The current economic crisis, said Dr Pruthi, was triggered by the announcement by USA to tone-down the Quantitative Easing it had triggered to tackle the 2007 sub-prime economic crisis. More than 12 trillion dollars were pumped-in by USA as part of the quantitative easing and that kept everyone going since then.
But, was the announcement of QE tone-down the sole cause of the rupee tumbling and the beginning of India’s economic problems. Certainly not, said Dr Pruthi. We wasted the first 40 years after our independence doing nothing for the economy. he said. Since 1991 we did usher-in reforms and that helped to turn the tide. But, these reforms have been half-hearted. Political and bureaucratic controls have not been withdrawn the way they should have been.
To meet the economic crisis head-on, we need to ensure growth. For that we require structural changes, foreign money, infrastructure development and, above all, we need to improve the faith of others in us. The comfort level for investors also needs to be improved manifold.
Reserve Bank of India, he added has very limited options available to it. Besides, he added, it has no control over corruption, import & export and business environment.
Dr Pruthi also felt that in today’s globalized environment the authority of the State is limited, especially in economic matters. Markets have their own mechanisms and reasons to go up or down. They do not listen to any authority. Thus, we need to change our decision making patterns to be able to compete better in the international environment.
Dr Pruthi also emphasized on the need for a strong leadership that respects constitutional authorities. Besides, it is important that we ensure that money is invested in talent and technology development.
Pragmatic foreign policy is another very essential requirement to become economically strong. Dr Pruthi gave examples of USA and Japan post World War-II, as also USA and China in recent years who improved their relations for strategic reasons and thus gained economically. “Practical and intelligent policies only can help us become an economic power”, he said. “Soch (thought process) is important. Soch ko badlo,” he added.
Dr Pruthi’s talk was followed by a Q&A session. PP Arvind Mehan wondered why India has inconsistent and changing policies? Inconsistency is due to lack of will, said Dr Pruthi. Today, the need is to indigenise our Railways, Defence etc requirements to save on foreign exchange and improve balance of trade but nothing much is done on this end.
Rtn G.S. Chawla wondered if India can do without FDI. To this Dr Pruthi replied, “There is no need to restrict FDI. USA thrives because the whole world gives money to it. The need of the hour is to promote savings and restrict imports by indigenisation.”
Rtn Ashok Khanna asked “when can we hope to see stability again.” Dr Pruthi was of the opinion that eventually India is an ideal place for growth. It consumes a big percentage of what the world produces. “All we need to do is to take the right economic decisions and things will improve,” he said.
Dr Pruthi was jointly introduced by PP Man Mohan Singh Kohli and President Hassan Mejie. Rtn Mahesh Gupta presented him a memento. PDG Kawal Bedi presented him a bouquet. Rtn Dr Rajinder Kaur presented a bouquet to Mrs Vanita Pruthi. Vote of thanks was proposed by PRIP R.K. Saboo.
