In an exclusive interview, the Director of World Bank India, Auguste Tano Kouamé, emphasized the imperative need for India to increase the participation of women in the workforce to a level of 50% in order to propel its economic growth and reach the coveted $5 trillion economy status. In this enlightening conversation, Mr. Kouamé delved into the consequences of India’s inclusion in global bond indices and the key drivers for India’s growth. Here are the excerpts from the interview:
India, despite being the swiftest growing emerging market, faces a slowdown in private investment and consumption. What, in your view, will be the drivers behind India’s future growth?
Acknowledging India’s commendable growth amidst a challenging global backdrop, Mr. Kouamé pointed out that India’s economic expansion reached 7.2% last year and is anticipated to grow at 6.3% in FY24. However, to attain the ambitious goal of becoming a $5 trillion economy by 2028 and an advanced economy by 2047, an annual growth rate of 8% is imperative. While the global environment plays a pivotal role, Mr. Kouamé highlighted the need for global cooperation to tackle challenges such as inflation and geopolitical tensions. He also emphasized the importance of nurturing private investment, reskilling the workforce, ensuring access to financing for micro, small, and medium enterprises (MSMEs), and addressing challenges related to factors of production like land.
The inclusion of Indian bonds in JPMorgan’s government bond index for emerging markets is projected to attract substantial investments. What are your insights on this development?
Mr. Kouamé concurred that India’s inclusion in the JPMorgan Emerging Market Bond Index could draw investments of around $25 billion or more. He stressed that even before the actual inclusion, the announcement and anticipation alone could attract investments of up to $7 billion. This inclusion would enable Indian corporations to raise funds globally, facilitating investments in various regions like Asia, Europe, America, Africa, and Latin America. It signifies a significant shift in how businesses in India engage with global standards and conduct international operations.
The World Bank has consistently advocated for increasing female participation in the workforce, particularly in countries like India. What role does this play in India’s growth?
The Director of World Bank India underscored the critical importance of enhancing female workforce participation. According to World Bank analysis, elevating India’s female labor force participation from the current 25% to the national average of 50% could contribute an additional 1% to the GDP growth. Mr. Kouamé described this as a “low-hanging fruit” and asserted that achieving this target could help India attain its desired 8% growth rate without the need for substantial capital investments. Moreover, he highlighted that this approach would have a positive impact on the macroeconomy by addressing inflation concerns. However, he also emphasized the need for fair compensation for female workers to ensure that increased demand is met with increased supply.
As automation, technology, and artificial intelligence (AI) reshape industries, what should be India’s focus for sustained growth?
Mr. Kouamé acknowledged India’s ambition to increase the share of manufacturing in GDP from 17% to 25% by 2030. He emphasized that manufacturing and services are not mutually exclusive and that India should blend its manufacturing sector with modern technologies like AI and IT, areas where India holds global leadership. To boost manufacturing, he stressed the importance of addressing state-level constraints and connecting local investors with global counterparts. Mr. Kouamé also highlighted the World Bank’s role in supporting these efforts.
Mr. Kouamé also discussed the World Bank’s vision, emphasizing the need to eliminate poverty within the framework of a sustainable planet. He highlighted the necessity of internal reforms to expedite project preparation and implementation and attract additional resources from outside the MDB systems, such as the private sector.
In conclusion, Mr. Kouamé offered a comprehensive perspective on India’s growth prospects, underlining the critical role of female workforce participation and the need for a multifaceted approach to achieving sustained economic growth.
