India - Budget 2022/23 as a step towards global economic leadership

On February 21, 2022 the School of International Regional Studies of the Faculty of World Economy and International Affairs, HSE University, within the framework of the permanent online seminars “Contemporary Area Studies”, organised a meeting with MBA from the University of Chicago, Ph.D. in Economics, a specialist in socio-economic development of India Alexander Lopatin.

The event was moderated Murad Sadygzade, visiting lecturer, School of International Regional Studies of the Faculty of World Economy and International Affairs, HSE University.

Alexander Lopatin began his speech with a thesis about the ambitious economic plans of the Indian leadership. It has been noted that during the reign of Narendra Modi the state set the goal of achieving an unprecedented turnover for the national economy of 5 trillion. dollars by 2025. However, due to the ongoing pandemic, the real prospects for achieving these indicators have shifted to 2027.

The audience was given a historical overview of the evolution of the Indian government approach to economic orientations since the end of WWII. It was mentioned about the "Bombay plan", which outlined the main strategic prospects for the development of the Indian economy in the post-war period. The architecture of this economic program was explained in detail: intersectoral balance, severe restrictions on foreign exchange transactions, a high level of state intervention in the economy and price regulation. The crisis of the system emerged at the beginning of the last decade of the 20th century. It caused the liberalization of currency legislation, the simplification of obtaining licenses in industrial production and the opening a "window" for the flow of foreign investment. Finally, the modern conceptual principles of New Delhi's approach to its own economy were formulated in 2015 with the launch of the 3rd growth strategy. Their essence was, first of all, in the transition to the management of the Indian economy as a corporation: the rejection of planning and the choice in favor of the implementation of specific, clearly defined projects.

The lecturer also identified the prerequisites leading to the reality of a doubling of GDP. They were the increase in the population, as well as the fact that two thirds of the country's population is under 35 years old, which is a factor in the potential productivity of this kind of workforce. In addition, the simplification of the tax reporting system and the introduction of transparent tax schemes contribute to economic development. The policy of interaction between the central government and the regions makes it possible to form project financing that is convenient for all agents. Attention is paid to the development of a digital network throughout the country, a system of tax preferences for start-ups.

The lecturer also touched upon the issue of the current economic situation in India. The country's GDP is based on the active interaction of two types of agents - private and public. The basis of GDP is now agriculture and industry. Taxes, having increased in absolute terms, as a percentage of GDP remain at the pre-reform level that is the state managed to make the tax system transparent without actually increasing the tax burden. Government spending goes to the development of targeted programs.

At the end of the lecture, the listeners were able to learn the trajectory of the Indian economy in the field of strategic perspectives. The country's main trend here is a long-term reliance on autarky in specific priority sectors as well as on development after self-sufficiency of export potential. India is concentrating on expanding the domestic and foreign market, as well as taking a pioneering position in world technological progress. The basis for this will be agriculture, where the state is already establishing a dialogue responding flexibly to farmers' requests. Preferences in this regard are also given to the textile industry, pharmaceuticals, and intellectual property. This choice is related to the high development of private Indian companies in these industries. In conclusion, it must be answered that the main advantages of the country's leadership approach to the economy are public-private partnerships, which develop already to a certain extent successful initiatives, as well as a project-oriented approach that focuses on clear timescales and agreed project budgets, and, among other things, makes it possible to clearly identify the official responsible for it.

After the lecture, the audience had the opportunity to ask their questions. During the section the problem of personal data security in the high-tech sector of the Indian economy and the environmental component of the country's economic growth were touched upon.