India is making the second largest contribution to the extra 2 percentage points growth that the G20 Finance Ministers agreed upon earlier this year to add to the global economic output, said Suresh Prabhu, Sherpa to Prime Minister Narendra Modi at the G20 Leaders Summit. The G20 countries account for almost 85 per cent of the world economy.
“We are doing all the right things now and our policies will add significantly to the global economy,” Prabhu told The Sunday Express. India is expected to grow between 5.4 per cent and 5.9 per cent in 2014-15 after having clocked 5 per cent in the previous year.
According to Prabhu, who was recently assigned the Railways Ministry, India received wide appreciation for having reached a deal on the WTO’s Trade Facilitation Agreement. “In doing so, we have also addressed our own food security concerns,” he said, adding that people would be at the centre of reforms pursued by the government.
A major policy measure that India has already moved on relates to reforms in the labour market, to give more flexibility to companies in hiring. While the central government has already proposed changes in related laws, some states like Rajasthan have received presidential assent for amendments to their labour laws.
The G20 countries had agreed to increase world output by an additional two percentage points over the next five years. All countries were required to prepare a detailed action plan and commit to develop new measures to achieve this. India too has prepared a plan, details of which are being presented at the G20 Leaders’ Summit.
India perceives that the world is still in the shadow of weak economic growth. The World Bank cut its 2014 global economic growth forecast to 2.8 per cent in June this year from 3.2 per cent and the International Monetary Fund lowered it 40 basis points to 3.3 per cent in October.
At a meeting of BRICS leaders ahead of the G20 Summit, Modi said this, and the impact of political turmoil, security challenges and the Ebola virus, has affected growth in developing countries. Sharing his world view, he said there was a need to revive global economic confidence, boost growth and create jobs. “India wants to go on a positive trajectory of growth and G20 can support this,” Modi said.