71st SKOCH Summit Saturday | 20 February 2021
India Economic Forum, this year focuses on this issue and through consultations with all relevant stakeholders provide a road map and recommendations that would chart this path. The key challenges would be increasing consumption, handling debt situation, getting more private investment as merely government spending may not suffice to generate employment, focus on finding resources to fund infrastructure development and finally doing all this while not losing sight of Environment, Sustainability and Governance.
Being organised soon 20 days after the Union Budget, the idea is to crystallise ways in which the budget can be translated into AatmaNirbhar Growth. Also, under watch would be direction and pace of reforms. As shown by the recent events, a lot more visible attempts at consultation and consensus building may be required before roll out of any reform. What then does this do to the pace of reforms?
Last but not the least, health has now become a disproportionately big factor in the economy. Moving forward, how do we take this into account while planning for a reachable and predictable growth?
These are not the topics that any other Economic Forum is likely to discuss. It is in this context, we need your help in not only participating in the ideations during the Forum but also sponsoring this fairly resource intensive exercise. Needless to say, all relevant stakeholders are there and our outcomes are anxiously awaited and quite a few recommendations are implemented.
Power Panel: New Education Policy & the Economy
The New Education Policy is perhaps the most well written and impactful policy document in recent times. From school education to higher education, on the supply side, infrastructure provisioning, teacher training, benchmarking with international standards, and building world-class research institutions that are able to compete in global rankings are vital to transforming the Indian education system.
On the demand side, at the school level, improving learning outcomes, ensuring foundational literacy, access to learning materials are key and, at the collegiate level, enhancing the higher order skilling, training and employability of the nation’s youth to focus on creating a future-ready workforce are the requisites.
For India to become a $10 trillion economy, education will play a key role in creating a tectonic shift that empower its youth into becoming a valuable, skilled and highly productive workforce.
This panel focuses on the following areas:
- How can the NEP be leveraged to realise India’s demographic potential and unleash its economic potential?
- How can we leverage technology to achieve the vision set out by the NEP?
- How do we build world class globally competitive research Universities in India?
Power Panel: Environment, Social & Governance
With the rise of impact investing the shift of the investment priorities of future generations is evident. With increasing investments into areas and businesses that can help societies become more equitable, inclusive and sustainable through business practices and internal systems, businesses are increasingly being held to higher standards of social responsibility.
On the environmental front, this could mean helping meet climate change goals, responsible use of natural resources to minimize pollution & waste generation and effective management.
On the social front, this pertains to a business’s internal behaviours towards its shareholders and stakeholders from consumers, to human capital and supply chains.
For corporate governance, this could entail strong business ethics, refraining from anti-competitive practices, tax transparency and boardroom diversity, transparent ownership and control, fair executive pay and sound accounting practices.
This panel focusses on the following key questions:
- How do we drive social impact and economic growth through technology focused ESG investments?
- How do we lead this change through technology?
- How do we democratize access to funds available for impact investments?
- How do we bring the conversation around ESG and business responsibility into the mainstream?
- How do we create a positive environment for bolstering such investments for India’s economic future?
Power Panel: Consumption and Debt
Household consumption is well below pre-pandemic levels. Interaction-intensive services have not recovered, and the process of reallocation of capital and labour on the production side, to other objects of desire, has not yet completed. Alongside this, households are afraid about the future, and have increased saving. Putting these together, there is large demand shortfall in the economy. The feedback loops of macroeconomics are at work: when households demand less, firms get reduced revenues, which feeds into reduced expenditures by firms and thus reduced household income.
The economic stress of 2020 has generated an inventory of troubled debt contracts. Many borrowers have benefited from moratoriums, which helps for a while, but must inevitably come to an end. At a future date, many borrowers will face difficulties in debt servicing. Among financial firms, many lenders will face balance sheet stress. There will be a surge in defaults of non-financial and financial firms.
- What is life for borrowers post moratorium?
- How do we help small business service debt?
- How do we help promote household consumption?
Power Panel: Investment and Infrastructure
Private projects ‘under implementation’, at Rs. 36 trillion in December 2020 was slightly lower than the value of Rs. 38 trillion of a year ago. This comes in the context of a sustained decline over a longer period, where the peak value in nominal rupees was observed in December 2011. While a part of the economy is flourishing, many non-financial firms are facing one or more of the three problems: sluggish demand, financial stress in the firm, and constraints in accessing finance. Put together, this has added up to an environment of subdued private investment.
There has been significant growth in public investment, which is mostly in infrastructure. In December 2011, government projects `under implementation’ was Rs. 34 trillion. This has swelled to Rs. 83 trillion in December 2020. This reflects the shift away from private participation in infrastructure. But we must remember that infrastructure assets are a means to an end. The purpose of infrastructure assets is to create enabling conditions for private investment in firms that will utilise the infrastructure of transportation and communications. By 2020, infrastructure constraints were less important in shaping the thinking of private firms. In addition, government-led investment has lower efficiency in translating money into performance.
- How do we infuse capital into money markets to spur private investment?
- How do we improve access to funds and finances for businesses?
- How do we improve market sentiment to improve demand?
Power Panel: Employment and Private Investment
Labour market data gives us a good insight into macroeconomic conditions. In December 2020, 427.5 million people were employed. This was below the value of 439 million seen in December 2019. This comes in the context of sustained sluggishness of the number of persons employed, visible in the time-series which starts at January 2016. In the meantime, population growth has given more people of working age. This constitutes a fundamental challenge for public policy. Almost all jobs flow from private investment, so solving the problem of employment requires solving the problem of private investment.
- How do we spur private investment for job generative growth?
- Does India’s current workforce have skills required to meet demand for jobs in a post-Covid India?
- How to make India’s future workforce entrants, future-ready?
AatmaNirbhar Growth: A View from the Centre
AatmaNirbhar Growth: A Macroeconomic View
The grammar of economics dictates that the policy be either ‘left of center’ or ‘right of center’ so does the grammar of development. Neither allow for explaining out of box thinking, disruption or even plain common sense. In the run up to 2014 elections in a conversation with Mr Modi, I told him that it is difficult for textbook economists to understand his policies through the prism of ‘isms.’ His policy eschews ‘isms’ and looks at each issue from the prism of ‘inclusivity.’ Inclusive Economics and Inclusive Governance are the essence of Prime Minister Modi’s economic policy and a few economists are tying themselves in knots trying to understand this.
The ‘India Economic Forum’ will deep dive into the macroeconomic essentials of growth and employment; completing tax reforms by rationalising personal income tax and GST; assess the state of state finances and the impact of new terms of reference for the 15th Finance Commission.
There are schemes that have performed brilliantly well and are changing the rural economic and development landscape. The Forum will take note of, and learn from, successful schemes such as Ayushman Bharat, Swachh Bharat, Ujjwala Yojana, as well as the Rural Transformation which is underway. It would also recommend ways to scale these further, converge more schemes and undertake drastic digital re-engineering on services delivery. It would try to highlight initiatives such as Aspirational Districts whose good performance and impact may be hiding in plain sight.
Top social scientists and economists bat together for a prosperous India
Who Should Attend?
- Economic Editors
- Banking & Financial Professionals
- Public affairs and development professionals
- Foreign trade representatives
- Government affairs professionals