FDI in retail to boost agriculture, says economist

A Noted economist Jim O’Neill on Monday came out strongly in favour of Foreign Direct Investment (FDI) in retail saying that the move will give a boost to India’s agricultural sector.

The former chairman and chief economist at Goldman Sachs, O’Neill, was speaking on ‘Achieving India’s Full Economic Potential’ at 3rd Vibrant Gujarat Lecture Series in Gandhinagar. Jitesh Gadhia, senior managing director of Blackstone, was the other speaker here.

“Allowing FDI in retail will be a big boost for agriculture in India. India needs a huge boost in its agricultural productivity,” said O’Neill, who coined the acronym BRICs for Brazil, Russia, India and China. The comment was made in the presence of CM Narendra Modi, who has opposed the UPA government’s decision to allow FDI in retail.

While clarifying that he has limited knowledge about Gujarat, the economist said that Gujarat can emerge as Guangdong province of China in terms of infrastructure.

Speaking about the challenges facing India, O’Neill said that there is need to improve governance, raise educational achievement, increase quality and quantity of universities, control inflation, liberalise financial markets, increase trade with neighbours, increase agricultural productivity and improve environmental quality.

“India’s greatest asset is democracy. Its greatest problem is also democracy,” he said. He also said it would be too pessimistic to say that 5% GDP growth is the new normal.

CM Narendra Modi said that Gujarat has already initiated steps to overcome various problems. He also said that India has the potential to grow as China, but regretted that a decade has been lost due to uncertainty and policy paralysis.