The forces of liberalisation and globalisation have transformed the Indian economy in the past three decades. Prime Minister Narendra Modi’s government has accelerated these trends by implementing a set of far-reaching reforms, which have led to macro-economic stability, a robust safety net for all and strong growth. We now have one of the most open market economies in the world and are poised to get to $5 trillion in GDP in the next few years.
We must now consider how our economy can deliver sustainable prosperity in the next few decades. Just as liberalisation and globalisation transformed the economy in the past, two different yet intertwined forces will likely transform the economy in the future. First, India must have globally leading companies across a range of key sectors such as financial services and manufacturing. These super competitive businesses should define the global productivity frontier so that they can surpass the production processes of the best companies in the world. Second, India must also adopt a resource-efficient, low-carbon development pathway to utilise scarce natural resources effectively. There is no other way. Apocalyptic air pollution, dire water shortages, rising temperatures, and extreme climate events have already brought us to the brink of an environmental crisis. Moreover, note that the world needs India’s leadership to achieve the 2 degree Celsius global warming target. In short, India’s growth has to be green.
No nation has ever attempted these twin transformations — high competitiveness and long-term sustainability — simultaneously. The traditional development model has been a farm-to-factory development model with economies transitioning from traditional agriculture to resource-intensive, urban manufacturing. India has to forge a different development model — one that will shift India’s workforce from agriculture to globally leading, resource-efficient businesses. Also, these companies must use the most advanced green technologies and business models. India’s development model will, therefore, need to take the Indian economy from “the farm-to-green frontier”.
Opinion | Poonam Mahajan writes: We need a new Green Revolution — one that focuses on the environment
The Modi government has made impressive progress in ending crony capitalism and strengthening entrepreneurial forces. India has the third-largest start-up ecosystem in the world and our larger companies are also pursuing innovation-driven growth. The productivity transformation driven by super competitive businesses is well underway. We now need to consider a comprehensive policy package that will enable us to simultaneously undertake a green transformation. Global best practices and India’s own experiences suggest three focus areas for such a transformation.
First, specific and stable policy goals need to be established to set detailed green targets for various sectors. A macro-economic model that factors in current skills, sectoral connections, relative emissions, and financial constraints is necessary to inform such targets going forward. Such a model can then be used to evaluate various green growth scenarios. Decarbonisation approaches in the green frontier scenario will drive the growth of green industries, green jobs, green skills, green entrepreneurs and green finance.
Global and Indian experience highlights that green targets will have to be pursued in a stable manner across decades. Most large emitters and pollutants are associated with long-lived (20-30 plus years useful life) assets. Investments in green assets will only be possible if there is sanctity of contracts, pricing stability, and consistent policies that are backed up by the full force of law. Finally, these specific and stable policy goals need to be implemented urgently to avoid lock-in with high-carbon assets.
Second, India may need to revamp its existing institutional framework for environmental governance in order to align it with the country’s green transformation. As demonstrated by global best practices, a comprehensive institutional framework could include four levels — super sovereign, sovereign, state/province and city. An independent council or board may also be required to monitor, report, and verify green targets.
The
forces
of
liberalisation
and
globalisation
have transformed the Indian
economy
in the past three decades. Prime Minister Narendra
Modi
’s
government
has accelerated these trends by implementing a set of far-reaching reforms, which have led to macro-economic stability, a robust safety net for all and strong
growth
. We
now
have one of the most open market
economies
in the
world
and
are poised
to
get
to $5 trillion in GDP in the
next
few years.
We
must
now
consider how our
economy
can deliver sustainable prosperity in the
next
few decades.
Just
as
liberalisation
and
globalisation
transformed the
economy
in the past, two
different
yet
intertwined
forces
will likely transform the
economy
in the future.
First
, India
must
have globally leading
companies
across a range of key sectors such as financial services and manufacturing. These super competitive
businesses
should define the
global
productivity frontier
so
that they can surpass the production processes of the best
companies
in the
world
. Second, India
must
also
adopt a resource-efficient, low-carbon
development
pathway to
utilise
scarce natural resources
effectively
. There is no other way. Apocalyptic air pollution, dire water shortages, rising temperatures, and extreme climate
events
have already brought us to the brink of an environmental crisis.
Moreover
, note that the
world
needs
India’s leadership to achieve the 2 degree Celsius
global
warming
target
. In short, India’s
growth
has to
be green.
No nation has ever attempted these twin
transformations
— high competitiveness and long-term sustainability —
simultaneously
. The traditional
development
model
has been a farm-to-factory
development
model
with
economies
transitioning from traditional agriculture to resource-intensive, urban manufacturing. India
has to
forge a
different
development
model
— one that will shift India’s workforce from agriculture to globally leading, resource-efficient
businesses
.
Also
, these
companies
must
use
the most advanced
green
technologies and
business
models
. India’s
development
model
will,
therefore
,
need
to take the Indian
economy
from “the farm-to-green frontier”.
Opinion |
Poonam
Mahajan
writes: We
need
a new
Green
Revolution — one that focuses on the environment
The
Modi
government
has made impressive progress in ending crony capitalism and strengthening entrepreneurial
forces
. India has the third-largest
start
-up ecosystem in the
world
and our larger
companies
are
also
pursuing innovation-driven
growth
. The productivity
transformation
driven by super competitive
businesses
is well underway. We
now
need
to consider a comprehensive
policy
package that will enable us to
simultaneously
undertake a
green
transformation
.
Global
best practices and India’s
own
experiences suggest three focus areas for such a transformation.
First
, specific and stable
policy
goals
need
to
be established
to set detailed
green
targets
for various sectors. A macro-economic
model
that factors in
current
skills
, sectoral connections, relative emissions, and financial constraints is necessary to inform such
targets
going forward. Such a
model
can then be
used
to evaluate various
green
growth
scenarios.
Decarbonisation
approaches in the
green
frontier scenario will drive the
growth
of
green
industries,
green
jobs,
green
skills
,
green
entrepreneurs and
green
finance.
Global and Indian experience highlights that
green
targets
will
have to
be pursued
in a stable manner
across decades. Most large emitters and pollutants
are associated
with long-
lived
(20-30 plus years useful life) assets. Investments in
green
assets will
only
be possible if there is sanctity of contracts, pricing stability, and consistent
policies
that
are backed
up by the full
force
of law.
Finally
, these specific and stable
policy
goals
need
to
be implemented
urgently
to avoid lock-in with high-carbon assets.
Second, India may
need
to revamp its existing institutional framework for environmental governance in order to align it with the country’s
green
transformation
. As demonstrated by
global
best practices, a comprehensive institutional framework could include four levels — super sovereign, sovereign, state/province and city. An independent council or board may
also
be required
to monitor, report, and verify
green
targets
.