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Singapore’s Former Deputy PM Criticizes Excessive Government Intervention in India’s Economy: NITI Lecture 2016

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Tharman Shanmugaratnam Highlights India’s Challenges and Opportunities


Addressing the first NITI Lecture on ‘Transforming India’ on August 26, 2016, Tharman Shanmugaratnam delivered a speech on India and emphasized that India faces two significant challenges, one related to its demographic situation and the other concerning the rise of intelligent machines.

India’s Economic Growth

  • India needs sustained economic growth of more than 8% in the next two decades to address internal demands.
  • This growth is necessary to generate employment opportunities, address underemployment, and foster economic development.
  • India aims to emulate China’s success in moving a substantial portion of its population from lower-income status to the middle-income bracket.

Excessive Government Intervention

Tharman Shanmugaratnam pointed out that India’s approach to its economy has been characterized by excessive government intervention and inadequate investment in social and human development.

He emphasized the need for the government to withdraw from old roles of economic regulation and ownership and management of enterprise, which restrain private investment and job creation.

Economic Disparities with China

Tharman Shanmugaratnam highlighted the economic disparities between India and China.

  • India’s per capita income is significantly lower than China’s.
  • Even with consistent growth, India would still only achieve approximately 70% of China’s per capita income in two decades.

Integrating India with China and ASEAN

Tharman Shanmugaratnam emphasized the need for stronger links between India and Southeast Asia, and India and China.

  • The level of engagement between India and China is considerably lower compared to ASEAN and China.
  • There is an opportunity to develop higher exports, higher imports, and FDI flowing in both directions.

India’s Education Gap

Tharman Shanmugaratnam identified education as India’s biggest deficit and the unfulfilled potential of its people.

He stressed the need to fix the school system and improve India’s performance in international assessments.

India’s Limited Presence in the Global Export Market

Tharman Shanmugaratnam highlighted India’s limited presence in the global export market and the opportunities for expansion through competitive market participation.

He mentioned that India’s employment laws and land acquisition laws discourage firms from employing more people and becoming larger.

Updated: 03 Sep 2023, 02:16 PM IST

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