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Global competitiveness key to economic growth, says Prabhu

Citing China as an example of beneficiary of economic globalisation, Railway Minister Suresh Prabhu on Thursday said India also needs to focus on "global competitiveness" for the growth of its economy.

Bengaluru: Citing China as an example of beneficiary of economic globalisation, Railway Minister Suresh Prabhu on Thursday said India also needs to focus on "global competitiveness" for the growth of its economy.

"Looking at globally, has the globalisation helped or not helped?, of course jury is still not out on it, there are countries which will say they have been benefited, others who say they have not been benefited and both are true," he said.

"But if you see global economy as a whole, it has significantly expanded in the last twenty to twenty-five years and the expansion has been phenomenally different than any other period in the economic history of the world," he said.

Speaking at the ICAI International Conference on "Accountancy profession: Building Global Competitiveness: Accelerating Growth" organised by The Institute of Chartered Accountants of India, he said it also happened largely because of huge expansion that was done by it.

"China has strongly expanded....It has become USD 9 trillion economy which was smaller than India in 1978 and that has now changed..." he said.

Prabhu said, "One country which has immensely benefited from globalisation is China. In fact if you go to any country including Europe, US, Asia, Africa you will find always skeptics about globalisation, but this is one country in the world where you go they will say globalisation is good. How did they do it? How did they benefit from it?"

Stating that China became member of WTO very late of which India was a founding member, he said "....They started taking steps towards the fleet of economy in 1978 and then they realised they must join the world economy and therefore they applied for the membership of WTO."

He said China prepared a strategy to be a member of WTO and then realised that if it joined WTO, there were two possibilities- our market will be flooded with foreign goods, "but why not we flood our goods in foreign countries- that is what happened."

"China expanded their global trade significantly. It has a huge trade surplus with United states. China has created four trillion worth of foreign exchange and it has really benefited in a way that they could remove poverty more or less completely," he said, adding, that "how did it happen is through a very important process - that is building competitiveness."

Prabhu said, "China benchmarked itself against all the global economies, global products, global supply chains and decided that it will become competitive and automatically it will be able to conquer the market."

China has benefited with huge economic power, geo- political benefits because of this and most importantly it has helped it in removing the poverty, he said.

Prabhu further said that economic growth rate cannot be accelerated unless there is an element of competitiveness.

It has been seen that globally in the last twenty-five years or so, there has been huge GDP expansion but that did not result into creation of too many jobs.

"How do you create jobs? To create jobs you need to be competitive, you cannot be in a industry which is un-competitive and running to the government asking for the subsidy, fiscal benefits....; you have to become competitive to create viable economic activity which helps in creation of jobs...."

Stating that India has been witnessing low growth, high poverty, low economic development and no social development, Prabhu said, "How do we get out of this malice is - one thing we should keep in mind, that is we must accelerate growth in our own country."

To accelerate growth, the country needs two markets: domestic and global market, he said.

During his address, Prabhu also asked the Institute of Chartered Accountants of India to align itself with different government initiatives such as Make in India, Swachh Bharat and Pradhan Mantri Jan-Dhan Yojana.