Doubling India's GDP by 2030: Triumph through tech, talent and tenacity

Though India still has much work to do, with a sustained focus on addressing existing bottlenecks and promoting innovation, research, and development, the country is well positioned to fulfil the target of becoming a $7 trillion economy

Sanjeev Krishan
Updated: May 21, 2024 05:47:54 PM UTC
shutterstock_467204348_SM
Image: Shutterstock

For the third consecutive quarter, India recorded an impressive economic growth rate of over 8 percent, reiterating its position as a resilient powerhouse amidst global headwinds. The country’s evolution is not just reflected in its economic prowess but also in its progress towards becoming an evolved society with improvements in the average life expectancy and per capita income as well. The global community recognises India’s promise as an oasis of growth, a sentiment reinforced by the International Monetary Fund’s prediction that India will contribute to more than 15 percent of the world’s economic expansion in the upcoming decade. This follows a consistent trend of outperformance since liberalisation in 1991—a noteworthy achievement compared to other major economies.

India’s gross domestic product (GDP) has grown at a compounded annual growth rate (CAGR) of 13 percent in nominal rupee terms over the last 32 years, a feat matched by only one other country. Similar to nations across the globe, India’s resilience was severely tested during the COVID-19 pandemic. However, the country emerged with a robust 14 percent nominal growth rate in FY23. Over the last ten years, the Indian economy has moved up three places to be recognised as the 5th largest economy in the world and is poised to become the 3rd largest. While India has witnessed nothing short of a corporate overhaul with a targeted approach to become a winner on most fronts, it also recognises that there is still more to do, and this recognition makes me confident about India’s future potential.

Over the years, the primary focus has been to drive ease of doing business. Implementing the Goods and Services Tax was a landmark move that created uniformity and a simplified system for stakeholders. Likewise, bankruptcy reforms and the Real Estate Regulation Act enhanced transparency and accountability. One aided the clean-up of non-performing assets, facilitating an effective resolution mechanism, and the other promoted stronger governance frameworks and more sustainable practices. There have also been recent efforts to reform dispute resolution mechanisms, and on execution, these would go a long way in making India an even more attractive investment destination.

Also Read: How climate change can impact GDP and jobs

Investors have acknowledged these shifts and poured over $208 billion into the country over the last three years alone, in spite of global volatility and multiple disruptions.

Another major game-changer for India has been its Digital Public Infrastructure (DPI), including Aadhaar (a unique digital ID), the Unified Payment Interface (a digital payments system), and DigiLocker (a document digitisation platform). These have not just promoted the overall digitisation of the economy but expanded access to financial support. Indian entrepreneurs have leveraged this infrastructure to create disruptive platforms across financial services, healthcare and education. India makes almost 4,500 online transfers per second, and sales costs have significantly reduced for many businesses as they have embraced DPI. The next digital revolution is expected through the Open Network for Digital Commerce (a digital marketplace) and e-RUPI (India’s Central Bank Digital Currency).

Public-private partnerships have also proved to be a huge boon for innovators and entrepreneurs, positioning India as one of the leading startup ecosystems in the world, generating over 1.2 million jobs. With government interventions, access to capital, and a focus on skilling, around 50 percent of the country’s startups are from Tier II and III cities, signalling its tremendous grassroots potential, which will be inclusive. India is also home to 55 percent of the operational global capability centres of the world, which have moved beyond back-office functions and are leading research, product development, and innovation. To further strengthen India’s position as a strategic partner, there needs to be a continued focus on reforms, incentivisation, and funding in these areas, to which the government is committed. India has also been heavily focused on balancing its GDP mix by focusing on manufacturing. It has announced production-linked incentives (PLIs) across several sectors to reduce the country’s dependence on imports and create more employment opportunities.

From an environmental standpoint, India, too, is water-stressed and vulnerable to climate change. However, with the 4th largest global renewable energy capacity, India is expected to benefit from the support of non-fossil fuel sources, including interventions around green hydrogen and bioenergy. From a social standpoint, India is in a unique position with a younger population, a large workforce, and a consumption market that will continue growing. However, women’s participation in the workforce continues to be less than 40 percent, creating a need for targeted initiatives to bring more women into the workforce, which could, in turn, help reduce the pressure on the judicial and healthcare systems and be an additional lever for the country’s future growth.

Also Read: How to leverage digital public infrastructure for enhanced government service delivery

Most recently, India signed a trade agreement with the four-nation European Free Trade Association—potentially translating to $100 billion in investment over 15 years in addition to fostering further global collaboration. Additionally, India’s multi-aligned foreign policy is making the country a preferred choice for conglomerates to build resilience in their global supply chains and operations as they look to de-risk, decouple and friend shore. As a result, the country has managed to avoid the entanglement of formal alliances that have historically been defined as a great power competition, proving that it is ready for a more active and differentiated global leadership role. It has also signed 14 FTAs with the hope of increasing its share in global trade over a period of time.

As exciting as it may seem, India’s growth story is not devoid of challenges. However, the potential of the country’s economic prowess is undeniable. Though India still has much work to do, with a sustained focus on addressing existing bottlenecks and promoting innovation, research, and development, the country is well positioned to fulfil the target of becoming a $7 trillion economy. This journey will not only transform the global economic landscape but also redefine India in the world and India for the world.

The writer is chairperson, PwC in India.

The thoughts and opinions shared here are of the author.

Check out our end of season subscription discounts with a Moneycontrol pro subscription absolutely free. Use code EOSO2021. Click here for details.

Post Your Comment
Required
Required, will not be published
All comments are moderated