Finance Minister Pranab Mukherjee today said adverse global economic developments, including the fallout of downgrade of US sovereign rating, present new opportunities to India, and the country could become a source of stability for the world economy.
Against the backdrop of overall investor sentiment being hurt by global economic uncertainties, Mukherjee said India could also emerge as a safe haven for global capital inflows.
He was speaking at a function to mark the Golden Jubilee Celebrations of Indian Economic Service (IES) here.
“If India can continue to grow and acquire economic strength, we could be a source of stability for the world economy and provide safe havens for restless global capital,” he said.
The recent events such as Standard & Poor’s downgrade of the US credit rating as well as debt crisis in Europe, have severely dented global markets.
Even though these recent developments are a cause of concern for India, Mukherjee said “at the same time… these shocks are markers of shifting balance in the global economy, presenting new opportunities for us”.
“We have to be alert to shape real-time policy responses, reform systems, improve the regulatory framework of our institutions and make the most of the opportunities coming our way,” he said.
India’s robust performance in difficult times shows that it could actually come out stronger from any international financial crisis, he said.
With the country earning a place on the “high table” of global policy making, Mukherjee said today India has global responsibilities of a kind that it did not have 15 years ago.
“This places huge new responsibilities on our shoulders,” he added.
The minister also said with a greater role now played by market forces, there is a need to re-design incentive structures for development and regulation of markets and for improving the quality of governance.
He said there is a significant scaling-up of development efforts in social sectors and higher transfer of resources to the states.
Besides, he said, there is a move towards fuller integration of the economy with the proposed implementation of a uniform GST across the country.
To this effect, he said, there is an urgent need to spread the process of economic reforms from the Centre to the states and sub-states levels for harmonising economic policies at different levels.
This also required improving the efficiency of public expenditure and raising the accountability in delivery of services by the Centre and the state governments.
Mukherjee also launched a website of the Indian Economic Service and a logo of the Service.