- India can become an upper-middle-income country by 2047 if it manages to achieve a sustained growth rate of 7 to 7.5 percent for the next 25 years.
- And at this growth rate, India can become a 20 trillion dollar economy by 2047.
- This was asserted by the Chairman of the Economic Advisory Council to the PM, Bibek Debroy, while releasing ‘The Competitiveness Roadmap for India@100’.
What is the news?
- With a GDP of 2.7 trillion dollars, India is currently the world’s sixth largest economy and is classified as a developing nation.
- PM has set an ambitious target of making India a developed nation by 2047.
So what will it take India to achieve the status of a developed nation? What should be the roadmap for the country for the next 25 years?
What one means by a Developed Country?
- A developed country is typically characterized by:
- A relatively high level of economic growth,
- General standard of living, and
- Higher per capita income as well as
- Performing well on the Human Development Index (HDI), which includes education, literacy and health
Highlights of the Report: Competitiveness Roadmap for India@100
The roadmap, which is a component of the India Competitiveness Initiative, will assist in the development of roadmaps for certain Indian states and industries.
The competitiveness framework created by Professor Michael E. Porter serves as the foundation for the Competitiveness roadmap for India@100.
The India@100 roadmap, which is based on a competitiveness strategy, lays the path for India to achieve high-income status by 2047 by implementing sector- and region-specific policies based on the “4 S” principles. The competitiveness strategy emphasizes productivity as a source of sustained prosperity.
What are the “4 S” guiding principles?
It emphasizes the need for prosperity growth thus redefining the approach to achieving prosperity:
- to be matched by Social progress
- to be shared across all regions of India
- to be environmentally Sustainable and
- to be Solid in the face of external Shocks
- The roadmap forecasts that India’s economy will reach USD 20 trillion by 2047, assuming average annual growth between 7 – 7.5% over the next 25 years.
- The competitiveness framework that underpins the roadmap provides a strategic viewpoint on how to transform the diagnostics on a country’s competitiveness principles into valuable insights.
- It will be the bedrock of India’s economic and social policies in order to sustain long-term economic growth.
- It provides a complete diagnostic assessment of India’s current competitiveness level, the key issues faced, and growth potential.
Major maladies to the Indian Economy
- Low per capita income
- Huge dependence of population on agriculture
- Heavy population pressure
- Existence of chronic unemployment and under-employment
- Slow rate of Capital Formation
- Inequality in wealth distribution
- Poor Quality of Human Capital
- Digital divide
- Under-utilisation of resources
Major highlighted challenges
The competitiveness diagnostics have revealed three particular challenges that India will have to address:
(1) Shared prosperity challenge
- India’s headline GDP growth has been strong and even accelerating.
- But weak social progress, rising inequality, and a lack of convergence across regions suggest that this growth has failed to translate into the expected improvements in quality of life for many Indians.
(2) Jobs challenge
- India has a vast demographic opportunity with a young and growing working-age population.
- But it has increasingly struggled to create jobs for a large part of its labour force, especially women and the less skilled.
(3) Policy implementation challenge
- India’s government has pursued an ambitious agenda of economic reforms, largely focused on the relevant issues and based on mostly sound conceptual principles.
- But the impact on job creation terms of job creation and the growth of firms has fallen short of ambitions.
- India is facing a shifting external environment with rising geopolitical tensions and changing patterns of globalization, climate change and policies to achieve the transition to net zero, digital transformation and other technological changes all embedded in a complex macroeconomic context.
- India’s growing labour force, low debt levels and low household leverage have helped the economy escape major scarring from an exigency like coronavirus.
- The push for Self-Reliance will also propel India’s growth trajectory in the future.
- The undercurrents of change in the geopolitical arena have also put India in an advantageous position.
- The coronavirus pandemic has made most of the developed countries see China as an adversary and the Indo-Pacific region is increasingly becoming a place what Middle East and Europe were at different points in time.
- India now has become pivotal to Western economies in terms of strategic thinking.