Economist and author Nikhil Gupta is of the opinion that India needed to save more over the next two decades if it wanted to grow its economy at 8 per cent.
Author of ‘The Eight Per Cent Solution’, Gupta made a presentation on his book and fielded questions from an audience which largely comprised students of Commerce and Economics at the International Centre Goa (ICG) on Friday morning.
Gupta identified the household (homes and small businesses), the corporate sector, the government and foreign trade as the four key players which make or break any economy.
“The household and corporate sector in India needs to increase its savings and the state and central governments need to reduce their debt if the country as a whole has to save and maintain a steady rate of growth,” Gupta said.
Gupta observed that savings in India had dropped significantly. “The government must encourage a spirit of savings in the household sector to spur economic growth. The government must also reduce its own debt by encouraging the private sector to invest more in infrastructure projects,” Gupta said.
Gupta was of the firm opinion that the government must privatise sectors like defence, railways and road building to reduce its own debt.
“Savings are primary source for funding investments and investments in turn helps the gross domestic product (GDP) growth in any country. Plain consumption alone cannot help an economy to grow,” Gupta said.
Gupta was critical about USA’s overtly debt oriented economy. “The USA is not a good role model for any emerging economy. Today they are waiving off massive student loans. The cracks will appear very soon and in 4-5 years, USA will face a big economic crisis,” Gupta said.
