Press Release

Speech by His Excellency Mr. Pranab Mukherjee, Minister for External Affairs at the 107^th Annual General Meeting of the Merchants’ Chamber of Commerce, Kolkata on “India’s Creditable role in world affairs, while ensuring high economic growth, democratic values and social justice”
(Kolkata; June 14, 2008)

 Hon’ble Shri Bhattacharjee, Chief Minister, West Bengal
Smt. Meira Kumar, Minister for Social Justice & Empowerment,
Shri Churiwal, President, Merchant’s Chamber of Commerce
Distinguished Guests,
Ladies & Gentlemen,

It gives me great pleasure to be here at the 107th Annual General Meeting of the Merchants’ Chamber of Commerce. It is one of the oldest and most prominent chambers in the Eastern India. I must appreciate the organizers of the event in selecting the theme of this year’s Annual Function “India’s Creditable role in world affairs, while ensuring high economic growth, democratic values and social justice”. I can say that India’s international role and our successful growth story, democratic values and our emphasis on social justice draw strength from each other. In our overall development paradigm we cannot isolate these important features from one other.

The objective of our engagement with the world, from the earliest years of our independence, has been to create and maintain an international context that would provide an enabling environment for democratic governance, social and economic development leading to the alleviation of poverty and the fostering of an inclusive society based on equity, justice and prosperity for all our people. Equally our foreign policy has aimed at making a contribution to put in place an equitable, peaceful and stable world order.

India’s growth story is relatively recent. Even though our economic liberalisation began in the 90’s, the fruits started bearing only in the last 4 to 5 years. Now we are a trillion dollar economy growing at an average rate of nearly 9 per cent per annum for the past five years. India with a 300 million strong middle class, a burgeoning market economy with significant investment inflows and robust long-term outlook for its ability to sustain high growth rates, is emerging as an important driver of growth in Asia and the world. At the same time, 220 million people are still waiting to be lifted out of poverty, perhaps the largest population of the poor in the world, although the proportion of population below poverty line declined by more than half from what it was two decades ago.

The world is changing faster than ever. The key driver of this change is globalization. Along with the globalisation the world has witnessed India emerging stronger in both political and economic terms. Most of us are familiar with traditional diplomacy where governments negotiate with governments. Globalization, however, has led to a paradigm shift altering the manner and approach of conducting our foreign economic policy. The information and communication technology revolutions have virtually shrunk the globe. Geography is no longer a buffer. Events taking place across borders near and far, impact in a much more direct manner on us. We are witnessing a phenomenon where countries are becoming more closely interlinked with one another, through the cross-border movement of goods and services, capital and labour, technology and ideas. An integrated world is making economics more efficient and business more competitive.

India, along with the rest of the world has experienced significant, although uneven, economic growth. Globalization has played an important role as a dynamic force for growth. However, its impact has left us with a world beset by acute economic and social inequalities. India’s growth story has came at a time when the world is facing threats from a variety of factors, be it energy crisis, or issues of food security or climate change or even pandemics and disasters. One of the biggest challenges we face today is how to address assimilate these divergent issues and work towards the common good, peace and security of mankind. With growing economic power now, our people are willing to spend more for better living. Our employment guarantee and poverty alleviation programs are designed to ensure decent food and economic security to our ‘people who need help’. However our developmental efforts should in no way be assumed as contributing to global crises of food, energy or climate change.

The real reason for these crises is the distortions perpetuated by developed countries over centuries of exploitation of natural resources. The developing countries are facing pressure to scale down the use of the resources that contribute to their growth. You can very well observe that our per capita consumption of resources is one of the lowest in the world. We are not in a position to make any sacrifice which can directly affect our capability to address the issues of social justice. No doubt we will contribute our might to find solutions to these vexed problems. However these solutions should be based on new technological innovations, techniques of adaptation and better use of resources. We are using our presence in international fora to convey that the solutions for energy crisis, food security and climate change problems has to come primarily from the developed world. Those who have consumed resources over decades have major responsibilities for transfer and financing of technologies to address these issues.

Ladies and Gentlemen,

India is credited with an impeccable record on nuclear non-proliferation that is well acknowledged by the world. Our present engagement with IAEA and the United States on the bilateral civil nuclear energy cooperation is an outcome of the confidence and our ability to keep this commitment in years ahead. The future growth of India is incompatible with continuing technology denials. With more than 50% of our energy requirements met by coal and fossil fuels, and the current unprecedented situation of a sharp rise in the prices of oil and gas, given our energy requirements for the next 20-25 years, we have come to the conclusion that there is no alternative to developing our nuclear energy sources. Today we have an installed power generating capacity of 1,60,000 MW. However, the actual generation is 1,38,000 MW constituting 89,000 MW thermal, 35,000 MW hydro, 10,000 MW renewable sources and 4,000 MW nuclear as of November 2007. Our projected requirement is 800,000 MW by 2030-31.

The coming years will demand a new mindset and a fresh approach-towards our society, polity and economy. We must adopt a perspective that is based on pragmatism. The challenges ahead call for an enabling framework for sustainable development to be in place which is provided by our system of democratic governance, with an active civil society and media. India has conclusively demonstrated that substantive social and economic progress is possible through true democratic governance. In our success, we have proved wrong the sceptics who had argued that democracy could not be sustained in a country of continental size, hosting all the religions of the world, a bewildering array of languages and cultures, as well as vast disparities in social and economic status. Indeed, we have established that in a pluralistic society, democracy is the way to promote socio-economic transformation for the betterment of all sections of the people, especially the under-privileged and the deprived.

In this era of globalisation we are committed to working with all regional forums and advance the development agenda for eradication of poverty. We believe that eradication of poverty and sustainable inclusive development are not only issues of importance for developing countries, but also matter of our collective global interest.

The Indian economy has surged, over the past 10-15 years, on the basis of its high sustained growth trajectory and integration with the global economy. We are convinced that despite the risks, opening up is the best way to achieve economic progress and improve the lives of their people. We have focused on enabling our economy to meet the challenges and seize opportunities in global markets. We have pursued sound macro-economic policies, strengthened our financial systems and improved corporate governance. Some of this is still work in progress. Investors are taking notice; FDI inflows to India has reached US$ 20 billion, a growing number of Indian companies are also internationalizing their operation and have invested nearly US$ 10 billion in the last six years in 4000 projects. The changes are already showing results in a big way, so much so that the world is talking note of the extraordinary rise of India.

The process of economic integration is taking place within regions at varying paces, in the direction of a global marketplace. Competition is greater than ever before -between companies, between nations, and between regions. For the first time, it can be said, that the world is becoming one big market. In this emerging market, we have to be extra careful. We do not think that more than 200 million Indians who earn less than one dollar a day can effectively withstand the market forces. One of our important challenges therefore is to ensure that our people who are below the poverty line are not affected by the adverse factors of globalisation. I can say with conviction that the UPA government is making all possible efforts to bridge the gap between growth and development and social equity. Various flagship programs and projects have been introduced and implemented in the last four years such as NREG, Bharat Nirman to the tune of 12,000 crore , Tribal Rights on Forest Lands. The Eleventh Five-Year Plan has provided for higher outlays in many core sectors such as Agriculture by 11%, Education by 19% and Health by 7%, to name a few.

Ladies & Gentlemen,

Democratic values do not necessarily mean free market forces. Real democratic values can be judged on the quantum of concern that society shows for the underprivileged and marginal sections. We need to have growth but growth without proper distribution of income is a danger to democracy and a pitfall for social engineering. We are aware of this fact and have been able to manage our growth with sustainable development to ensure that fruits of growth are available to all sections of the society.

Global trade plays an important role in fostering economic development and fighting poverty. Nevertheless, international trade continues to face barriers and distortions particularly in the agricultural sector, which affect the overall efforts of developing countries to enhance the well-being of their societies. We are aware of such distortions and protectionist policies adopted by developed countries and these are among the possible reasons for the food crisis that we face today. We are however determined going to ensure that our farmers get their due share in the ongoing negotiations under WTO.

There are major changes taking place on our domestic and external fronts, which call for new policy approaches for development. In these circumstances, India has the enormous potential to exploit her geographical advantages and bring significant benefits to populations residing in the region in a much more direct and participative manner than before. In a globalizing world, we have to look beyond national and regional boundaries and work together. We recognize that an enabling global policy environment, based on principles of equality, mutual respect and justice, constitute a positive framework for international co-operation.

India hopes to emerge as an important global player in the coming decades. With effective multilateral institutions, all countries can contain the risks and benefit from open markets and competition. We not only aim at becoming an engine of growth but also to support the globalization and integration process in other parts of the world.

Before I conclude, I would like to mention two brief comments on food shortage and inflation. India’s production increased from 51 million tonnes in 1950 to 227 million tonnes in 2007 which is no mean achievement. But, population simultaneously has increased from 350 million to 1112 million in the same period. Therefore, we are still left with more than 200 million people who have limited access to food. About the rise in inflation. We import more than 100 million tonnes of crude every year. Crude price has increased from US$ 35 a barrel to US$ 138 a barrel in the last four years. At this count alone the government has had to bear the extra burden of Rs. 40000 crores in the first year that is 2005-06, Rs. 49,000 crores in the second year, Rs. 70,000 crores in the third year, and a whopping Rs. 2, 25,000 crores estimated for the current year. The inevitable price hike is to compensate only a meagre amount of this huge financial burden.

I am convinced that the captains of the industries gathered here today will explore these new trends and ensure purposeful functioning as well as higher profitability of their respective enterprises. The quotients of responsible business conduct and corporate social responsibility have to be upped. I implore you all to extend the boundaries of your thought and vision, and draw from the expertise and experience of today’s global economy.

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