Thursday, December 2, 2010

The India Story told by IMF MD

Let me mention just two powerful features of India’s success story that hold important lessons for other countries.

First, a focus on inclusive growth. In India, the goal is not simply for growth to be rapid, but for growth to also be inclusive—and improve the quality of life for all citizens. As India’s government seeks the best policies to achieve this dual goal, it is fortunate in having advisers like Professor Basu, who brings such strong academic credentials to his position as Chief Economic Adviser.

Second, technological advances. India’s meteoric rise in the services sector has been an inspiration to other countries. Clearly, India’s commitment to excellence in higher education has played a major role in this success. So too did the dismantling of the “license raj” in the early 1990s, which unleashed a powerful wave of creativity and entrepreneurial spirit.

These two features of the Indian growth miracle are coming together through the Unique Identification project, under the leadership of Chairman Nilekani. This project holds out great hope for making India’s social services—which provide a lifeline to hundreds of millions of vulnerable Indians—better able to reach those in need, and more cost-effective. The UID can also advance financial inclusion, which plays a critical role in supporting small businesses and in reducing poverty.

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