From UPSC perspective, the following things are important :
Prelims level : Statistical data
Mains level : Growth sectors
India’s robust economic growth faces challenges in digital inclusion, governance equity, and managing post-COVID-19 effects. Government initiatives, encompassing reforms, infrastructure focus, and poverty alleviation, drive progress. Recognizing successes and addressing shortcomings is vital for informed public discourse and sustained development momentum.
- Impressive Economic Growth: India’s post-COVID-19 economic growth is remarkable, with FY2023 showing a YoY growth of 7.2%, the fastest among major economies.
- Policy Reforms Driving Growth: Government initiatives, including economic liberalization, Insolvency and Bankruptcy Code (IBC), demonetization, GST, and corporate tax reduction, have propelled India’s economic trajectory.
- Inclusive Growth Focus: The government’s commitment to “Sabka Saath Sabka Vikas” reflects in poverty alleviation, rural welfare, and inclusive growth measures, leading to improved living standards.
- Multidimensional Poverty Reduction: NITI Aayog’s report indicates a significant reduction in multidimensional poverty, with 13.5 crore Indians escaping poverty between 2015-16 and 2019-21.
- Agricultural Success: Support for agriculture has resulted in unprecedented growth in fruits, vegetables, dairy, livestock, and fishery, enhancing the nutritional value of the food basket.
- Critique of Growth Metrics: Some critics argue for using compound annual growth rates post-COVID-19, questioning the validity of YoY growth rates as a true measure of economic progress.
- Long Road to High-Income Status: Acknowledging the challenges, India recognizes the need for sustained efforts to achieve high-income status and a high quality of life for its citizens.
Key Phrases for mains value addition:
- “Fastest-growing major economy”: The tagline emphasizes India’s rapid economic growth in the global context, driven by its large size and robust domestic demand.
- “Sabka Saath Sabka Vikas”: The government’s inclusive growth mantra focusing on uplifting people above the poverty line through various support initiatives.
- “Multidimensional Poverty”: NITI Aayog’s report highlights a significant decline in multidimensional poverty, reflecting comprehensive progress.
The article underscores the importance of considering YoY growth rates as a measure of post-pandemic progress and highlights the success of government reforms in driving economic growth and inclusive development.
Key Facts/Data for value addition:
- India is the fifth largest economy globally and projected to become the third largest by 2027.
- The Capex budget of the central government has risen from 1.6% of GDP in FY19 to 2.7% in FY23, further budgeted to increase to 3.3% in FY24.
Government Measures Since 2014:
- Government initiatives post-2014 aim to boost the economy, including liberalization, the Insolvency and Bankruptcy Code, demonetization, GST rollout, and corporate tax reduction.
- In FY22, a substantial Capex program and state-level resource support aimed to bridge infrastructure gaps and attract private corporate investment.
Poverty Alleviation and Rural Welfare:
- Government commitment to ‘Sabka Saath Sabka Vikas’ reflects a focus on inclusive growth, poverty reduction, skill development, and infrastructure enhancement.
- NITI Aayog’s report highlights a significant reduction in multidimensional poverty, particularly in rural areas, with improved living standards and health indicators.
Innovative Way Forward:
- Digital Inclusion for Economic Growth: Accelerate digital inclusion strategies to empower citizens, enhance education, and facilitate online business, fostering economic growth.
- Green Infrastructure Development: Prioritize sustainable and green infrastructure projects, aligning with global environmental goals, to ensure long-term economic resilience.
- Blockchain for Financial Inclusion: Leverage blockchain technology to enhance financial inclusion, enabling secure and transparent transactions, especially in rural and underserved areas.
- AI-driven Skill Development: Implement artificial intelligence (AI) in skill development programs, customizing learning paths and enhancing employability in emerging sectors.