Sustainable development – driven by use of renewable energy – and the resolution of income inequalities via financial inclusion measures like Jan Dhan accounts will be key as India bids to become a $5 trillion economy, State Bank of India Chairperson Dinesh Khara told NDTV. India, Mr Khara stressed, had “shown the way to the world” with remarkable growth since independence, particularly in the last decade, and is well-placed to continue on that path.
Speaking on the sidelines of the B20 Summit in Delhi – a meeting of top business leaders ahead of next month’s G20 meet – he also stressed on the stability of the India’s banking system after the three United States banks collapsed in March. Mr Khara said India is “immune as far as contagion is concerned” and that “… compared to West, where it is lighter for banks, here we have brought in NBFCs and everyone else into regulatory ambit of the Reserve Bank of India.”
“India has shown the way to the world… here is a country that can move so fast with a large population. We saw that it took almost 54 years to break the first trillion-dollar GDP-barrier… thereafter it took only six to seven years to add another trillion and, today, we stand at $3.7 trillion and are the fifth largest (economy) in the globe,” the SBI chief said.
India’s Bid To Be $5 Trillion Economy
“I think this is a very remarkable story… going forward, almost $850 billion in GDP is getting added every year. This gives confidence we will be a $5 trillion economy by 2037 for sure.”
“If you look around and see the levels of growth… one of the key themes here (at the B20 Summit) was sustainability and environmentally sustainable goals (ESG) and I think this is very important for Indian economy,” he said, “Today, everywhere you see solar panels (and) that is nothing but an indication of how we will conserve fossil fuels and limit their import.”
“And, straight from here, we can go to climate change… I feel these initiatives have perhaps not been seen in such magnitude anywhere else. If you look at growth of renewable energy, EVs and battery storage in such a short time, it is something to showcase to the world.”
Financial Inclusion As Key For Growth
On financial inclusion, Mr Khara stressed India is aiming at inclusive growth and that wide-ranging measures for this are being implemented, including the spread of Jan Dhan accounts and insurance and availability of social security benefits.
“These are what have led to a situation today where ‘zero balance accounts’ have an average balance of almost Rs 3,000… almost Rs 10 trillion worth of financial savings are being channeled into the mainstream. I think these are what have achieved inclusive growth.”
The SBI chief was also asked about a report by his bank that said per capita income will grow seven times by 2047. However, calculations suggest this increase, after accounting for inflation, will be just two times assuming an annual inflation rate of 5 per cent, which is the average of the last 10 years’ inflation rates.
On whether growth will truly be equitable, Mr Khara said he expects incomes to grow faster and inflation to be contained after a point of inflection and as India becomes developed.