We also welcome the Honourable Finance Minister of India. Good evening to all. I invite Honourable Finance Minister, Srimati Nirmala Sitaraman for welcome remarks and for introducing the Speaker for Arun Jaitley Memorial Lecture today. Honourable Prime Minister, Senior Minister, Shanmukh Ratnam ji distinguished invited guests. We are gathered here for the Arun Jaitley Memorial Lecture. It was in August 2019 that Sri Arun Jaitley passed away. PM Modi and Government of India in Arun Jaitley ji's honour named National Institute of Financial Management after Sri Arun Jaitley. It was also decided that a lecture in his memory will be held annually. However, because of Covid, we could not commence this in 2020 or in 2021. A few words on Sri Arun Jaitley. His remarkable political career which began with a 19-month imprisonment because he was protesting against the emergency, his successful legal practice, his great debates in our parliament, the ease with which he served as a Minister in many ministries and departments, both under PM Vajpayee and under PM Modi. So much can be said about each one of these. Guided by PM Modi, he was the person behind two major reforms introduced in the earlier tenure of our government under Prime Minister Modi, the GST and the Insolvency Bankruptcy Code. It was during his tenure that the date of the presenting of our annual budgetary statement in the parliament was advanced to 1st February from end February. Also to present one budget in the place of two, the railway and the general budget, was a decision taken during his tenure. He valued the good discourses. He never rejected an invitation to address a good thinking audience, be it in a university or a think tank or even in a college. His interest in cricket, his love for fine things in life, fountain pens or watches, we all know of it. A great connoisseur of food, he could name the best restaurants in at least 25 cities across the world. He had friends across party lines and was always ready to help. In recognition of the contributions she Arun Jaitli made to the nation, the service to the nation and in order to perpetuate his memory, Ministry of Finance, Government of India is instituting this annual lecture series titled the Arun Jaitli Memorial Lecture. We are grateful and happy that the first Arun Jaitli Memorial Lecture is being delivered by Sri Tharman Shanmugaratnam. Sri Shanmugaratnam is Senior Minister in Government of Singapore. He was previously Singapore's Deputy Prime Minister and before that Finance and Education Minister. He is concurrently the Chairman of the Monetary Authority of Singapore, the Nation's Central Bank and Financial Regulator. Mr. Shanmugaratnam has spent his entire working life in public service in roles principally related to economic and social policies. Again, Mr. Shanmugaratnam co-chaired the G20 High-Level Independent Panel on Financing Future Security from Pandemics in the Year 2021. He currently co-chairs the Global Commission on the Economics of Water, which is aimed at re-envisioning and proposing solutions to overcome a growing crisis of access to clean water. He is also a member of the United Nations High-Level Advisory Board on Effective Multilateralism. He also has led the G20 Eminent Persons Group on Global Financial Governance. Mr. Shanmugaratnam chairs the Group of 30, an Independent Global Council of Economic and Financial Leaders. He also chairs the Global Education Forum and the Advisory Board for the Human Development Report. He earlier chaired the International Monetary Fund and Financial Committee IMFC for four years. He was the first Asian chair. I'm indeed grateful and happy that the first lecture is being delivered by Sri Tharman Shanmugaratnam. Thank you. His Excellency, Prime Minister Narendra Modi, Her Excellency, Finance Minister Nirmala Sitaraman, Mrs. Sangita Jaitley, and family members. Excellencies and distinguished guests, many of whom are friends and close associates of Mr. Arun Jaitley. It is a real honour and privilege for me to be speaking of this inaugural lecture named after one of India's most outstanding public leaders. I knew Arun when I was the Deputy Prime Minister and Finance Minister. We had many exchanges and he left a deep impression on me, an impression of his character. He was on the one hand a person of unusual humility and generosity, but he was also a person who clearly had self-belief. He had that unusual combination of humility and self-belief. And that was part of the reason why Arun Jaitley was a man for all seasons and all parties. It is how he marshaled through some of the most complex reforms, the GST being the most important of course, bringing all stakeholders together, making compromises, building bridges, finding consensus. And that legacy of Arun Jaitley will surely live on in India and for many of us around the world. And it is a legacy that will offer many lessons for how we address future challenges. We have entered an era of profound fragility globally. We in fact have a confluence of fragilities, a confluence of insecurities, the geopolitical, existential, economic and social at the same time. We know the geopolitical. We know that the risk of escalating geopolitical tensions and conflicts is greater than it has been at any time since the end of the Cold War. The global system of rules and norms aimed at preserving peace and territorial integrity was never perfect. It was always imperfect. But what's happening in Ukraine is a major rupture and will have ramifications that go beyond just another conflict or another war. And the ramifications could be catastrophic. Second, we have a prospect of stagflation, higher inflation and slow growth for a period of time, not just for a year or a year and a half. And in the advanced countries, there's a very real prospect of a recession in the near term. The risks of high inflation preceded Ukraine, but of course now accentuated. And critically, although the levels of inflation and having slow growth or recession for a while doesn't constitute the most important problem in the world, critically, it will erode political capital at the time when we need political capital within nations and globally to address much larger challenges, including the challenges of climate change, a water crisis and shrinking biodiversity. So that's the second challenge, stagflation. The third challenge, as I've just mentioned, is that the global commons are deteriorating and they're deteriorating at an accelerating pace. The shifts in the environment, which are structural, not just episodic, not just random fires and extreme heat waves or droughts, these structural shifts in the environment have combined with the increased risk of global scale spread of infectious diseases, epidemics and pandemics. And we now have to live with that threat as part of the world that we are in. And it will be a threat to lives and livelihoods for many years to come. In the short term, the unplatable reality is that we will have to rely more on fossil fuels to ensure energy security and to prevent sharply higher energy prices. But it means that it's all the more important that we double down on our medium-to-long-term strategies of making a transition to a low-carbon energy future and making a transition to new ways of behavior and the circular economy that Prime Minister Modi has emphasized and spoken about. All the more important that we double down on these medium-to-long-term shifts in behavior, shifts in policies, mobilization of investments to achieve a sustainable future. And the fourth challenge, coming out of the geopolitical tensions, higher food prices, energy prices, fertilizer prices, coming out of all the larger global challenges we face is that the developing world, the significant part of the developing world, now faces the risk of a rollback in the economic and social gains that were very painfully achieved in recent decades. Development is going to be more difficult. And the experience of the last two years because of COVID has set us back much further in the developing world. One and a half years of lost learning in some cases more is not just a short-term loss, it's a loss for the long-term for all the young children who are affected. And we risk the permanent scouring of the young, further disempowerment of girls because many of the girls are not going back to school and we risk something more than that. So we have a conflict of challenges that is unprecedented in its combination and it's not here for the short-term. This is not a perfect storm. It's not a perfect storm in the traditional sense of a conjuncture of one-off events or random shocks. We have entered a perfect long storm, structural insecurities that are going to be with us for some time to come. Geopolitical, existential, economic, social. And we cannot wish these insecurities away nor can we pretend that today's state of multilateralism is going to enable us to address these insecurities. We do need a new and stronger multilateralism more effective in meeting both the nation's own interests and our collective interests. Overriding priority must be to avoid a polarized world that the world is becoming more multipolar is irreversible and that's a mark of success of the global economy. There are many more poles of success and influence. That's irreversible. But we must prevent a multipolar world from becoming a polarized world. That has to be our overriding objective. It requires a new strategic understanding amongst the major nations an understanding that has to be shaped by what they share in common what their common interests are which is to provide security from climate change and pandemics to provide peace and to avoid global financial crises. These are challenges that every nation faces. Every nation has an interest in avoiding this avoiding climate change going beyond the bounds of what will be safe what will be safe, avoiding pandemics, preserving peace and avoiding major financial crises and we have to shape strategic understanding between the major nations around those common interests and define multilateralism on that basis. The rules of the game will have to be updated to make sure that trade is fair, that there's no harmful competition supply chains are being diversified not just because of COVID, it was happening before COVID and COVID has accelerated it but let's not retreat from an open integrated global order which has been hugely beneficial to all nations including the largest nations. It will not assure us of peace. Economic interdependence does not assure us of peace but it makes peace much more likely than a world of increasingly decoupled markets, data, payments, technologies. We must stay open and stay integrated. Achieving this will require geopolitical skill and leadership and India will be taking over the G20 presidency next year at this very important time when leadership is required and new directions are required including new directions in the existing multilateral institutions like the World Bank, like our multilateral development banks which have to be refashioned for a world that is fundamentally different from the time when they were originally established a world where the challenges of the global commons are central to every nation's future including especially developing nations in addition to poverty alleviation. India itself is looking to its next 25 years having reached 75 years of independence. It has emerged with strength from COVID and it is now looking to create, as Prime Minister Modi says, the new India. India's challenges in the next 25 years are enormous despite all the global challenges we face. In fact, India has greater opportunity than any other major nation in the next 25 years but achieving, realizing the opportunity will require higher ambition, higher ambition in growth, higher ambition in social inclusivity and high ambition in developing a sustainable society and economy. It also requires greater urgency. India will have to accelerate the pace of reforms that has been started and reorient the role of government but India is able to build on the very distinctive achievements of recent years. I would say dramatic achievements of recent years. Two in particular. First, almost unique internationally, the large-scale implementation of the large-scale provision of basic social amenities hundreds of millions of people within a short space of time, hundreds of millions of people, basic social amenities, toilets, electrification of all villages. 98% of India is now having access to electricity. Perhaps not the entire day but it's got access to electricity which didn't exist before. Clean cooking gas hundreds of millions of people depended on pollutive forms of cooking in the past with great impact on their health, particularly the women. Primary health care centers, 150,000 primary health care centers being set up all around the country to provide near close access wherever people live. All as part of Ayushman Bharat, public health assurance. Most recently, functioning water taps and water pipes all across the country. Work in progress but a very important task. And all of these, if you think about them, toilets, electrification, clean cooking gas, functioning water taps, particularly empower women. It's the women who've been spending hours every day cleaning up for water. They particularly empower women. I know Prime Minister Modi started this in Gujarat some years ago but this is an immense historical task correcting a legacy of neglect for the poor, for ordinary people in the rural areas and for girls and women. Immense historical task. So that's the first unusual achievement of recent years that India builds on as it looks to the future. The second equally dramatic is what has been achieved to provide for digital and financial inclusion. Again on an immense scale in a country with 29 different states with different democratically elected governments and vastly differing stages of development. Immense achievement. And I don't need to elaborate about it but the India stack, starting with Aadha and UPI, unified payments interface so that everyone can make digital payments is a remarkable achievement on a global scale. There's been no financial innovation of that scale and speed achieved in any other country. We now meet the same boldness, the same boldness of political and social vision, the same attention to implementation, the same ability to cut through red tape, the same ability to mobilize the ground and to have center and states work closely together to address the very important challenges of the next 25 years. First, creating vastly more jobs, including jobs for the low skilled and semi skilled. Second, creating a more sustainable economy and society and demonstrating to the world how this can be achieved whilst continuing to develop. And thirdly, underpinning everything else, investing in social mobility, investing in quality in education and basic healthcare so as to create opportunities for all. In other words, India needs not just an India stack but a social development stack. Going beyond the provision of basic social amenities, the toilets, electricity, clean cooking gas and so on, very important, but going beyond that to now develop opportunity for people on a self determining basis achieve better lives through education, better healthcare and it can be achieved because the same almost missionary zeal for implementing reforms on the ground. The same ability to work with old stakeholders can be applied to this very large task of upgrading the majority of young Indian persons' futures starting from young and skilling them through life. It needs urgency. As Prime Minister Modi said on India's 75th anniversary, this is India's Amrit Karl. It's critical moment. As he put it, we have to start now. We don't have a moment to lose. And the next decade will be critical, not just the next 25 years. The next decade will be critical because there is a race against demography. There is a very large group of young people as large as China faced at an earlier phase of history. 580 million Indians are below the age of 50, below the age of 25. That's a large number of people who need to be quickly skilled, given confidence to earn their own success in the workforce. For those of us who are from outside India, those who are economists, academics, observers, well-meaning observers, we must recognise the complexity of these challenges. And part of the complexity comes from the fact that India is now unraveling what are very deep legacies, legacies that go back to the earlier pre-independence years, go back to the colonial era. A legacy of economic thinking and strategies that from the earliest years of independence relied on state control of the economy, and complex and frequently changing regulation, very strong legacy, which has not disappeared from India. A legacy of preference for capital-intensive industry rather than labour-intensive industry and inadequate attention-paced job creation. A legacy going back to the pre-independence years of letting people live with very low incomes in the rural areas for all their lives rather than finding ways to reform and allow people to be freed up to move into more productive activity. And a legacy of neglect, again going back to the pre-independence years, neglect of basic education and healthcare for a large part of the population. Of course, a legacy of unequal treatment of girls and women as well. Each of these is now being unraveled. It takes time. It's not just one or two policies. It will take missionary zeal, but there's urgency now in moving faster. India needs this urgency. It requires much higher growth and much deeper inclusivity, and the two go together. You cannot sustain high growth for 25 years, let alone 40 years, without much deeper inclusivity, and you cannot achieve inclusivity without higher growth. As Arun Jaitley put it in 2017, he asked the question, how do you fight poverty? And as he put it, you need a high level of growth. Growth brings in resources and the policies of the state have to be aimed at achieving a high level of growth. It's absolutely necessary to tackle poverty and achieve inclusivity. But he also asked, will growth itself address or remove poverty? No, growth itself doesn't. You also need social activism, putting the poor at the forefront of thinking, of public consciousness, of policy. Putting the poor at the forefront. And again, I know that Prime Minister Modi has been talking about this very recently. I will talk briefly about growth and jobs and then I will talk about inclusivity. And I will not cover the ground comprehensively in the interest of time. But let me first say that India is not going to be able to achieve its economic or social ambitions in the next 25 years without substantially higher growth ambition. India must grow by at least 8% to 10% over the next 25 years, 8% to 10% here. It is the only way in which it is going to be able to both lift average incomes and per capita income as well as create many more jobs. To do both at the same time to lift per capita income significantly and to create many more jobs for a large young population, you need higher growth. And 8% to 10% is the minimum that has to be achieved in the next 25 years. We've seen in many developed economies and even in China in the last 10 years a situation where productivity is achieved at the expense of jobs. In fact, the employment rate in many developed countries has come down in the last 10 years. It has also come down in China. China's sustained high productivity growth but the employment rate has come down. India does not have that luxury of choosing between productivity growth or job growth. You need the productivity growth because it's the only way in which incomes are going to grow but you need a lot more job growth and it can be achieved because that's what several East Asian economies did. In fact, for 40 years, growth of above 8% for 40 years allowing for both productivity growth to be healthy and strong and very significant job growth, job growth keeping pace with the growth in the working age population. It can be achieved in India. One of the reasons why it can be achieved is that there's wide disparity within India itself. There's tremendous divergence within India between the states that are doing well and the states that are lagging and there must be ways of closing that divergence, achieving convergence within India. That itself will boost growth. Second, this huge opportunity to free up a large part of the population that is still stuck in low productivity activity in the rural sector. It's not as if people want to be stuck with low incomes. It requires major policy shift, major reform and innovation in agriculture and it can be achieved. Those are two very important reasons why we can aim for higher growth in India and the soon to be implemented simplification of labour laws will also help greatly because labour laws effectively have been anti-job. They have kept a large part of the population in the informal sector and in very small firms and India has been unable to achieve the scale economies required for both productivity growth and job growth to be higher. You can only achieve these ambitions with a strong focus on export oriented manufacturing, a much stronger focus than there is today. And with a strong focus not just on jobs for the highly skilled, like those in the IT sector, but a strong focus on those who come in with low skills or come in with a moderate amount of skills because manufacturing has a way of taking in unskilled people and making them semi-skilled and it's got a way of taking in semi-skilled people and making them more highly skilled over time. It has a ladder of skills. India has to use the opportunities in global markets to create many more jobs for the unskilled and the semi-skilled and those opportunities are still plentiful. Don't believe those who say globalization is in retreat. It may no longer be expanding the way it used to be. You may not be getting that hyper pace of expansion but the level of exports and imports today in goods of many forms is much higher than it was 20 years ago. It may be stabilizing but it's a huge market of opportunity for India and it means being willing to specialize in what India is good at, going for an openness in trade and investment, investment by local firms, investment by foreign direct investors, openness really counts because then you get the cheapest and best inputs and you can be a competitive supplier to the world. It's what Germany does, for instance. A large manufacturing economy, they specialize. They specialize in components in which they have a dominating presence globally. They rely on inputs from the rest of the world and they specialize in components which the rest of the world needs. It doesn't mean producing a whole product. It means specializing in critical components and having that pricing ability. India's success already seen now in electronics, in vaccine manufacturing, shows the way forward. The PLI scheme, the production linked incentive scheme is working well and it has to be expanded with a special focus on labor intensive industries. This can work for India. India can achieve. It can achieve and can become a leading export manufacturing nation. Agriculture is critical. We have to create better jobs in agriculture and we know what the reforms required are and it will require more R&D, R&D in higher yield crops, weather resistant crops and so on. But it's also very important in addressing the water crisis because agriculture in India is taking a very large toll on water. 90% of all freshwater use in India is in agriculture. Globally it's about 70% or close to 70%. 90% of all freshwater use is in agriculture. We need a far more efficient system of water use, precision irrigation, innovations that can improve soil quality. These are innovations that exist and need to be scaled up across the Indian agricultural sector and it will raise incomes and free up people to move into urban areas for other types of jobs, including higher productivity jobs. And I want to also say that whilst the digital economy offers significant prospects for India in the next decade, two decades, perhaps three or four decades because the world needs more software and India's got an abundance of scientists and engineers and software developers who are good at this. That will still be a very small fraction of the workforce. It's a very small fraction of the workforce. We have to think of other services that can generate jobs and tourism in India and the craft economy offer significant potential as well. India is still not tapping its full potential for tourism.  I mean, natural attractions like Khaziranga and Assam or Kuch in Gujarat or Kumarakom in Kerala. Diverse natural attractions, historic sites like Kushinagar and UP, Kumbhakonam and Tamil Nadu. Many sites, many experiences. I've just given you five or six examples and I was only using those starting with the letter K so you can imagine if I was to take the whole alphabet.  Still not fully tapped. But likewise, the craft economy. There's a multitude of villages around India where you have craftspersons, men and women, weaving, doing pottery, doing craft of various forms. Some of them are farmers who spend part of their time doing this. It's a huge opportunity for developing non-farm incomes in India. That combination of tourism and developing the craft economy. Unique differentiated products all over India. And I just wanted to highlight that opportunity. Finally, let me move to inclusivity which underpins everything else. We must address the challenge of child stunting soon. It's still a major challenge. Almost 40% of Indian children are stunted. We know the causes, malnutrition, poor diets from young. Again, there's a reason for optimism because the recent programs that have been introduced are working well. Poshan Abiyan started in some states has been working well. Significant improvements in maternal health and the recently launched nutrition smart village initiative which has to be scaled up across the country offers promise. Harnessing traditional recipes to give people better diets. But you know, it's such an important investment. There's no public investment with higher long-term return than eradicating childhood stunting. Next education, the new economic policy has been launched. It's extremely important. And basically, if I could summarize what has to be done. There have been improvements in school enrollment, girls and boys, but quality is a big issue.  We know the evidence. Pradham is a major NGO that does very careful assessment of learning outcomes at different levels. Essentially, at standard five, almost 50% of the kids are unable to achieve standard two levels of literacy and numeracy. And once you've been set back at that level, it's not easy to catch up. So we have to improve quality in our schools as a major objective. And again, here, there's reason for optimism because Niti Ayok has been doing these educational quality index studies. And they find again that some places are improving much faster than others, including in the large states. Even amongst large states, some have been moving much faster than others in recent years. And the source of improvement is improved governance of education. How teachers are selected, how school leaders are appointed. It's governance. A public school system can achieve quality. I say this coming from Singapore because we have a very highly regarded education system. It's a public school system. None of the countries in the upper band of the annual PSAR rankings or once in two year PSAR rankings, none of them have decentralized school systems. They all have public school systems or school systems that are coordinated by the public sector. And as India's enrollments have gone up, with a large increase in enrollments in the public schools, it is critical that we bring quality into the public school system. And finally, higher education needs reform. The Prime Minister just spoke about this recently again. Like many other countries in the world and like China in fact, India's higher education system has been overly academically oriented. And it just hasn't prepared the vast majority of graduates for the working world. The large corporations take some of them in and then they put them through an additional layer of training just to make them ready for work. But higher education has to have a stronger applied and skills orientation. And we need to follow that up through the years, once people are in their career. Skills centers and skills oriented universities are critical. I just came from one in Assam because the suggestion of the Prime Minister, Singapore has been collaborating with the Assam State Government to set up a skill center. These are all doable, doable directions. We can achieve it. Reform education, improved governance, focus on skills. Let me conclude by saying something of a broader nature. I was listening recently to an outstanding musical performance by three of India's most accomplished classical musicians, Zakir Hussain, Kala Ramna, Jayanti Kumarish, Tabla, Violin, Veena. Traditions are both the North and South. The three of them came together and they've been performing across the United States to full crowds. In fact, they're going to be performing in Singapore in a few weeks' time and I will be there together with my wife. Now they decided to call themselves, for the purpose of these performances, Triveni. Triveni named after Triveni Sangam, the mythical confluence of rivers, Ganga, Yamuna and Saraswati. So they called themselves Triveni and I was listening to them and I realized this was an unusual confluence because it was not just about their individual genius and they are musical geniuses, each of them. Each of them are geniuses, but it was not just the individual genius. As you listen to a performance of that nature, it's all about improvisation, as you know. Each of them listening to the other, teasing them a little bit, prompting them, taking over, co-creating and co-empowering. That's what it's about. It's a collective genius. India has no lack of individual top talents. It may be over-represented internationally, but what it has to develop is that collective capability, co-empowerment, co-creation and having a high degree of trust amongst each other. And that has to be the challenge. Co-empowerment and co-creation between the government and the private sector, together with NGOs, corporatives and people themselves. Co-creation and co-empowerment between the centre and the states and the panchayats, both at the district and the village level.  Develop this collective capability for the next 25 years. That is India's promise. And if India succeeds, as I believe it will, it will be not just uplifting one-fifth of the world's population. It will also be showing the way for many others. Thank you very much. I thank honourable senior minister from Singapore, Sri Tharman Shanmugaratnam, for this comprehensive inaugural lecture on India's journey towards growth with inclusivity and inclusivity with growth. Now, I would like to request the Prime Minister to present himself to all of us. Today's day is a day of unfulfilled courage and unbearable pain. My dear friend and former Prime Minister of Japan, Mr. Srinjo Abe is no longer among us. Mr. Abe was my friend. He was India's only security friend. In his career, in India, in Japan, he had a political relationship with us. He got a new height. We have furthered our relationship with both the countries. Today, with the help of the development of India, with the help of Japan, the work that is being done here, their efforts, Mr. Srinjo Abe is born in India. He will live for many years. Once again, I would like to express my condolences to my friend and former Prime Minister. Dear friends, today's day is a day of unfulfilled courage and unbearable pain. In the past few days, there were a lot of things about him. There were a lot of things related to him. He came to his senses. I am seeing a lot of his old friends here. His oratory, we were all friends with him. And his one-liner, he used to stay in the air for a long time. His personality was full of different kinds of friends. All the different jobs here are different worlds. But all were friends with him. He was the best friend of Arun. His personality was this good friend. Everyone still remembers him. And everyone feels the lack of Arun. I give my condolences to Mr. Arun Jetli. Friends, the subject of Arun's lecture is growth through inclusivity. Inclusivity through growth. It is the main mantra of the government's development policy. I am grateful to Mr. Harman, that he accepted our mantra. And I have heard him many times. I have been reading him. In his talks, not only in India, but also in other countries of the world, he does a lot of research. Local touch, in his academic thinking, in his philosophy, he does it in a very strict way. Even today, we have experienced it. He has done very well. He has brought us to our country with the help of our children. I am very grateful to him for his time. Friends, the subject of discussion here, about which Arun Jetli has started today, if I say it in a simple way, then I will say this theme in my simple, simple language, along with everyone's development. But along with it, the theme of this lecture is the challenges facing today's policy makers and also captures the challenges. I would like to ask you all a question. Is it possible to grow without inclusion? Now ask yourself. Can we even think about inclusion without growth? As head of the government, I have had the opportunity to work for more than 20 years. And the support of my experiences is that there is no real growth without inclusion. And the aim of inclusion without growth cannot be fulfilled. And that is why we have studied the path of growth through inclusivity. We have tried our best. In the last eight years, India has worked with a tree for inclusion. The tree on which it has worked is such an example that you will never find it in the world. In the last eight years, India has given more than 9 crore women a free gas connection. 9 crore. This sign, South Africa, Australia, Singapore, New Zealand, even if you combine all its elements, it is more than that. That is, look at the scale. In the last eight years, India has given more than 10 crore toilets to the poor. Mr. Tharman has written it with great passion. This sign, is more than two times the total population of South Korea. In the last eight years, India has opened more than 45 crore bank accounts. This sign too, Japan, Germany, Britain, Italy, Mexico, even their total population is close to that. In the last eight years, India has made the poor a home of 3 crore. And I remember, once, in the ministry of ministry of ministry of ministry of ministry of ministry of ministry of ministry of ministry of ministry of ministry of minister of ministry of ministry, when I told them about how to grow, then Mr. Iswaran told me, when you see all month, you will have to grow more than that. I want to give you growth through inclusivity. To give you an encouragement through growth. In India, We had started the Ayushman Bharat Yodana a few years ago, which was done by Aulik Tharbanji and he also talked about health sector in the coming Pramukh sector. Because of this Yodana, more than 50 crore poor people are in good hospitals and in India, it is certain that there will be free treatment of up to 5 lakh rupees. 5 lakh rupees for 50 crore people is free treatment. Over the past 4 years, because of Ayushman Bharat, more than 3.5 crore people have got their free treatment. In this Yodana, we have focused on inclusion. The poor people who are in poverty are also getting good treatment for their health. And we have seen this with time. First of all, it is about inclusion. But time has not told us that the path of growth has also been made. Those who were first excluded, those who were connected to the main source of development, then demand has increased and opportunity for growth has also been established. When India's one third party, who were first excluded from the best healthcare facilities, got treatment facilities, its direct impact was that the healthcare capacity had to be controlled accordingly. I will tell you how Ayushman Bharat Yodana has transformed the entire healthcare sector. Before 2014, the average of our country was about 50 medical colleges in 10 years. In 10 years, 50 medical colleges are in such a big country. Whereas in India, in the last 7-8 years, more than 4 times more medical colleges have been built than before. Now you can imagine, where 50 and where 209 are. And in the next 10 years, if I put it in this way, then this issue will continue. It will reach up to 400. In the last 7-8 years, in India, in the undergraduate medical seats, 75% has increased. Now in India, the annual total medical seats have increased by almost 2 times. This means that the country is getting a lot of doctors. In India, there is a high level of medical infrastructure. For the inclusion of this technology, we can see the impact of growth on the land. We can burn it. And I can tell you one thing. India's Digital India Biennial, which was done by that late Mr. Tharman, has reached 5 lakh common service centres. Even the poor living in the village have reached the power of the internet. In India, Bheem UPI has connected millions of people with the digital payment system. The Indian government has given the opportunity to connect the people with the banking system. We have the people in the city, in the capital, who are the people with the money. The bank manager will give the money for the ready-pattery at his house. But he will have to wake him up in the bank. This was the situation. Today, we have connected him. In the same way, India has done a lot of great work. The world has been writing on it for a long time. The international people are also writing. The big agencies are also rating it. India has an initiative called the Inspirational District Program. The people living in more than 100 districts in the country have been applying to millions of people. And the idea of the Inspirational District is that we should address the people who have been left behind in other districts of India. We should bring them to the level of the top position of the state. And then we should bring them to the level of the national top. Along with that, there has been such a big positive impact. And in a way, the inclusion of these 100 districts is happening in the world of development. India's national education policy and a very big paradigm shift. And in terms of education, Mr. Tharman has given a lot of strength to his speech. India's national education policy is in the mother tongue in the mother language. Those who don't know English, who are excluded, will now get a chance to study in the mother language and move forward. India's national education policy has led to many air strikes in the country. We have made a new airport, and we have also gone to the tier 2, tier 3 cities. And the national education policy has brought a fixed amount of travel to the airfield. The national education policy has connected different countries to the airfield. Even the poor have given a chance to fly into the airfield. And I used to say that even the people who wear the airfield will now be in the airfield. And inclusion is also happening, and growth is also happening. Today, there is so much growth in the aviation sector in India. More than 1000 new aircraft orders have been booked for the country. More than 1000 new aircraft orders have been bought in this country. Because the passenger inclusion approach is the same. Mr. Tharman, who I spoke to in Gujarat, who I worked with with great pleasure, is the Jal Jeevan Mission. Every home in the country is connected to pipe water supplies. It is not just water. It saves its time and hard work. For the health conditions, water is a big part of the country. All of these missions were very social. It is also related to the nutrition of the children. It is also related to water. To drink clean water is also a very important issue for the children and nutrition. And our Jal Abhyan from Nal is also a part of the great Abhyan who addresses that issue. In just three years, this mission has connected more than 6 crore homes to water. In India, the total amount of water is 27 crore homes. That means 6 crore homes have been watered. This inclusiveness is making the life of the people of this country easier. It is giving the opportunity to move forward. And how important it is in the development of any country is that you are sitting here. They know this very well. I want to give you an example. You also know. And I have seen that the UN also talks about it. The SDG also talks about it in its development goal. And it is saying that in the world, in many countries, property rights are a very big issue. And when we talk about property rights, the last people of the society are the most vulnerable. They do not have any responsibility. They have to face the most problems. But you will be happy to know that India is in this direction. It has worked very fast. It is a very important issue. And I believe that the world's academicians and the world's economists will pay attention to this issue.  Because of Swami Tva Yojana, in the rural area of the country, the mapping of the houses and buildings is going on a very high level. Up till now, in 1.5 lakh villages in India, we do this work with the help of drones. The survey is done by drones and the technology is used in a lot of ways. And the entire village is there when the whole process is done. And in more than 1.5 lakh villages, this survey has been done by drones. And it is 30,000 square kilometers. By drone, the mapping of 37,000 square kilometers of land has been done. That means the land is connected to those houses. And more than 80 lakhs of people have been made property cards. And this is also the benefit of the owner. He has a lot of thoughts with him. He has a lot of thoughts with his neighbors. He has a long vision. And this also means that it has been easy for the people of the village to get a bank loan. Their land is now being saved from legal violations. Along with that, today's India, instead of reforms by compulsion, is preparing for the 25th anniversary of reforms by convictions. If India makes 100 years of freedom, then where will India be? We are talking about this goal. We are moving forward by making a role. Earlier, the country saw that when reforms are in compulsion, its hopes of being institutionalized remain low. As soon as the compulsion ends, reforms are also forgotten. The more important reforms are, the more important the environment is. There is motivation. Earlier, there was a big reform in India, when there was no way for the previous governments to save it. We do not consider reforms as necessary, but as a win-win choice. There is also a win-win option in the country. In the past eight years, we have prepared any reforms for new reforms. And wherever they are today, they will be satisfied that the mission that they are running for, they are getting the benefit of the country. Is it GST or IBC? We have been discussing with them for years. Today we are facing their success. We have to decriminalize the company's act. We have to make corporate testries competitive. We have to open up space, coal mining and atomics sectors. There are so many reforms. Today is the truth of the 20th century of India. Our policy-making is based on the points of the people. We listen to more and more people. We understand their needs and their values. That is why we did not let the policy come under populist impulses. According to the people's points of view, what difference does it make to take a decision and put a weapon in front of populism? This is what India has seen during the Covid era. And it has shown the world. What was the great meaning of it? It was like a pandemic. When the pandemic came, there was populist impulses for the bailout package and demand-driven recovery. We were also under pressure. We had no control over it. We were not doing anything. We were not giving anything. I don't know what we were told. People wanted it. Experts wanted it. Many scholars wanted it. But India did not come under pressure. So, they came up with a different approach. They came up with a peaceful mind. With the people-first approach, we protected the poor. We focused on women, farmers and MSMs. We were able to do it in a different way from the world. Because what people want is what they are concerned about. So, we can see the difference between the recovery of India and the rest of the world. Friends, I was often against the maximum government and the maximum governance. Our government has killed 1,500 such laws which had been interfering in people's lives in an unnecessary manner. 1,500 laws. And I remember in 2013, when the Indian People's Party made me a PM candidate. I had to be elected in 2014. In Delhi, people from the business world called me for a job. It was a hot topic. What would you do? What would you do? Would you make this law or not? It was a huge pressure. It was a candidate. It was important during the elections. I said, you want to make a law, but I promise you one thing. I will finish every day this law. I won't give you the guarantee to make a new one. I will finish it. And in the first five years, I have completed the task of finishing 1,500 laws. Friends, the laws are a burden on the public. Friends, you will be happy to know. Our government has more than 30,000, that is, you will be shocked. More than 30,000 have also reduced the compliances that were made in the ease of living business and in the ease of living. To finish 30,000 compliances, that is, the youth of Abhutpur and the youth of Janata and Janardhan, the result is that we are freeing the people from the burden of the compliances. And I had told Mr. Lal Kilipur that I want to take out the government as much as I can. The government of people's lives, the effect of the government is at least but whoever needs the government, should not be influenced by the government. We have tried to take these two things with us. Today I am happy to tell you that the approach of the minimum government is giving maximum outputs and maximum outcomes. We are investing our capacity very quickly and the result is right in front of you. Take the example of the Covid vaccine. Our country's private players have done a very good job. But behind them, the partner in progress, in the form of a partner in progress, the government was standing with full power. By the isolation of the virus, by the speedy trial, by the funding, by the rapid rollout of the companies that were conducting the vaccine, they got a lot of support from the government. Another example of our space ecosystem is that in the world of India, there is one of the most reliable space service providers. In this area too, our private sector ecosystem is doing a great job. But behind them, in the form of a partner in progress, the government has full power which is helping them to get every piece of information. When we take the example of the digital payment ecosystem of India, there are many players connected to the digital payment with Fintech. But behind them too, there is a strong foundation of Jantinity, Roupa, UPI and supportive policies. I have only taken some examples but for the world, I consider them to be research, to go deeper into the academic world. I consider them to be economic, let's see the details of it. There are many needs in this vast country. How are we moving forward? If you look at it in one way, the private sector or the government is talking about extreme models. Now it is time for the government to take the private sector as a partner in progress and help them and we are moving forward in this direction. Friends, taking everyone together to trust the public and the private donors is the spirit of trusting the public. Because of this, India is looking to improve its growth. Today, our export is making a new record. The service sector is also moving forward in the direction of growth. The effect of the PLI scheme is visible on the manufacturing sector. Mobile, phone, in the entire electronic manufacturing sector, many crimes have been committed. You will be surprised to know that during this corona period, I took the toy and submitted it. There were no toys. So many people thought that this PM is talking about a broom, he is talking about a toilet, he is talking about the toy. Many people have been stuck in many things. I was not able to sit properly. I only focused on the toys. I focused on the makers. I focused on technology. I focused on innovation. I focused on the financial sector. It has not been two years. My country will be proud that the import of toys is so limited. It is so crowded. We used to have foreign toys in every house. The import is so limited. Not only that, the toys of India, the toys of India, the import of the toys has been more than that today. That means, there is so much potential. You said tourism. I agree with you. There is so much potential for tourism in India. But we were stuck in one place. We said that we would take it in front of the entire world of India. I don't know. I had lost my mind. I am a foreign guest. So, I prefer to take it in some other place in India. Because I did not do tourism on purpose. So, I did it on purpose so that people would know that there is such a destination of tourism here. You said it right. There is so much attention for the whole world. Our digital economy is moving fast. The record is increasing in the physical and digital infrastructure. That means, the growth of our industry is going on in every sector. Friends, this is a very important opportunity for India. We are sure that we have an idea. I am sure that we will prove our ideas. In the 21st century, we will achieve that goal which India is worthy of. And as I was telling you, there are challenges. But if there are challenges, then there are 130 crore solutions. That is my faith. And with that faith, we are moving forward with the challenges. And that is why we have taken the path of inclusion. And that is why we have started to create our digital economy. And it is very important for India. We are not making a lot of money. We are making a lot of money. We are not making much money. We are doing a lot of money. We are doing a lot of work. We are doing a lot of work. I request all the dignitaries on the dais to take their place among the audience. With the context set by senior minister, Honorable Shri Shanmugaratnam, on the theme of today's lecture and an inspirational address by Honorable Prime Minister, now is the time for a brief discussion and we have with us Shri N. K. Singh, Shri Arvind Panagariya and Shri Mathai Skarman. I will request all three of them to take their seats on the dais. Shri N. K. Singh, as we are all aware, is a prominent Indian economist, former chairman of finance commission and president of Institute of Economic Growth. Shri Arvind Panagariya is a prominent Indian-American economist, published author and has served as the first vice-chairman of Niti Aayog. Shri Mathai Skarman is a distinguished diplomat who currently serves as security general of Organization for Economic Cooperation and Development over to the panelists to take us through the panel discussion. Thank you very much. I'm indeed privileged and honored for this opportunity for moderating a brief panel discussion after the far-reaching address of the senior minister embellished by the Prime Minister's visionary address. So looking at what senior minister said, I'm first going to request the two distinguished panelists who have already been introduced to make their brief introductory remarks in the context of the broad theme outlined by the senior minister and in many ways given an Indian dimension. I request them to make their intervention brief so that we are also able to have a Q&A a little after that and the time will be adequate. So first can I request you, Mathias, and you have already been introduced, but may I just add that you were indeed one of the personal friends of Mr. Jaitley and there was a common passion which you shared, the passion for cricket, coming as you do from Australia. So Mathias. Thank you very much, Enkai. It's a pretty hard act to follow after senior minister Tharman and indeed after Prime Minister Modi. But look, it's a great privilege to be here. It's great to see Finance Minister Nirmala, Sita Raman, and of course Madam Jaitley, and friends of family and friends of Aaron. It is an honor to be offered the opportunity to say just a few words on the occasion of this inaugural Aaron Jaitley lecture. I admired Aaron Jaitley, yes of course in terms of what he achieved as Finance Minister and I think Tharman would agree that among Finance Ministers Aaron Jaitley was like a global rock star. But more importantly for me I admired Aaron Jaitley because of who he was and because of the incredible richness of the life he lived. Throughout his life Aaron was a man of great courage, of great moral integrity and indeed of great generosity including to me and so I'm so pleased that you have established this memorial lecture in his honor and I'm so pleased that you have chosen such a distinguished leader in Tharman to give the inaugural lecture. Under Prime Minister Modi's leadership Aaron steered India's fiscal and structural modernization and reform agenda. He secured as has been mentioned major tax reform with the implementation of a national goods and services tax replacing a multitude of indirect national and state taxes. He pursued a series of other reforms but Aaron was a strong voice for India on the world stage and from the OECD's point of view, from the point of view of the organization for economic cooperation development we benefited greatly from our collaboration with him. In particular he worked with us on international tax reform with India formally joining the OECD G20 initiated convention to prevent a bias erosion and profit shifting. Just moving through things quickly as I've been asked by my friend Enkai to do, Aaron and us has been touched on by Tharman had a very clear understanding that to be sustainable and sustained economic expansion had to be inclusive that the benefits of economic development and growth had to be widely shared and had to reach the poor and the most vulnerable but he also understood and the Prime Minister has really honed in on this point in his address to us tonight as well to drive inclusion and social cohesion we need economic development and growth and Aaron advocated for growth as a mechanism to pull as many people out of poverty as possible to improve people's quality of life to improve the opportunities for people to get ahead always conscious of the need to make growth inclusive and not leave anyone behind. Equality of opportunity through better access to essential services, to education, to health, to employment is what underpins the aspirational promise of merit based social mobility in free democratic nations. Really utilizing our human capital is central to driving better opportunities for all and India has made incredible strides in this regard 75 years on from independence India is not only the world's largest democracy but also a major strongly growing positive force in the global economy. Your strong growth among the highest in the world over the past two decades has already lifted hundreds of millions of people out of poverty and has been referenced. The government of India under Prime Minister Modi's leadership has of course great ambitions to keep driving strong growth but growth which is stronger by being inclusive and sustainable. There is much work to be done in India and globally. Tharman is absolutely right. The world needs Indian leadership to help solve some of the evolving global challenges of our time. I was privileged to have the opportunity this morning to discuss this with Prime Minister Modi. The world would benefit so much from India's cooperation driven approach to multilateralism helping to bridge some of the current divides in the world to help solve some of the challenges and problems in front of us. As an organization committed to supporting better international cooperation to develop better policies for better lives, we look forward to working with Prime Minister Modi and his government in the course of India's G20 presidency next year to do exactly that and thank you for giving me the opportunity to say a few words. Thank you very much Mathias. Thank you for being so disciplined and adhering to the somewhat limited time we have and now request the distinguished co-panelist Arvind Pandarya to make his observation. Arvind. Let me also join everybody in saying that how privileged I feel to be here, how honored I feel with the generosity of the Prime Minister. I got to serve alongside Jayathliji and all the qualities that have been described off him, I had the chance to observe those firsthand and let me also say that I was great beneficiary during the three years that I was serving in the government of the helpful nature and all the assistance that Jayathliji was always there to give me whenever I sought his help. He never failed, absolutely never. Very quickly, just to add my own remarks here, maybe I will take one specific theme that came from the distinguished lecture. This was about the deep legacies that Mr. Shanmugrathna mentioned and one particular deep legacy that we really inherited from the beginning, the way the Indian growth process was unfolded, had to do with very initial emphasis on heavy industry. And here I want to draw this particular, you know, that growth is important for inclusion, that we understood. On the very early on, you know, you go back to Congress's discussions in 1930s and all, that growth was critical without growth, we could not uplift people out of poverty. I think what got really missed is that the growth process itself has to be inclusive for growth to be sufficiently high that you actually achieve the inclusion that is essential. We emphasized heavy industries, savings were very low, 7% of the GDP at the time, very low GDP to begin with. So practically those savings got invested in three or four steel mills, rest of the population workforce was left completely out of the benefits that could come from growth. So some growth did happen, but it was growth without inclusion, therefore it was not very high growth, 4% or 5%. And all the reforms that we have been doing starting from 1991 and very much accelerated in the last eight years have to do with making the growth process itself inclusive. So we have understood that health, education, etc. are essential for inclusion, but it is growth process itself, what is the quality of growth, does growth bring the workforce directly into economic mainstream is critical actually to achieving high growth. And this is what the East Asian economies, so if I could call this India's model as the narrow model versus the East Asian one as the Leakwanyu model, then the Leakwanyu model kind of understood this and therefore it was driven by very much labor intensive manufacturing growth which brought the last part of the population into mainstream of the growth. So growth itself could be actually very high 8% to 10%, and so that of course gave the revenues also for the government to promote rapidly education, health and all the other social expenditures. And so I think this is the big difference now with the GST, with the labor law reforms that have been done for 15 years, we have been arguing for those, the economists finally Prime Minister Modi has also done those labor law reforms, the corporate profit tax reform, the definitional change of all these small, medium and micro firms which now open up those categories much wider. All of these facts make I think for inclusion in the growth process and therefore not only that would promote immediately inclusion but it will also give rise to in the forthcoming 25 years significantly higher growth rates and therefore allow us to promote inclusion yet more. So I'll stop there. Thank you. Thank you very much. Thank you Arvind. I have this great privilege of asking one or two questions if I might. So drawing some inspiration from the senior minister's speech and the Prime Minister's vision particularly in converting the great challenge of the pandemic into a historic opportunity to take forward our entire reform strategy. The senior minister you referred to an unusual confluence of challenges with the global economy faces and these challenges which you mentioned are several. These challenges which entail national security driven by the unusual circumstances which we have have obviously compelled many nations particularly nations in Europe to become increasingly inward looking. India has avoided that degree of conflict between pursuing with economic reform strategy along with ensuring that the internal security of India and some of the important challenges do not remain under addressed. Mathias looking at your own experience how would you see the symmetry between the challenge of national security and the challenge of ensuring that the forces of globalization particularly international trade value added chain comparative factor advantages comparative costs which are productivity enhancing are in some ways or pursue the same common path. I'm going to ask you Arvind the same question because you keep writing brilliantly on the need to open up on the trade sector. Do you see any contradiction between the two but first to you Mathias. The first point I would make is that while the global rules by striding system has for some time been under pressure and some of these pressures have come to the fore in the context of the pandemic and also more recently in the context of the war in Ukraine with supply chain challenges and so on I mean overall our global markets continue to perform very well and I agree with Tharman I mean global trade is growing and I still believe that countries around the world doing more business with each other and increased economic integration increased alignment of economic interest is a very powerful driver not only of a lifting of living standards but also of increasing stability and peace. Now of course I mean the challenges and the things that need to be resolved and indeed I mean it's important that there is a sustainable and sustained new consensus around what the rules of the game ought to be in the current global context but the principles of countries around the world and people around the world contributing into global value shines what they can do best at the lowest possible cost I mean I still think is a principle that works very well and in the context of the pandemic well much has been said that global value shines were much more resilient than what might have been said from time to time and if supply chains were under pressure in the latter part or in the second year of the pandemic it was because the recovery was so strong and the composition of that strong recovery in demand was so different that the supply logistics in the context of the pandemic were finding it hard to keep up but fundamentally our global market is working well there are things that need to be adjusted and I think countries around the world doing more business with each other investing more into each other's economies through the free flow of capital is a powerful driver for increased peace and stability let me make two points which have been implicitly made here one increased risk always requires diversification and so today a lot of the multinationals are looking for diversification to other countries in China has been the center of their activity for the last two decades but now they seek diversification that opens new opportunities so I think every challenge comes with an opportunity so that's the first point but the second one is which of course the senior minister very much expanded that on the surface it seems that there's a lot of you know backlash on trade and globalization going on that all the trade war that broke out between the United States and China but if you actually look at the outcomes it is remarkable how in spite of covid and these tensions trade has continued to flourish so you know the decline in trade during covid year 2020 was about 6% and it bounced back very quickly by the end of the last quarter of 2020 trade was back and and today total trade is 28.5 trillion dollars which is 3 trillion more than the pre covid peak that we had observed before so I think you know opportunities will remain economic incentives profit incentive is just too powerful and today in spite of everything else the economy is far more open than it was when Korea's Taiwan Singapore's etc made their rapid growth so I will not be pessimistic thank you my second question is that one of the themes of the senior minister was the challenges of an orderly transition to an era of sustainable growth particularly climate mentioned about the far-reaching contribution made by Prime Minister Mr Modi at the Glasgow 26 when he outlined the panchamrith which became in some ways the mantra which guided the Glasgow 26. Let me ask you Matthews that considering the fact that you realize that very large capital is necessary and considering the limits of what public outlets can do and considering the fact that unfortunately developed countries have made enormous promises but have not followed those promises with the necessary transfer of capital it's necessary to incentivize private capital outlets which will be necessary to blend with public outlets for reaching those ambitious targets how do you think the international multilateral order and lending institutions can be restructured for meeting a better partnership between enhanced public outlets with enhanced private capital flows particularly on the issues of risk mitigation for private capital well thank you very much for that question firstly I mean developed economies did make promises to provide and mobilize $100 billion US a year in climate finance for developing economies and and that was meant to happen by 2020 it didn't happen by 2020 but we are tracking this and we now believe based on the data that we have in front of us that that goal will be reached by 2023 and then exceeded from there on in but that's not going to be enough I mean we will need trillions of investment and you're right I mean we will need to find ever better wise to leverage public investment to leverage into additional private investment and also to pursue blended finance opportunities to ensure that we can get the level of investment that is required but what is what is even more important on top of this when countries around the world including India have made commitments to transition to net zero emissions many countries by 2050 China by 2060 India by 2070 so there's now a trajectory there's a pathway there's a transition and you know the problem-solving spirits around the world the entrepreneur spirits around the world have to find wise that we can achieve that transition and in the best most sensible way possible but also different countries around the world using different approaches taking into account different circumstances and different opportunities all of that needs to be somehow brought together in a globally more coherent approach where we ensure that individual efforts in individual countries contribute to solving the actual problem that we're trying to solve and I think that's where there is scope for better dialogue sharing of information sharing of data of what works best what doesn't work so well sharing of technology to make sure that we really give every country around the world the best possible chance to get to the ultimate destination in the best possible way but also to avoid negative spillovers from uncoordinated action and that is an area in which we believe the OECD together with India and others might be able to help Arvind before you respond grateful to Matthews one of the issues which really is very troublesome is a just transition an orderly just transition and the residing of developed countries from commitments made long ago necessitates obviously a more innovative approach and perhaps you could say what those innovative approaches can be that's a very tough one NK if we really know the answers to that question he's been thinking all night about how he can ask us some tough questions on the way to solution but one of the things I think that should be done if there is some will then you know one of the that energy efficiency provides a great avenue to bring in carbon emissions down a lot of new technologies are coming but these are very high royalties to be paid I think you know we ought to use some of the climate finance provided by the foreign governments by the richer countries which have been responsible for much of the pollution that exists in the in the environment today and use those to actually pay part of these royalties and make the technologies available to the developing countries at either lower cost or free of charge I think that will go a long way towards solving the problem thank you very much I think that I wish to now thank both the distinguished panelists for not only their valuable observations but for making their responses we bring this session now to a close by expressing my gratitude to both of you for having really in many ways genuinely sought to answer some of these complex challenges thank you very much I thank honorable prime minister senior minister of Singapore all the panelists senior ministers of government of India family members diplomats and other dignitaries thank you very much for joining us on this inaugural Arun Jaitley memorial lecture I'll request everybody to remain seated first prime minister will leave for the next event with international delegates of KEC in the same building thereafter international delegates of the KEC will be requested that to move to the photo session and thereafter then the guest can leave thereafter thank you ladies and gentlemen everybody kindly remain seated requesting everybody to kindly remain seated we would request no movement in the hall so you see the picture you're looking at the Delhi state of


What's the next thing?  This is where the world is going and we have to get in it now and we have to be a part of it. Let me just pivot a little bit and ask you about Bitcoin ETFs. The ETF sales are hitting record highs again. The SEC has once again denied several proposals for a Bitcoin ETF. Every time we hear about Bitcoin ETFs in the news, we see a reaction in the market. Recently, an April Fool's Day joke about the SEC approving a Bitcoin ETF was cited as a possible reason for the huge price spike. So, why are ETFs so important to the crypto market? While Bitcoin was originally designed to be an alternative to the traditional financial markets, today Bitcoin actually needs those financial giants and in turn Wall Street is eyeing crypto as a potential golden goose and want to get in on the action. And this is how Bitcoin ETFs might help them. Institutions are out there to make money too and if they see a way to make money, they're going to go look for a way to participate in those markets. This is Hester Pierce, aka CryptoMom, a commissioner at the SEC and an outspoken advocate for Bitcoin. She agreed to speak with us about her personal attitude toward a Bitcoin ETF, but not necessarily the views of the commission as a whole. I think you've seen real interest from institutional investors at looking at this asset class and saying, hey, this is an asset class that allows us to diversify our portfolios more and so they want to have a way to invest in this asset class. One such company trying to build that path for institutional investors is Vanaq, a mutual fund with over a 60-year history and $50 billion in assets under management. Vanaq has been filing Bitcoin ETF applications to the SEC, but so far unsuccessfully. Bitcoin is widely available today to investors, but mostly on unregulated platforms. So these are trading platforms that people call crypto exchanges and so ETFs bring Bitcoin from this gray area to a regulated area so that investors who are not comfortable investing on trading platforms can access Bitcoin with more safeties and then securities, things that investors are used to in the equity and commodity markets. I think a lot of crypto exchanges are in some ways conflicted. They are custodians, traders, index providers, funds and perform a number of activities that are not performed by the same entity in financial services. So an ETF by design solves all of those problems that single centralized exchanges face. So here's the problem. Large institutions can't buy Bitcoin and crypto the same way that retail investors do. They need a regulatory approved mechanism. But before we get there, let's explain what an ETF is and how it actually works. ETFs are exchange-traded funds that are bought and sold like shares on a stock exchange. But instead of investing in a business, the fund can invest in a variety of things, such as an index of different companies, stocks, bonds or commodities like gold or oil or possibly soon Bitcoin. Essentially, the value of an ETF goes up or down depending on the value of the underlying asset. We met up with Richard Kirie, who's been working in the ETF industry for more than a decade to find out more about what ETFs actually are. Well ETF is just a vehicle, right? It's just an access field to access the market. So if the market goes up, you're making money. If the market goes down, you're not making money. The sponsor of the fund and the owner of the trust is the one who holds all the Bitcoin. So in other words, when an investor comes in and says, okay, here's $10,000, then the advisor goes out and buys $10,000 worth of Bitcoin or put it into his server, which is going to be in a vault and it's going to be secured. And then the investor is going to be issued shares. And then he can trade all day long in and out of the market with those shares. He doesn't have to go back to a Bitcoin market anymore. He can just trade his shares up and down however he wants. So with Bitcoin as the underlying asset, the sponsor of the ETF will buy Bitcoin from authorized regulated bodies called market makers and hold the bitcoins in a secure place. When more investment comes in, the ETF sponsor will purchase and hold more Bitcoin. And when investors want to pull their money out of the fund, the sponsor will liquidate the assets by selling them back to those market makers. In order to facilitate easy entrants and exits, the fund will rely on Bitcoin futures contracts to offset their risk. A fund is basically a pooled investment vehicle that multiple investors can invest in and it trades real time on an exchange like NASDAQ, SIBO or NAISI, so there's real time pricing to it. There are larger companies called authorized participants who buy the underlying Bitcoin. And the ETF issuer swaps ETF shares to the underlying shares. That works the same way with the S&P 500 and other equities and bonds. The cool thing about it is that authorized participants are encouraged to add liquidity and buy underlying Bitcoin at every time, thereby increasing the overall liquidity of the ETF. So there's always a list of market makers who are ready to buy and sell shares and exchange it for ETF shares and making this process of buying and selling more seamless than it is to go to an exchange directly. So an ETF actually, the great thing about, from a liquidity perspective, the great thing about an ETF that reaches out to all of the liquidity pools that are available plus adds an extra level by virtue of having an ETF in the market. By owning a share of the Bitcoin ETF, you own the underlying Bitcoin in a one-to-one correspondence.  They account for about a quarter of the daily trading volume in US stock markets, sometimes even reaching up to 40%. Assets invested in ETFs listed globally have reached $5.3 trillion, with an average growth rate of about 20% per year. BlackRock, a leading asset manager, predicts the global ETF market could double by 2023. An institutional investor may invest somewhere between 0.3% to 0.7%, but less than 1% certainly to something like a Bitcoin ETF. So that's one school of thought. The second is, there are some investors who are interested in an early venture type of investing. So they think about Bitcoin as a technology. So they use their venture allocation bucket to put a little bit of money, just 0.2 to 0.5% of their portfolio value. Half a percent doesn't sound like very much, but just take the 50 largest institutional investors. They hold almost $42 trillion in assets under management. And so if just 0.5% of their assets are invested in Bitcoin ETFs, it means a whopping $200 billion added to the market, which is even more than the whole crypto market is today. So even a fraction of that money can be a significant game changer. But before billions of institutional dollars will flood the crypto market, the SEC needs to give their approval for a Bitcoin ETF. The question of what our official position is on cryptocurrency is a broad one and there's no single answer to that. When someone wants to build an ETF on top of a crypto asset, we should sort of approach it in the same way that we would approach someone building an ETF on top of any other asset. Unfortunately, we haven't always taken the right approach in approving ETFs, even for things like gold. People who haven't dealt with a regulator very often, especially a regulator like the SEC, don't realize how long things can actually take. And this is true as the process for getting a Bitcoin ETF on the market started all the way back in 2013, when Winklevoss twins first made their proposal. And nearly six years later, it's still hard to know how much longer the road toward approval might be. The SEC has been afraid to push these products onto the market lest things happen to consumers that, in the end, would redown to the regulator and leave them with egg on their face. This is David Yermak, professor of finance at NYU Stern School of Business, who has been teaching courses on Bitcoin and cryptocurrencies. We sat down with him to get an academic's view on the possibility of a Bitcoin ETF. There have been a number of concerns about the underlying assets that typically an ETF holds liquid securities, stocks, and bonds, maybe things like precious metals and commodities. But crypto assets, it's not clear to the regulator what these are, what assures the security of them, even what the market price of the underlying asset may be on a given day because the trading of crypto assets is in fairly ill-liquid markets that often show very different prices, even at the same time. Exchange-traded funds have been around for a long time, and we're just now getting around to proposing a rule to build a framework within which exchange-traded funds can live. Until now, we've been doing it by exemptive order, which is a very slow, cumbersome process, which makes it very difficult for new entrants to come in and compete in this space, and which means that the standards that apply to each participant are not necessarily uniform. And so that's a great lesson for people to know. Wow, this exchange-traded funds, which are so prevalent in our markets now, don't even yet have their own regulatory framework. So what's stopping the SEC from approving Bitcoin ETFs? So from a SEC perspective on financial products on the marketplace, they need to see enough liquidity that everything gets bought, can easily be sold, that it's a fluid market. The other thing is price manipulation. That's the biggest thing that SEC is afraid of. Their job is to protect investors and to keep markets fair and reliable and trustworthy. So in order to do that, they have surveillance processes in place today across a variety of asset classes, wherever that trading market is, they have to have an information-sharing agreement with the exchange where the product is listed. And so they can track a trade, an individual trade, back to the person who entered the original order. So until that's in place, it's unlikely that they're going to approve it because they're not going to be comfortable about price manipulation. So what is the future of Bitcoin ETFs and will we see them approved? Everyone we talked to seemed to believe that it was simply a matter of time, as investors at every level are still enthusiastic about this new asset class. There's so much pressure for these products on the demand side that one way or another the regulator is going to see its way into finding a loophole or a regulation that allows them to come to the market. I think there's a great risk to the SEC that it becomes irrelevant in the long run if people start raising money through ICOs and crypto ETFs and so forth and they simply refuse to regulate them. People will find ways to own them and the market may go offshore, it may go into the commodities area. I think in the long run, the SEC, if they want to keep its mandate to regulate investments, will have to find a way to allow these things into the market. That's the reality, that there's a great demand for this and that one way or another, regulators eventually going to validate that demand. I think if we don't make routes available to folks, they will find another way to get access to the market. And this is something that quite a few people are concerned about. The SEC has opened up the discussion so that anyone can comment on it and some are wondering why the SEC isn't approving it, since it at least provides more safety than investors buying Bitcoin on unregulated exchanges. The most common response I get is, when is a Bitcoin ETF going to be approved? And you know, again, I'm not going to be able to predict. Do encourage people to come on in, talk to me about the projects you're working on, talk to me about the ideas that you have, talk to me about the problems that you're running into. And it should be noted that not everyone wants a Bitcoin ETF approved. Many comments question the realness of Bitcoin and fear that the whole thing is just a scam. But in a somewhat chicken-or-the-egg scenario, a Bitcoin ETF would actually make Bitcoin more real, at least in the sense of a store of value. And actually, I think it's very important to have proper financial tools for asset classes. And Bitcoin right now is a nascent asset class. And once an ETF exists, it can be taught of more of a store of value instrument than right now. A Bitcoin ETF would be a huge deal for the crypto community. It will not only bring new investors with deep pockets, but it will also legitimize Bitcoin as a new asset class. So whether it's tomorrow, next week, next month, next year, etc., one thing is clear. It's definitely when. It's not if. It's definitely when. Coin Telegraph. Like, subscribe, and hodl.


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