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Keeping in view the global market, India is currently experiencing significant economic growth, mainly due to increased interest from multinational corporations around the world. As per the MNCs, India is one of the best alternative places where goods can be manufactured, especially as other countries diversify their supply chains. Moreover, the rapidly growing market potential of India cannot be ignored, as India’s economic resilience shines through amidst a backdrop of global challenges.
There is an urgent need for more funding to bridge the gap in development financing, as revealed in the UN’s latest report called the ‘2024 Financing for Sustainable Development Report (released on April 12). As per the report, due to the COVID-19 pandemic, the gap has widened. Moreover, there is a rise in geopolitical tensions, unwanted climate changes, and cost-of-living crises, which have also decreased and derailed progress on multiple fronts, whether it is healthcare, education, poverty alleviation, etc.
Despite these challenges, India remains strong. As mentioned earlier, multinational companies are attracted to India because of its huge market and potential for growth, especially as a manufacturing base. They see India as a good place to manufacture things. This is especially true because countries with advanced economies want to expand to places where they get their stuff made easily and don’t rely too much at just one place. MNCs are looking for places like India to make their products because it makes their supply chains more stable and helps them work better in a world where things change quickly.
However, the report also points out that many developing countries, including India, face difficulties attracting investment. This is due to factors like unstable global investment, unpredictable prices for goods, and high borrowing costs. All these things make investments harder.
The report of the past two decades reflects on the highs and lows of the global economy. The early 2000s had to witness a period of significant expansion driven by globalization and technological advancements, but the financial crisis visible in 2008 was no doubt a stark reminder of the inherent vulnerabilities within the global economic framework.
Furthermore, the report also highlights India’s work in financial technology (fintech) and its role. This includes digital payments, which have become more accessible to people and small businesses, especially among marginalised communities and small businesses. During the COVID-19 pandemic, fintech played a major role in India in having contactless delivery of government support measures, and quickly providing financial support to those who needed it most.
As the world has to race with time to achieve the Sustainable Development Goals (SDGs) by 2030, the report warns that current progress is at risk. It needs an urgent call for action. Without more funding and action, millions of people, especially in the poorest countries, will have to face and suffer extreme poverty along with debt. Addressing challenges is imperative to ensure that no one is left behind in the journey of a more equitable and prosperous future.
The UN’s Deputy Secretary-General, Amina Mohammed also emphasised the importance of leaders taking action. Addressing issues like rising debt and finding sustainable ways to fund development projects is crucial for a better future. The report says that a big part of the problem is countries owing a lot of money and the cost of borrowing going up.
As per the report, even in the poorest countries, the amount they have to pay on debts each year is set to increase to $40 billion between 2023 and 2025 which is up by more than 50 percent from $26 billion as visible in 2022. They now spend 12 per cent of the money they make on paying interest on loans, which is four times more than they did ten years ago. As per the data, around 40% of the world’s population is living in countries whereby the government pays more money on interest on loans than on basic things like education, healthcare, etc.
UN Under-Secretary-General for Economic and Social Affairs, Li Junhua, says, “we’re facing a crisis in sustainable development because of inequalities, inflation, debt, conflicts, and climate disasters.” He also says that there’s enough money to tackle these issues. Billions of dollars are lost annually because of tax avoidance and evasion. On the other hand, subsidies for fossil fuels add up to trillions of dollars. The problem is not the lack of funds; it is the lack of determination and commitment from good governments to use it for the right things.
The UN report not only highlights India’s economic resilience but also recognises the urgent need to have collective action to overcome the multifaceted challenges. By making smart investment decisions and coming up with new ideas, everyone including India can keep moving towards sustainable development. This will inspire other countries and give hope to people all over the world.
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