Organisation for Economic Co-operation and Development (OECD) secretary general Angel Gurria said on Tuesday that India’s credit rating must be upgraded but said in the same breadth added that rating agencies are dithering to do so because they were so wrong in the past, and also part and parcel of the economic crisis of 2008 by giving AAA rating to mortgages.
“When you are burnt with milk, you even drink butter-milk with caution,” Gurria said.
“The world has not grown even eight years after the energy crisis, trade is growing at two per cent. I am not predicting a recession, but the condition is pretty difficult. Investment flows are not recovering, certainly not in Europe. Even South East Asia and China are witnessing slow growth, and countries like India are also facing a challenges as it is easy to row with the tide but difficult when you have to row against,” Gurria added.
The OECD secretary general said that Latin America is coming out of two years of recession, while the Economic Survey of India is predicting 7 per cent growth for India, which is four times OECD growth and is the fastest growing of the G20 economies.
Gurria said that from a global perspective, demonetisation is a small deal but GST reform in India is a big deal. India is one of the top reformers and is akin to winning the top reformer gold medal. “The results of reforms are witnessed in 2,3 or 4 years. India is also working to arrest tax evasion. The budget deficit is under control,” Gurria said.
One of the worrying factor is that female participation in labour market has come down from 37 per cent to 27 per cent in India. Gurria said that India fascinates him as one single state, namely, Uttar Pradesh, is larger than every OECD country except United States of America.
Gurria said that OCED has signed a Memorandum of Understanding (MoU) with Confederation of Indian Industries (CII) and is working with the latter on integration of India in global value chains. In addition OECD is also working securities and Exchange Board of India (SEBI) on financial inclusion for women, with the Competition Commission of India (CCI) for fostering healthy competition practices and with The Energy and Resources Institute (TERI) for green growth knowledge platform.
Gurria hailed CII’s contribution as an active member of the Business and Industry Advisory Council (BIAC) of the OECD and the B20. Quoting Prime Minister Modi, Gurria said, “We must walk together, work together, progress together.”
Talking about India’s contribution to green development, CII director general Chandrajit Banerjee said that India has the largest number of green rated buildings in the world outside of America.