July, 2019

Greetings, On July 5, Finance Minister Nirmala Sitharaman presented the Union Budget 2019, setting the tone for the next five years of the Indian economy. The slowdown in economic growth has been the subject of furious debate, with opinions sharply divided. It is, however, clear that India needs to maintain a sustained growth rate of 7 to 8% – an ambitious but achievable target – if it aims to eliminate poverty and achieve upper middle-income status in the near future. Last week, we launched a new report by Distinguished Fellow Rakesh Mohan that traces India’s growth trajectory and focuses on centring economic growth as a primary policy objective. The report lays out clear policy recommendations, from increasing savings to rekindling investments, to propel growth. We also launched a state of the sector report on the potential of impact investing in India that presents early trends and offers concrete suggestions on maximising impact. The report is a must-read for every one whose work links to this sector, including corporate trusts, non-profits, multilaterals and the government. Following Prime Minister Narendra Modi’s meeting with U.S. President Donald Trump at the G20 summit, where they discussed global and bilateral issues, including 5G and Iran, I wrote an op-ed in the Indian Express arguing that India should use its ‘soft’ power to mediate between the U.S. and Iran, because the consequences of non-intervention could be staggering. These were some of the highlights of the ongoing work at Brookings India; more details on our events and studies are provided below, as well as on our website brookings.in. We appreciate your support and hope for your continued encouragement of our work. Warm regards, Vikram Singh Mehta Chairman, Brookings India

Moving India to a new growth trajectory: Need for a comprehensive big push The paper by Rakesh Mohan discusses the need to focus attention on the primacy of growth as a policy objective. It is now more than 25 years since the last set of economic policy reforms were initiated. As the achievement of annual economic growth of about 7% has almost become commonplace, the country is now in danger of suffering from a degree of complacency. If India is to achieve its rightful place in the comity of nations to be among the three largest economies in the world by about 2035, the time is now right for it to aspire to further elevation of its growth trajectory to the next level. This paper details key macroeconomic management issues of increasing savings, tax collections and infrastructure investment to take growth back to 8-9%. It also highlights the need to maintain a realistic exchange rate, revive the manufacturing sector to boost internationally competitive exports while expediting labour reforms, and rebuild growth promoting governmental institution.

The promise of impact investing in India According to a recent analysis by the Global Impact Investing Network (GIIN), over 1,300 organisations manage $502 billion in impact investing assets globally. The impact investing sector in India attracted over $5.2 billion between 2010 and 2016, with over $1.1 billion invested in 2016 alone. With an active social enterprise space and an engaged investment market, impact investing takes advantage of private sector efficiency and capital to achieve public sector goals. A new Brookings report, The Promise of Impact Investing in India, by Shamika Ravi, Emily Gustafsson-Wright, Prerna Sharma, and Izzy Boggild-Jones, analyses this emerging sector and its potential to achieve social good.

Events 📆 Brookings India hosted a development seminar at the launch of “The Promise of Impact Investing in India”, the first, comprehensive state of the sector study on impact investing in India based on a survey across sectors including health, education and agriculture. Panelists: Shamika Ravi, Research Director, Brookings India; Baijayant Panda, National Vice President and Spokesperson, BJP; Richard Hawkes, Chief Executive, British Asian Trust; and Geeta Goel, India Country Director, Michael and Susan Dell Foundation. __________________________________________________________________ We also launched the report “Moving India to a New Growth Trajectory: Need for a Comprehensive Big Push”, accompanied by a development seminar by the author on the need to focus attention on the primacy of growth as a policy objective. Speaker: Rakesh Mohan, Distinguished Fellow, Brookings India and Senior Fellow, Jackson Institute for Global Affairs at Yale University. Discussants: Vikram Singh Mehta, Brookings India; Ajit Ranade, President and Chief Economist, Aditya Birla Group and T N. Ninan, Chairman, Business Standard Ltd. __________________________________________________________________                                       Upcoming Event ⏱️ As part of our “Back to the Future” series, on the 20th anniversary of the Kargil War, we are hosting a panel discussion, where former decision-makers will revisit a historic episode in India’s foreign and security relations to draw lessons and improve future policies. The panel will feature officials involved at the time to revisit memories in military operations and in civilian government, as well as the perspective of the media and civilian policymakers. This event will be live-streamed.

More from across Brookings 🌏 India should use diplomatic tools at its disposal to help de-escalate US-Iran tensions By Vikram Singh Mehta Budget 2019: "Ayushman Bharat is a financial instrument, it is as good or bad as the healthcare it can buy" By Shamika Ravi Budget 2019: "The issue of the revival of investment requires a more holistic approach in 2019" By Vikram Singh Mehta Our students are not learning. But are our teachers teaching? By Shamika Ravi and Neelanjana Gupta The United States, India, and the Future of the Indo-Pacific Strategy  By Walter C. Ladwig III and Anit Mukherjee “India must focus on all sectors to achieve 8-9 per cent GDP growth” By Rakesh Mohan More than half of the world’s poor are children By Katharina Fenz and Kristofer Hamel As India extends preschool education to all, incorporate gender sensitivity from the start By Samyukta Subramanian Why are we so pessimistic? By Wolfgang Fengler