Speeches & Transcripts November 4, 2017

Speech by Kristalina Georgieva in New Delhi, India

Namaskar and good morning.

Honourable Prime Minister of the Government of India, Shri Narendra Modi Ji; Honourable Minister of Commerce and Industry; Secretary of Department of Industrial Policy and Promotion; colleagues from the government sector, from the private sector, distinguished participants, dear friends.  

We are here to celebrate a very impressive achievement. In the fifteen years history of Doing Business, a jump of that nature is very rare, but it is particularly rare when we talk about a country the size of India. I understand that, in a cricket-loving nation, hitting a century is a very important milestone, so what we face here is an incredible achievement and it is only appropriate we celebrate it in the hometown of the blue team India!

Today is also a very auspicious day because it is the birth anniversary of Guru Nanak and I was reminded by my colleagues of his very wise words, ‘Whatever seed is sown, a plant of this kind comes forth.’ The team in this room under the leadership of the Prime Minister has sown wonderful seeds - of simplification, of reduction of administrative barriers, a very important seed of using technology, and feedback from those who are on the receiving end of regulations. And what we see is a chance to harvest the fruits of hard work which places the confidence of India one notch higher.

What is very important for us from the World Bank is to recognise that high-level ownership and championship of reforms is critical for success. And there is no better evidence of this than the fact that the Honourable Prime Minister himself is in the room with us. Thank you, Prime Minister.

We have learned that, in reforms, what pays off is persistence. But we also learned that persistence needs to be fed with success. And what we are recognising in India is that this success today is to be turned into more energy in reforms for the future.

Let me make three points in front of this distinguished audience. The first one is that we look at doing business achievements in a broader context. What we are seeing is a remarkable overall success story of India. Extraordinary achievements in the last three decades means that per capita income has quadrupled four times. And it was done with an eye on lifting out of poverty people that have been left furthest behind. 160 million people in recent years left this space of destitution that reduces not only well-being but the ability of people to contribute to their economy. And we know that there is a very strong condition that extreme poverty would be history in India. The target date that was set, 2026, I understand that the Prime Minister intends to shorten to 2022, and given the track record so far, I have no doubt that would be possible. And I have no doubt that when India hits another century – the century of independence in 2047 – most people in India would be part of the global middle class. India will be a high/middle income country.

But that success could only be secured if there is perseverance where it matters the most: reforming the policy environment and the institutional framework to deliver on policies in India. The GST reform creates an incredible opportunity for India to grow through a unified internal market. As a European, I witness how a unified internal market in Europe has contributed tremendously to the well-being of European people and I have no doubt the same would be happening here in India. Matching this ambition is the dedication of India to high quality infrastructure, one that allows this large country to be connected and matches with infrastructure the ambition for internal market.

And in addition, what India is doing today and will do even more in the future is investing in the most valuable asset of any society, its people. Investing in early childhood development, investing in the skills – incredible progress in this area – investing in women to be part of the labour force. There is more space for that, and I know, Prime Minister, you intend to use it. And last, but not least, investing in the health of the nation, including through a very ambitious program in sanitation in rural areas. And that all is combined with a dedication to make sure that India’s federalism works for India, that the strength of cooperative and competitive federalism is a foundation for more progress in the future.

So, let me move to my second point. Where does Doing Business fit in this big picture? Well, Doing Business is a very pragmatic and tangible way to demonstrate that progress is being made and that businesses – and through businesses, the whole of Indian society – is to benefit. We have an impact of reforms on foreign investors. Just in the last three years of your government, Prime Minister, we have seen an almost doubling of foreign direct investment from 36 billion in 2013/2014 to 60 billion this last year. And that, Doing Business underpins quite significantly.

But more important than foreign investment is what happens with domestic investments? What is the well-being of firms in India? We are confident that the ease of doing business is contributing to addressing a particular challenge in India, which is size of firms. In India, nearly two-thirds of private sector jobs are in firms with less than six workers and the most common size of the firm is a person of one. Well, if we want the economy to grow, more jobs to be created, we ought to see an increase of size of firms and their capacity to generate employment, and we believe doing business is contributing and will continue to contribute to that.

And finally, we see Doing Business adding gasoline to this engine of competitiveness among states. I look at the audience; I understand there are representatives of practically all states of India and I wish you all the best competing with each other. May the best state win.

Let me finish with my third and last point, the road ahead. One thing I ought to share with you is that the higher you go, the tougher it is to move even higher. It is like climbing a mountain; you're closer to the top, it is hard. So, it would be absolutely paramount to strengthen the commitment to reforms and to be clear that if we are to see an increase next time around, we have to be not only implementing good reforms, but making sure that the feedback mechanism from those that are beneficiaries of reforms sends the right signal. We have identified a couple of areas – construction permits, property registration, enforcing contracts – as areas where further progress is needed. And it is possible. And I, on behalf of my colleagues from the World Bank – we have our country director here, Junaid, stand up for people to see you. If you need anything from us, this is the man to call. We actually also have our vice president of the region here with us. Our full, unwavering commitment to be with you; ‘A friend in need is a friend indeed.’

Let me in conclusion say that what is happening in India matters tremendously to the Indian people first and foremost, but it matters to the rest of the world. Because of the size of India, because of the significance of India, your success translates into well-being across the globe. We are very keen to be the transmission line of lessons learned here to other places so people in the developing world – in Africa, in Asia, elsewhere – they can benefit from what is being generated and learned right here in India.

You have a bold vision, Prime Minister. It is a vision for India, but it is broader than that; it is a vision for a more prosperous – and as a result, more peaceful – world for all.

Thank you for the chance to be here as part of this celebration and all the very, very best. Namaste.

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