Bharat: Vision for 2047 (Part 1: Economic Scenario)

The pace of skilling entrepreneurship, accelerating pace of start-ups and unicorns along with the growth of farm sector would further enhance incomes to get rid of poverty, malnutrition and unemployment. — Dr. Jaya Sharma

 

Bharat is endowed with largest youth population, highest area of arable land and largest number of MSMEs in the world. The Country is home to nearly a quarter of the world’s working-age population of 15 to 64 years. By 2030, the working-age population is estimated to grow from 90 crores at present to around 100 crores. As per the estimates of the Confederation of Indian Industries (CII) and several other agencies the country can become a $40 trillion economy by the year 2047, if the entire working-age population is economically engaged in work. “Jobs for all, through proper skilling along with sensitising people towards entrepreneurship” policy of the government can help the country to attain the goal of $40 trillion economy. 

Much before the centenary of India’s Independence in 2047, the nation stands poised to mark a momentous milestone in its illustrious history. The ensuing 25 years’ period termed as the ‘Azadi ka Amrit Kaal’, by the Prime Minister Narendra Modi is of profound significance for India’s future trajectory, as the government seeks to propel the country towards becoming a poverty-free,  and fully developed with technological self dependence. To this end, the Indian government has instituted a comprehensive array of policies, including the identification of key strategic domains in which India can assert global leadership, as well as the creation of a time-bound roadmap for realizing these ambitions. Although the definitive plans outlining India’s aspirations for the centenary celebration are still in the developmental stages, the government has preliminarily outlined a series of broad objectives that will be subjected to further refinement and elaboration.

Commendable Achievements and Encouraging Trends

India’s progress in the past one decade has been very significant, particularly in the economic sector, where India has become the fifth largest economy on the basis of nominal GDP in the world, while leaving behind Russia, Brazil, Italy, France and UK. On the basis of purchasing power parity, India is already the third largest economy. The country has moved ahead from its agrarian economy on the eve of independence and has made considerable strides in multiple sectors, be it service sector, IT sector, renewable energy sector manufacturing sector, or healthcare sector. Services sector, over the time has become a dominant contributor to the country’s GDP. In addition to the service industry, India has demonstrated progress in manufacturing. The government has undertaken several initiatives to promote manufacturing, such as the “Make in India” campaign, which aims to transform India into a global manufacturing hub. As a result, India has become a major producer of goods such as automobiles, pharmaceuticals, and textiles. India has also shown significant growth in the information technology (IT) industry. The IT industry has been one of the key drivers of India’s economic growth in recent years, and the country is now recognized as a global IT hub. Indian IT companies are renowned for their software development, business process outsourcing, and IT consulting services, and have a significant presence in countries such as the United States, the United Kingdom, and Japan. In the renewable energy sector, country has set an ambitious target of achieving 175 GW of renewable energy capacity by 2022, which includes 100 GW of solar power. India has already made significant progress towards this target and is now one of the largest renewable energy producers in the world. Improvements can be seen in the healthcare sector as well. The government has undertaken several initiatives to improve healthcare infrastructure and increase access to healthcare services, particularly in rural areas. India has established a robust economic foundation and is currently positioned to attain developed nation status in the forthcoming quarter century.

Highly Encouraging Estimates 

As per a study conducted by the US Department of Energy’s Lawrence Berkeley National Laboratory titled “Pathways to Aatm-Nirbhar Bharat”, India has the potential to attain energy self-sufficiency by the year 2047, coinciding with its 100th year of Independence. The study further suggests that significant investment of USD 3 trillion is required for India’s energy infrastructure in the forthcoming decades. The study concluded that attaining energy self-reliance will have substantial economic, environmental, and energy-related advantages for India, such as an estimated consumer savings of USD 2.5 trillion through the year 2047. A significant reduction of 90% in the expenditure on fossil fuel imports equivalent to USD 240 billion per annum, an improved global industrial competitiveness for India, and the ability to fulfill its net-zero target ahead of schedule.

On a little lower side of estimates, the Ernst & Young (EY), the leading professional services organisation, has predicted that Indian economy is poised to reach at a GDP size of US$26 trillion (in market exchange terms) by 2047, the 100th year of the country’s Independence. The per capita income is expected to increase to US$ 15000, enough to put the country among the ranks of developed economies.

In line with the similar estimates, the Railway and IT minister of GOI has launched a report entitled, India @100: Realising the Potential of a US $ 26 Trillion Economy on the sidelines of the world economic forum at Davos. This report underscores the growth trajectory of the Indian economy that is projected to be the highest for any large economy over the coming decades. It also cites key enablers that will underpin the country’s development over the next 25 years that will unleash business opportunities across sectors and will significantly enhance India’s global competitiveness. It recommends ensuring macro-economic stability and resilience and continued thrust on reforms, which will be especially relevant in the backdrop of on-going geo-political conflicts, inflationary pressures and slowing global growth.

This aforesaid report launched by Ashwini Vaishnav is in line with Prime Minister Narendra Modi’s vision, that India has commenced its journey into ‘Amrit Kaal’, a uniquely auspicious period, representing India’s opportunity to herald a new world era. There is an unparalleled impetus on developing world-class infrastructure supported by growth and investment-oriented policies and reforms to establish India as a manufacturing and technology hub. Over the next decade, India will not only be the fastest growing economy but will also play an integral role in leading the world into a sustainable future.”

Growth Enablers

In view of the estimates made by the Ernst and Young, under the most preferred scenario, India is likely to cross the critical thresholds of US$5 trillion, US$10 trillion and US$20 trillion in market exchange rate terms in FY2028, FY2036 and FY2045, respectively. EY has identified key growth enablers for the economy, to propel the growth. These growth enablers are -

• World’s Information Technology and Services Hub: According to EY strong services exports of US$254.5b in 2021-22, would give India a strong foothold especially in the IT and BPO services exports. India can seize an opportunity to fill in the talent gap as developed economies are likely to face shortage of skilled talent due to demographic changes. India has the potential to become a services and technology talent hub for the world.
• Digitalisation: Rapid digitalisation would result in improved governance, financial inclusion, and an efficient framework for market outreach. The digital economy has grown by 15.6% over the period 2014 to 2019, 2.4 times faster than the growth of the Indian economy. 
• Accelerated credit growth: An accelerated credit growth and development of the corporate bond market and digital lending, an optimal financial architecture can help address the critical demand and supply gap in credit to individuals and Micro Small and Medium Enterprises (“MSMEs”), reduce cost of capital, and increase the share of private debt to sustain high growth. Some other enablers are as under:
  • Thriving entrepreneurship spurred by private capital
  • Reaping the demographic dividend
  • Making domestic manufacturing competitive
  • Building the infrastructure of the future
  • Transition to sustainable energy

To conclude, inspite of slight varying estimates, as highlighted above, India should embark on a path to achieve a USD 12 trillion economy by 2030. Simultaneously, the country should change the mission from ‘Make In India’ to ‘Made By India’ to attain a USD 25 trillion economy by 2040 and USD 40 trillion economy by 2047.

The Ambitious Export Target of a Trillion Dollars

The union minister of commerce and industry, Piyush Goyal has set an annual target of exports of 1 trillion dollars by 2030. The exports have already been expected to touch USD 750 billion in this Fiscal 2022-23 from USD 650 billion. According to government estimates, India would soon touch the mark of USD 5 trillion and would emerge as the 3rd largest economy in the world by 2027-28. The commerce minister appears to be more optimistic than the aforesaid report presented by the railway minister on the sidelines of Davos. According to him, besides being a developed economy by 2047 the economy can touch USD 32 trillion. He is seen even more optimistic where he has asserted that India could even dream of building a USD 40 trillion economy by 2047. It would be no wonder, if our exports fetch a figure of $12-15 trillion by 2047. 

Rupee on Path to Become an International Currency

India has already embarked on a path of technological self reliance and is emerging as a major arms exporter. The bold initiative of the Modi government to commence international trade in Indian rupee is likely to boost the exchange value of rupee and give further impetus to exports. India can usher in an era of exports-led growth. Eighteen countries have already agreed to trade in rupee terms with India. Soon the number is likely to reach thirty. Indian rupee is edging closer to becoming an international currency with more and more countries working to de-dollarise global trade. Several nations have expressed interest in facilitating international trade in INR and to make the process smooth, India’s central bank RBI has given approval for opening 60 special rupee vostro accounts in 18 countries including Russia and Sri Lanka. India’s Minister of State for Finance Bhagwat Karad informed parliament that as per records, India’s central bank Reserve Bank of India (RBI) had granted approval to “domestic and foreign AD (Authorised Dealer) banks in 60 cases for opening SRVAs of banks from 18 nations” for settling payments in Indian rupees.

Largest Recipient of Private Transfers

India is the largest recipient of income transfer remittances from abroad. In the last fiscal of 2021-22, India has received $89.12 billion from world as remittances from abroad. With fast ageing of population in US, EU, UK and South East Asia, Indians would be the key source of technical manpower worldwide. So remittances from abroad would also grow by 10% per annum. It would also enhance the national income. 

Conclusion  

The pace of skilling entrepreneurship, accelerating pace of start-ups and unicorns along with the growth of farm sector would further enhance incomes to get rid of poverty, malnutrition and unemployment. Much before the centenary of independence, India can become a $20 trillion economy between 2035-37, with full employment and zero poverty, if employment generation through skilling, entrepreneurship and start-up ecosystem picks up and we tap our full agriculture potential. With largest arable land, India can feed two-thirds of global population. Agriculture has the capacity to enhance the fortunes of more than half of our population. The production linked incentive scheme would usher the manufacturing in a new era. In services, India is poised to lead the world.

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