Excerpts from an interview with Anubhuti Vishnoi:
On India’s G20 presidency
I do think it will be a very important year and a half for India’s leadership in the world and it is very good timing for the world that India will be at the G20 presidency just at a moment when we need a turning point. We need a change and India will make a big difference in bringing that about. It won’t be easy, but I think India is in a special position to make a difference. I had a very instructive and engaging discussion with the prime minister. He is very focused on sustainable growth and inclusive development, and this was reflected in his speech at Glasgow. I think it will continue to be strongly reflected in G20 as well.PM Modi indicated that he saw G20 as a turning point, especially given the challenge that heads of governments are faced with in restoring growth after a decade of the global financial crisis and then the pandemic. He emphasised that the need was to think of development beyond the narrow economic and financial sense and more holistically about sustainable, resilient growth that includes human development. If you look at the PM’s speech on Friday (at the Arun Jaitley Memorial Lecture), he emphasised on the importance of inclusiveness, on the importance of investment in the private sector and how it is interlinked with growth and development. Those are the themes that give specificity of overall idea of sustainable, inclusive development and guide the kind of investment and governance you need.
On ‘funding’ as a key talking point at G20
It is not a talking point, it’s a decision point. To get that kind of development going, which is sustainable, resilient, and inclusive, particularly for infrastructure for a new form of growth, support is required from rich nations and from international investment.
What is the scale of such an investment? It is estimated that across the world, emerging markets and developing economies, excluding China, would need an additional investment of $2 trillion per year by 2050. It is reasonable to suppose that perhaps half of it can be internally financed but you are still talking a trillion dollar of inflows — a number PM Modi also talked of at Glasgow.
It is very clear that international financial institutions have to increase the scale of financing by factors 3, 4 or 5 in this decade but that will need a decision by the G20. The shareholders have to decide and tell International financial institutions what they want and then support them in borrowing more and raising capital. It is actually a fairly modest sum. I am confident that India will lead that discussion (at G20). Janet Yellen, US Treasury Secretary has also raised the issue.
On domestic funding
So, how does a trillion-dollar investment come about? It will be mostly private sector but the latter is understandably quite cautious about risk and its management. So, the key is to create an ‘investment climate’ in nations seeking that inward investment so that there is confidence. At the same time, finance has to be organised in a way that risk is managed and reduced. For instance, in electricity, companies must be confident that investment will return. Basically, you need international financial institutions to help reduce, manage and share that risk and sometimes their presence gives confidence as well.
India’s growth trajectory
I did talk with the PM on how strongly India is moving and the remarkable expansion of renewables, the opportunity in green hydrogen and how India’s talents in technology and entrepreneurship were an important asset. India has set the net zero target and my guess is, that it will get there before. It is also essential and crucial that infrastructure development happens. 80% of the infrastructure India will need for 2050 is yet to be built. India has to get going quickly and keep going, like ‘running a marathon’.
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