duvvuri subbarao : achieving inclusive growth – the challenge of a new era welcome remarks by dr duvvuri subbarao, governor of the reserve bank of india, at the 13th l. k. jha memorial lecture, mumbai, 27 september 2012. * * * on behalf of the reserve bank of india, i have great pleasure in welcoming hon ’ ble mr. tharman shanmugaratnam, deputy prime minister of singapore, who will shortly be delivering the l. k. jha memorial lecture. i also have pleasure in acknowledging the presence here of members of the family of late dr. l. k. jha – smt. dipika maharaj singh, smt. sharika glover and kiron glover. your presence here means a lot to us. thank you very much. a warm welcome, of course, to all our distinguished invitees who have made time and to be here for this lecture. dr. l. k. jha history will remember dr. l. k. jha as one of india ’ s most distinguished civil servants. with a remarkable career as an economic administrator and several impressive accomplishments to his credit, he has been a role model for generations of civil servants. after graduating from the banaras hindu university, “ lk ”, as he was popularly known, went on to study at trinity college, cambridge where he was a student of legendary economists such as a. c. pigou, j. m. keynes and d. h. robertson. he joined the indian civil service in 1936. after an early career in bihar, he was seconded to government of india in 1942 where he served in several important positions, and ended up in the pivotal job of secretary to the prime minister. dr. jha was governor of the reserve bank from july 1967 to may 1970, at a time when our economy was going through one of its most challenging phases. the country was shaken by food security concerns, and initiatives to redress them resulted in the much celebrated “ green revolution ”. through his leadership, governor jha made the reserve bank an influential force in shaping these initiatives. the distress suffered by the poor because of the overall scarcity situation resulted in poverty reduction becoming the overarching consideration of all policy. the reserve bank, under dr. jha ’ s stewardship, contributed to designing and implementing many of these anti - poverty policies. after his tenure in the reserve bank, dr. j

all because there is no longer any exchange rate risk and because transaction costs are lower. austria is doing very well in international markets : at nearly 34 %, austria recorded the highest export share of gdp ever in 2000. this ratio had come to only 25 % when the country joined the eu and had risen to just under 30 % before participation in emu. not only did emu and the euro improve the external economic environment, it also required business and industry to make incisive operational and technical changes. companies had to establish new strategic positions on their markets and had to adjust to the more intense competition, which has shifted more and more to quality considerations. the euro and the single market have boosted product and service innovation in many areas and have thus added to europe's competitive strength. turning briefly to the developments during the first three years of emu, they bear impressive testimony to the fact that the smooth interplay between monetary and fiscal policy provides a solid foundation which was well suited to weathering the economic policy challenges of this period. monetary union and the euro have kept the euro area countries from being exposed to harmful intraeuropean exchange rate tensions of the type that many countries used to suffer when external shocks occurred. some of you may have not so fond memories of the ems crises of the years 1992 and 1993. it has become quite obvious that austria's inclusion in the stability - oriented economic and monetary union has protected our country from negative shocks much more adequately than was possible under past regimes. beyond emu – further political integration and enlargement emu represents a quantum leap in integration, a key step in completing the single european market. of course, competition is most pronounced within emu itself. monetary union - and only monetary union - guarantees that the single market can utilize the full potential of its economic power on the basis of a stable common currency and that the growing pressure of international competition on europe is buffered. the deepening of the european union that accompanies emu and the euro is therefore not simply the most suitable response to internationalization and globalization, but also a bulwark against any maneuvers to reverse liberalization in europe. deepening of european integration is crucial especially for small open economies like austria and luxembourg. by introducing the euro, european economic policymakers have assumed the responsibility for exploiting the opportunities and for addressing the challenges this move represents for austria or luxembourg and for europe as a whole. we must continue to observe the provisions of the stability and growth pact,