An changing demographic dividend, a quickly growing digital economy, and GDP growth rates that rank among the world's leading economies position India to witness a strengthening of its economic and geopolitical prominence in the next decades. Earlier this week, at Bennett University, a group of eminent economists, including Nobel winner Michael Spence, reached this unanimous conclusion.
As someone who has spent the last quarter of a century contemplating growth in many forms across the globe, I must state that India's economy has the greatest potential for growth, as Spence put it during his interview with ET Now. By all measures, India's financial infrastructure and digital economy are second to none. What we have here is a truly revolutionary design.
He went on to say that India's technology advancement will propel the country's economy and put it in a prime position to influence global politics.
During a question and answer session, Spence clarified that cryptocurrency is not the same thing as money. He explained that money serves as both a medium of exchange and a store of value. If its value fluctuates by 20% or 30% every week, it's hard to see it as a reliable investment. For individuals seeking anonymity on the Darknet, it is merely a medium of exchange.
Central bank digital currencies were discussed by the Nobel laureate. For the most part, they function similarly to conventional currencies under the jurisdiction of central banks. Difficult data security issues will be resolved by them. Digitalization is sweeping throughout entire economies and financial institutions, including currencies. No central bank will ever be able to control an economy that uses its own currency.
Several of the other speakers on the panel emphasized the increased prominence of India internationally. A source of optimism, according to Rob Johnson, president of the Institute for New Economic Thinking (INET), is India's position at the forefront of technological transformation.
A plethora of shocks, including pandemics, geopolitical tensions between the US and China, and climatic shocks, are causing the relatively open global economic system that has existed for more than 70 years to collapse, according to Spence. According to him, there has been a "regime change in global economy" and the globe is currently experiencing a period of great upheaval.
For the past 30 years, we have been oblivious to this world's peculiarities and sensations. With "regime change" and "disruption," Spence meant exactly that.
Rohinton Medhora, who chairs the governing board of INET, has stated that intellectual property and intangible assets constitute a substantial portion of the world's wealth. Intangibles are the true wealth creators. A lot of governments still haven't figured out how to run an economy when the majority of wealth is in intangibles, fixed costs are high, and marginal production costs are almost zero.
If it's really important, businesses will understand. But existential is frequently still ten, twenty, or thirty years after the fact. Due to a lack of resources and longevity, very few businesses can maintain such a long-term perspective. A capital market that supports such an outlook is necessary, according to Medhora.
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