India, the largest democracy of the world, is all set to become major economic power says Prof. Aman Agarwal while delivering a keynote speech on “Globalisation and International Capital flows” at the National Conference on Globalisation-Decadal Indian Experience in Kannur.

According to him, India faced its worst ever financial crisis in 1991 when its foreign exchange reserves fell below one billion dollars, inflation rate was as high as 16.7 percent, suffering from high fiscal deficit, high unemployment rate and several other economic weaknesses and other odds.

However, he feels India has successfully launched and handled its economic reforms process of privatization and liberalization to bring about macro economic stabilization despite the US sanctions. Its foreign exchange reserves have crossed 100 billion dollars; fiscal deficit is within tolerable limits, growth rate of 7 percent expected for the current year; the rupee is gaining strength despite RBIs intervention, banking and financial institutions have improved, BSE Sensex has crossed over 6000 points from low level of 3000 six months ago. Overall outlook of economy is encouraging asserts Prof. Agarwal.

Prof. Agarwal strongly feels India’s entry and sustained growth in the last decade opens up immense possibilities for becoming a truly favoured global nation and economy. India has benefited from the old heritage (dating back to 7000 years), traditional value system and economic and societal norms. These have empowered India and Indians to accommodate and adjust with changing times and scenarios over the history.

According to him, It has been observed that all large multi-ethnic societies, after attaining the status of development, lose interest in removing poverty, especially when poverty is associated with ethnic and cultural groups that lack or lose political clout. The issue of poverty is a paradox of plural democracy when it is wedded to global capitalism says Prof. Agarwal. And the paradox is both political-economic and moral.

The gradual privatization and the consequent need to regulate investments, the growing importance of private investment and the emergence of the mixed-market economy are some of the characteristics of the political economy of India resulting from its engagement with the global economy in the 1990s. “If we are really talking of a globalized world, then we need to free ourselves of these barriers and allow the market mechanism to freely flow and be part of this large society” says Prof. Agarwal.