Nobel Laureate Paul Krugman lauded India’s growth story and observed that the country has grown at a rapid pace achieving in just 30 years, the economic progress made by Great Britain in 150 years. While this may be intriguing, the top economist pointed out that despite the economic progress, there is high poverty, and the wealth hasn’t been equally distributed. “There are issues of corruption. You cannot become Denmark with Chinese levels of corruption,” Krugman said speaking at the News18 Rising India Summit on Saturday.
In his address, Paul Krugman also said that rest of world is not paying as much attention to India as it should. “If China wasn’t around, we would have said what an incredible story India is,” Krugman noted adding that the country has achieved extraordinary progress as reflected in quadrupling of GDP per capita in a very short time, and becoming a better place to do business.
Krugman said that India must up the ante on its manufacturing sector and not just focus on services. Comparing India with Japan and China, Krugman noted that Japan is no longer a superpower because its working-age population declined, and China is looking the same. “In Asia, India could take the lead but only if it also develops its manufacturing sector, not only the services one,” he said at the event.
One of the major reasons for the country to develop its manufacturing sector is to solve the unemployment issue, he said. “India’s lack in the manufacturing sector could work against it, as it doesn’t have the jobs essential to sustain the projected growth in demography,” the ace economist observed.
Krugman credited India’s services sector saying that services is propelling growth to an extent that hasn’t been seen anywhere else in the world. He sees enormous potential due to globalisation of services. “Globalisation of service trade has a huge potential. That’s one reason to be especially hopeful of India’s progress. It has the first-mover’s advantage here,” Krugman noted. Apart from the phenomenal growth in the services sector, Krugman says that India will also benefit a lot from its demographic dividend.