India assumes the G20 Presidency on the 1st of December 2022 from Indonesia and will convene the G20 Leaders’ Summit for the first time in the country in 2023.
GS II: International Relations
Dimensions of the Article:
- Features of Indian economic growth
- Key drivers of economic growth
- About G20
- Structure and functioning of G20
- Benefits of G20 summit
Features of Indian economic growth:
- The economic reforms in India was a slow but a progressive process.
- It gradually started creating an inner web of confidence building measures to provide not only economic growth but also ensure the development of each section of society.
- This framework of ensuring socio-economic justice helped in building trust.
- Numerous Indian business experts and investors have carved a niche for themselves overseas, particularly in the field of information technology, biotech, pharmaceuticals and health care where even advanced countries need to still catch up.
- Apart from this, India’s indigenous entrepreneurs and industries certainly give it a huge advantage over the higher level of FDI of other leading economies of the world.
- For instance, the Chinese export-led manufacturing progress is mainly based on FDI, which is hardly a substitute for homegrown entrepreneurship.
Key drivers of economic growth:
- Internal markets:
- India’s strength lies in creating its internal markets as it already has a fast-growing middle class.
- Business-friendly environment:
- Besides, India has brought forward all necessary requisites required for a good, business-friendly environment for investors across the globe.
- Political stability:
- The trust generation by India’s services-driven industry and an excellent political system based on pluralism and democracy further strengthen its institutional stability.
- Foreign Direct Investment (FDI):
- The abundance of cheap labour and the initiative towards FDI has made India with a promising prospect the strong foundation.
- Digital payment and Start-up Revolution:
- Recently, there has been a revolution in the process of opening up startups as they have crossed the landmark of more than ten thousand providing a huge impetus to employment generation during the last five years alone.
- The robust digital Payment System and neo strategy of start-ups have created more than one lakh of both direct and indirect jobs.
- The strategy to enhance its operational and support network, ranging from rural to urban areas, ensured a much higher rate of return on assets.
- The tremendous trust generated by Indian banking, public and private sector units provided a much-needed impetus during and after Covid-19.
- India has made significant progress in several areas, including knowledge and skill-based intensive services such as telecommunication, pharmaceuticals, biotechnology, professional services of doctors, teachers and management professionals, etc.
- The G20 is an informal group of 19 countries and the European Union, with representatives of the International Monetary Fund and the World Bank.
- The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, 80% of global investment, over 75% of global trade and roughly half the world’s land area.
- The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.
- Spain as a permanent, non-member invitee, also attends leader summits.
Structure and functioning of G20
- The G20 Presidency rotates annually according to a system that ensures a regional balance over time.
- For the selection of presidency, the 19 countries are divided into 5 groups, each having no more than 4 countries. The presidency rotates between each group.
- Every year the G20 selects a country from another group to be president.
- India is in Group 2 which also has Russia, South Africa and Turkey.
- The G20 does not have a permanent secretariat or Headquarters.
- The work of G20 is divided into two tracks:
- The Finance track comprises all meetings with G20 finance ministers and central bank governors and their deputies. Meeting several times throughout the year they focus on monetary and fiscal issues, financial regulations, etc.
- The Sherpa track focuses on broader issues such as political engagement, anti-corruption, development, energy, etc.
- Since 2008, the group convenes at least once a year, with the summits involving each member’s head of government.
Benefits of G20 summit:
- Various programmes to be brought by the upcoming G20 summit can benefit India in the following ways:
- Limiting climate change issues
- Opening up gateways for renewable energy
- Development in technological knowhow
- Channelizing the sources of power generation
- Creating a mechanism to withstand sudden challenges.
- The G20 Presidency has provided a ripe time for India to emerge as a perfect choice not only for manufacturing and assembling in the economic arena but also for being the perfect partner globally in myriad areas.
- The cooperation of G 20 nations can also provide new techniques and develop challenging strategies to meet the needs of even the most vulnerable nations.
- It ensures a significant progress towards an inclusive world society.
- This will also bring a positive change in International Relations towards more contiguity and harmonious relationship.