The Hindu Business Line : India's more globally engaged today: PM

CHANGING THE MINDSET: The Prime Minister, Dr Manmohan Singh, with the Director & Chief Executive, ICRIER, Dr Rajiv Kumar, and the former Finance Secretary, Mr Vijay Kelkar, at the ICRIER's Silver jubilee conference on `India and The Global Economy' in the Capital on Monday. - Ramesh Sharma

New Delhi, Nov. 6

The Prime Minister, Dr Manmohan Singh, today deplored the postures of political parties that were "based in the past and out of line with India's current interests as an increasingly globalised integrated economy" when India is "destined to be more globally engaged".

Delivering the keynote address on a two-day conference on India and the Global Economy organised by the Indian Council for Research on International Economic Relations (ICRIER) to mark the silver jubilee of the economic think-thank, the Prime Minister said India's energy security was closely intertwined with "our political relations with a wide range of countries around the globe". He said India's food security, technological security and national security were all closely linked to developments around the world.

However, Dr Singh felt that there was "inadequate recognition at home abut the increasing interdependence between India and the world and the consequences thereof for our domestic policies".

Dr Singh voiced his "disappointment by the lack of adequate appreciation including among political leaders of the changing nature of our relationship with the world and with the region around us". Hence he urged think-tanks like ICRIER to invest in informing and shaping public opinion and policymaking in this regard.

No external constraints

Recalling his oft-repeated remarks that there were no binding external constraints on India's economic growth but only internal constraints, Dr Singh said this does not mean external developments or trends might not re-emerge as constraints to growth process. "We must remain prepared at all times to deal with many external challenges to development process, develop the necessary analytical tools to forecast global trends and their implications for us and design policy response systems for our needs", he added.

Setting out the agenda for ICRIER on the external front, Dr. Singh suggested that "we need to examine the effects of the large number of free trade agreements we are entering or planning to enter into", besides evolving a better understanding of the geo-political dynamics which are giving rise to a new range of economic relationships. He said ICRIER should consider acquiring a deeper understanding of China, which would be of immense value to "our economic planners, diplomats and the policy makers".

He also called for a better understanding of the safe limits for capital flows from abroad and analysis of competitiveness in the light of technological changes, marketing, financing and service delivery with enormous implications for domestic firms.

The Prime Minister said "we need to know the extent to which principles that drive liberalisation in goods trade apply to services trade" as India needs to have a deeper knowledge of its relative strengths in many services such as entertainment, business services, retailing, finance and banking, construction, education and health.

"We need to have a better understanding of this complex area, particularly in view of its employment potential and our strengths in some services," Dr Singh said.

With a great deal of optimism about India in seminar halls and boardrooms across the world and as the Indian economy modernises and grows, the Prime Minister said "we should expect a reverse migration of talent especially from within the Diaspora". Researchers at ICRIER must engage the likely implications of various sectors and regions of such a `reverse brain drain".

Without directly referring to the controversy over exporting minerals such as iron ore to multinationals who might establish manufacturing base for value addition here, the Prime Minister said that "we need to study far more deeply the characteristics driving trade in natural resources and energy, the impact of global economic relationships on this trade and the perceived drive by some countries for securing sources of energy and minerals in third countries and the implications of this for free markets in these goods".