Three sectors we believe will drive India’s economic growth to $5 trillion

0

Cautious optimism is in order as India celebrates 75 years of independence and the country is poised to join the $5 trillion club. Along the same lines, here are some key areas we think India needs to focus on.

Years ago, when India had a date with fate at the stroke of midnight, it was ranked among the poorest in the world in terms of per capita income. Since then, India’s economy has grown about 55 times to rank fifth, with a 7.75% share of global GDP. (considering purchasing power parity).

Like a The High Representative of the International Monetary Fund (IMF) in India has previously noted that developments in India have a profound effect on other countries in the region and around the world, as much of humanity and the global economy is in play

By all accounts, the world has little cause for concern given the IMF’s recent projection of a “fairly robust” growth of 8.2% for India in 2022.. Obviously, India has resisted a lot and achieved a lot. But what next? How will it achieve its ambition of being a $5 trillion economy in five years?

Maintaining real GDP growth of 8.2% will not be easy given that the basic sectors, including manufacturing and construction, are under pressure. The major investment spurt in infrastructure development announced earlier this year is a welcome step. A shift towards new ways of doing business that exploit global trends (eg working from home, digitalization, green business, inclusion) is needed to drive productivity and demand.

Go forward

As the world recovers from the pandemic and with limited resources at our disposal, it will be important for India to identify its priorities in the near future. Business lines that are foundational in nature, can be scaled across the country, and have massive impact on the ground should be prioritized in our quest for a $5 trillion economy. Looking at lessons from around the world and across India, we have identified three business sectors that satisfy the above characteristics.

First, a well-developed transit Infrastructure. It has a multiplier effect, improving accessibility and mobility, connecting people and communities, facilitating trade, generating greater job opportunities and boosting overall economic productivity. Technological and digital innovations can play a vital role in advancing mass transit systems and helping to realize the smart city agenda.

Second, strengthen MSME. They are a vital pillar of our economy, contributing over 29% of India’s GDP and generating employment and exports. Recent programs like Raising and Accelerating MSME Performance (RAMP) and Capacity building for MSME first-time exporters (CBFTE) are welcome steps, but much remains to be done. Digital transformation and global best practices can help further strengthen the industry, truly propelling India’s growth story.

Third, expands the use of digital financial services. The COVID-19 crisis has shown the important role they can play in providing low cost and safe financial tools to Indians. A World Bank report highlights how access to basic financial services like transaction accounts, credit and savings products has helped poor people in many parts of the world increase their incomes.

We believe that strengthening these three industries will revolutionize the Indian economy, create greater employment opportunities and help India reap the much-talked-about demographic dividend, and further ensure that the benefits of economic growth benefits everyone. In particular, it represents a step towards connecting Indians from the most remote parts of the country, ensuring the spread of economic activity and encouraging an inclusive and balanced economy.

Geopolitical, economic and technological changes have increased risks for Indian policymakers, but have also created new opportunities. The opportunities they present are transformative and could easily accelerate our ambitions far beyond a five trillion dollar economy.



LinkedIn


Disclaimer

The opinions expressed above are those of the author.



END OF ARTICLE



Share.

About Author

Comments are closed.