In this cloudy global horizon, India is a bright spot - IMF MD

By Vijay Kumar

SPEAKING in New Delhi yesterday, Ms. Christine Lagarde, Managing Director, International Monetary Fund, said,

In this cloudy global horizon, India is a bright spot. Recent policy reforms and improved business confidence have provided a booster shot to economic activity. Using India's new GDP series, the IMF expects growth to pick up to 7.2 percent this fiscal year and accelerate further to 7.5 percent next year-making India the fastest growing large economy in the world.

Indeed, a brighter future is being forged right before your eyes. By 2019, the economy will more than double in size compared to 2009. When adjusting for differences in purchase prices between economies, India's GDP will exceed that of Japan and Germany combined . Indian output will also exceed the combined output of the three next largest emerging market economies-Russia, Brazil, and Indonesia. So clearly India's weight among the group of emerging markets will increase.

By 2030, India is expected to have the largest labor force in the world . At more than one billion people of working age, India's labor force will be larger than the combined labor force in the United States, the Euro Area, and Indonesia. The potential benefits to be reaped from your collective work efforts could be enormous.

So we know India can run -judging by your cricket record! Can it fly? I believe it can. As India grows and takes its rightful place in the global economy, the focus should remain on sound policies and inclusive institutions.

There is already a lot that the world can learn from India. The Economist's Global Microscope ranks India very highly for creating an enabling financial environment.

This is not surprising. Under the Prime Minister's Jan Dhan Yojana , financial services have been extended to more than 125 million previously unbanked individuals - an impressive achievement in such a short span of time! And India also expanded basic insurance coverage so people's lives become more secure.

What makes these achievements even more remarkable is that this financial inclusion approach is embedded in a broader strategy to use these accounts to provide cash transfers to those who need them. Programs in other countries such as Mexico's Prospera also capitalize on the link between financial inclusion and targeted transfers.

Many of the projects were delayed due to regulatory uncertainty and bureaucratic holdups. Much needs to be done in easing land acquisition, expediting clearances, and establishing a stable regulatory regime so that the private sector can invest. These issues are on the radar of policymakers, which is promising, they must be on the action list.

At the current juncture, the world needs a vibrant India and India needs the world! As one of the largest commodity importers in the world, an open and transparent multilateral system for trade and financial flows will be essential to support India's vibrant economy. With growing economic size and power come greater leadership expectations. We look forward to seeing India becoming even more active on the global stage - in fora such as the G-20 and the IMF.

The IMF is a global multilateral institution where countries like India deserve a bigger say. We are working precisely on that-on implementing reforms that would lift India to the top 10 shareholders at the IMF.

I would also like to acknowledge the many talented Indian staff at the Fund and the contribution they have made over the years. Your very own central bank governor, Raghuram Rajan, was one of our most distinguished economic counselors!

There is an old Indian proverb that says: "Yesterday is but a dream, tomorrow but a vision. But today well lived makes every yesterday a dream of happiness, and every tomorrow a vision of hope. Look well, therefore, to this day."

Today, the elements are all aligned to make India a global powerhouse. This is India's moment. Seize it. Chak De India!