understood from the fact that the country's exports account for just 15 per cent of the GDP, according to him.
He also said the GDP alone could not explain or address the problems a country faces even though growth is equally important for a society to meet the basic needs of all the people. GDP was a very bad measure of welfare and requires better metrics of its measuring to make it reflective of human well-being.
During his lecture, Stiglitz said all the existing economic models had failed to recognise and warn about economic pitfalls like housing bubbles and the global financial crisis besides addressing the problems of unemployment and distribution.
The University of Hyderabad conferred an honorary doctorate on him on the occasion.