Delivering the Jawaharlal Nehru Memorial lecture in New Delhi on Friday, Silva said an International Monetary Fund report in April suggested the combined economies of developing countries will surpass that of the developed countries.
"The world's political order should reflect this reality and not the balance of power after World war II," he said and added countries of Latin America and Africa and an important country like India should find a place as permanent members of the United Nations Security Council.
Vice President M Hamid Ansari, Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi were among those present at the lecture.
Silva said the global financial crisis of 2008, the impact of which was being felt till date and especially by the more vulnerable countries in Europe, required a rethink about the governance and economic system across the globe.
"Crises and deadlock, when they occur have also this advantage, they force us to think," he said quoting Nehru.
"Free market does not have a magic wand to regulate themselves," Silva said and added more regulatory measures were required than measures like "austerity and bank bail-outs."
The former Brazilian President stressed the need for developing a new psyche of sustainable development based on inclusion of poor citizens and marginalised population.
"In my country, this was the path that led us to sustainable development. The poor were not seen as problem but part of the solution," he said.
Silva said that by following a policy of social inclusion through schemes such as income transfers to poor, wage increase and creating conditions like beneficiaries sending their children to school "we strengthen the positive aspects of state regulation".
He said while the rest of the world felt the impact of the economic crises of 2008, "Brazil came out of the crisis bigger and better."
He said Brazil now is the sixth largest economy in the world and by 2016 it could well become the fifth largest.
Speaking about Brazil's economic performance during his own tenure as President, Silva said that in ten years 17 million jobs were created.
He said that during this time the income of the poor grew more than that of the rich and that 28 million people were lifted out of poverty.
This was the largest social mobility seen in the history of Brazil, he said and added "social inclusion was the key to growth." "I talk about Brazil but I am aware that a similar "programme is being followed in India," he added.
Silva said countries must focus more on our agriculture, power plants, rail, roads and above all education".
Earlier speaking about India, Silva said the country had attracted attention of the world when it was unified under the doctrine of non violence under the leadership of Mahatama Gandhi.
He said that along with Gandhi, Pandit Jawaharlal Nehru had created a path for social development of the country.
Silva called for creation of a new global order which is more just and based on the principle of mutual respect to all the people of the world.
Earlier the UPA chairperson Sonia Gandhi showered lavish praise on Silva saying "it is a rare human being who traverses the full arch of human possibilities" and the former Brazilian president was one such person.
"From being a humble shoe shine boy at the age of 12, he (Silva) rose to be the President of his great country," she said.