The students of the Academy had the opportunity to interact with Dr. A Vasudevan, former Executive Director at the Reserve Bank of India. Dr. Vasudevan delivered an engaging talk on the topic, “Hello to Sustainable Development and Goodbye to Fixed Fiscal and Monetary Policy Rules: Snippets of the India Story.”
Dr. Vasudevan believes that the need of the hour is to think of inclusive growth which would be possible only if one moves their fixation from Fiscal and Monetary Policies to the requirement of formulating Sustainable Developmental Goals (SDG). SDGs comprise of numerous areas of public policy, ranging from Poverty and Hunger Alleviation, Gender Equality and Women Empowerment, Clean Energy, Reduction in Inequalities, Conservation of Ecosystems, Sustainable Cities and Climate Change. He pointed out that “Growth” as an objective is mentioned only in one out of 17 Goals that have been defined. Just defining SDGs is insufficient as these goals need to be quantified in terms of indicators and cardinal numbers to maximize their effectiveness. Furthermore, a deeper discussion is required on whether the quantified goals will be optimal and sustainable with respect to the economy.
Dr. Vasudevan then touched upon the financing required to meet the SDG target which came to about US$ 5-7 trillion per year (UNDP). According to his estimates, India would fall short of the financing gap by US$ 8.5 trillion and even this could end up being higher if one takes the rupee depreciation into account. Another perspective of looking at inclusive growth is “Universal Basic Income”, which he believed gave a “human face” to growth.
Dr. Vasudevan then went on to talk about Fiscal, Monetary and Exchange Rate Policy of the Reserve Bank, explaining the various policy constituents and providing a brief snapshot of India’s historical performance with respect to each of the constituents.
From his point of view, while fiscal policies help realize some of the critical SDGs through larger allocation of investments to the Ministries that deal with such goals, having strict adherence to fiscal policy acts as a hindrance to the realization of the broader goals. Hence, they should be relaxed for the greater good. There is also a need for greater awareness and communication on the need for SDGs, which will help fuel public participation into the matter.
The session concluded with Dr. Vasusdevan posing thought-provoking questions and asking if we would be influenced by the spirit of inclusive growth and SDGs and nudge others to be imbued with the same spirit. On hearing a resounding “Yes”, he further asked us to reflect upon how we were willing to take up this challenge. Dr. Vasudevan’s humble yet confident demeanour struck a chord with the students and left us curious to advance our understanding of the SDGs.