Commerce and wealth were intrinsic to India’s DNA for several centuries and the country’s economic demise began when it moved away from these values, Chief Economic Adviser K V Subramanian said on Tuesday.
Citing British economist Angus Maddison’s painstakingly put research on GDP contribution by major economies from 1 AD to 2008 AD, Subramanian said India contributed at least 33 percent of global GDP for 17 centuries while the United States, which is the most powerful country today, is dominant only about half a century.
Subramanian was delivering a virtual address, ‘The power of India's native economic ideas’ as part of the Distinguished Thought Leader Series organised by the Great Lakes Institute of Management (GLIM).
“India’s traditional economic thinking emphasises enabling markets, trade and eliminating obstacles to economic activity. Profit was never used as a dirty word,” he added.
However, he also quoted several verses from ancient Indian literature highlighting the importance of ethical wealth creation. “India’s vision for economic development is akin to a tripod with its three legs focused on growth and efficient welfare, ethical wealth creation and a virtuous cycle of growth.”
Noting that undermining the market economy during the colonial era has led to fall, Subramanian said that India got back its DNA since the economic liberalisation in 1991.
Highlighting the importance of opening up the economy, Subramanian, in a presentation, highlighted the exponential growth in freight and passenger traffic in roads (an open sector) versus the relatively lower growth in railways (a closed sector).
“There are so many such examples such as telecom, airlines etc., where the evidence of opening up and enabling markets and government getting away from business has really helped the economy,” the Chief Economic Adviser added.