India's growth at 7% a mark of achievement in current scenario: Joseph Stiglitz

NEW DELHI: Nobel laureate and economist Joseph Stiglitz on Friday said that India's growth at 7% is a mark of achievement in the current global scenario. Speaking to ET NOW, he said that India can afford a high deficit if invested for larger capex.

Stiglitz said that India's knowledge, economy and democracy is its strength. Commenting on the economic growth, he said, "Today, we look with amazement at some of the rates of growth in the emerging markets. That growth is not small measure because these countries have learned how to close the knowledge gap."

He also said the emerging countries have learnt to close the knowledge gap with the developed countries. The economist also cautioned India that it cannot afford to waste its resources to mitigate the impact of economic crisis.

He said that the US economy is far from being completely healthy, and the government had 'wasted' resources to mitigate the scale of devastation in the country's financial sector brought about by the recession.

"Let this be a warning for India. America is a rich country that can, perhaps, afford such waste. India is not," he said.

The economist stressed on the need for the government to play a major role in the growth and development of a "learning" society and not everything should be left to the market forces.

Stiglitz said that 'unfettered markets' in the US had led to the world-wide economic crisis which surfaced in 2008.

Speaking on the current financial crisis in Europe, Stiglitz said, "2012 may see negative growth in eurozone countries and there is a 50:50 chance of eurozone crisis woresening.

Stiglitz said that he did not foresee a full blown economic fallout in eurozone but also did not agree with many European countries' austerity measures. "Too much focus on austerity will stifle growth," he added.