8% GDP growth target ‘imaginable goal’ for India, says ex US treasury secretary Larry Summer

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New Delhi: Calling an eight percent GDP growth target ‘imaginable’ for India, former US treasury secretary Larry Summers emphasised the country’s potential and ability to bring transformative change in the lives of millions of people by 2050. 

“I believe that [eight percent GDP growth] is an imaginable goal and an eight-fold expansion in an economy would be transformative for the lives of hundreds of millions of people,” he said.

Speaking at an event hosted by the Confederation of Indian Industry (CII) and the Department of Economic Affairs in New Delhi Saturday, the eminent economist clarified that the eight percent target forecast wasn’t based on a current policy. He cited “federalism” — issues between the states and central government — and restrictions in key regions as hindrances to achieving the same. 

According to National Statistical Data (NSO) figures released last month, India’s GDP reportedly grew at a rate of 7.8 percent in the April-June quarter of the 2023-24 financial year.

Delivering a lecture on ‘The World is On Fire,’ Summers, a former World Bank economist, also discussed the current state of the world with reference to climate change. “It [the world] is literally on fire if you look at the square miles that have burned in the last year,” he said, referring to wildfires that have wreaked havoc in various parts of the world this summer, including Greece and Hawaii. 

Praising India’s G20 leadership for its “focus” on multilateral development banks (MDB), Summers highlighted their pivotal role in arresting climate change.

Multilateral development banks, such as the World Bank, are international financial institutions designed to aid economic and social development in developing countries. MDBs play a key role with regard to climate finance — investments made to mitigate carbon emissions and ameliorate the effects of climate change. 

 Summers also advocated for energy transition. “It is within reach to provide for ample and abundant energy, that is renewable, not destructive of the world’s climate, and is available for all the world’s people,” he said, adding that he is “far more optimistic” about climate solutions than he was a decade ago.


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‘Renewable energy need of hour’

Summers was previously of the opinion that emissions could be lowered by increasing the price of carbon. However, he said he realised that “the world’s people are not going to accept a vast and sharp increase in the price of energy,” particularly developing economies, who are known to have borne the brunt for changes to the climate induced by developed nations. 

Foregrounding affordable renewable energy as the need of the hour, Summers hoped that vigorous and aggressive competition would  bring down the cost of “everything” associated with renewable energy, including materials, such as batteries for electric vehicles. He also called for an increased international cooperation on this front, such as the formation of an International Renewable Resources Agency, similar to the IEA. 

 “I believe that coal should not be used in the production of electricity anywhere on this planet,” he added. 

“There needs to be much more speed and more ability to adapt to the rhythms of the private sector,” he said, drawing a comparison between development banks and private sector enterprises. However, he also criticised the private sector, particularly for its overuse of carbon offsets — an action meant to offset carbon emission into the atmosphere —  which are considered a dubious practice. 

According to Summers, it would also be “useful” to call out private companies for what are “shady activities” in the name of green causes. 

(Edited by Smriti Sinha)

Also read: Finance Ministry says rising oil prices a concern, but economic outlook ‘bright’ in monthly report


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