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Niti Aayog cites three challenges before India to become 3rd largest economy by 2047

Petrochemical industry | 14 Jan 2022 15:33 IST | Polymerupdate.com


With India aiming to become one of the fastest-growing economies with 9.2 percent of gross domestic product (GDP) growth for the financial year 2021-22, Niti Aayog vice-chairman Rajiv Kumar cited three major challenges before the country in its quest to become the fourth-largest economy by 2030 and third-biggest by 2047.

India was the seventh-largest economy in the world in 2017. But the Indian economy grew to attain the sixth position in 2021 despite trade disruptions on account of the coronavirus (Covid) pandemic-induced lockdowns. With a phenomenal rebound and continuous foreign direct investment (FDI) inflows, the Indian economy recently surpassed the $3 trillion psychological barrier mark.

OPULENT VIEWS

2021: Top 10 economies in the world

Countries

Nominal GDP (US$ trillion)

Annual growth (%)

United States

20.89

(-)3.6

China

14.72

2.3

Japan

5.06

(-)4.6

Germany

3.85

(-)4.6

United Kingdom

2.76

(-)9.7

India

2.66

(-)7.3

France

2.63

(-)7.9

Italy

1.89

(-)8.9

Canada

1.64

(-)5.3

South Korea

1.64

(-)0.9

Source: Industry


India’s GDP growth has been among the highest in the world in the last decade. Constant urbanization and improvement in technology have fuelled the rapid rise in the economy. Now, with the growth measures continuing, the government and economists have aimed to sail past Germany to become the fourth-largest economy by 2030 only after the United States, China, and Japan being the first, the second, and the third biggest economies in the world respectively. Therafter, India will work to pip Japan to become the third-largest economy by 2047.

Speaking at its 186th foundation day webinar organized by Bombay Chamber of Commerce and Industry on Thursday, Kumar said, “The first and the biggest challenge before India is to have consistent, rapid and double-digit growth in the country’s economy for the next two-three decades to take care of our demographic dividend. It is not simple but also not impossible.”

The second challenge, Kumar explained was a sustainable reduction in carbon emissions without compromising economic growth. At the United Nations Cooperation of Partnership 26 (COP26) meeting concluded in November 2021, India voluntarily committed to the world to achieve a ‘net zero’ discharge, popularly known as carbon neutral, by 2070. “In India, around 400 million people are waiting to be urbanized. Hence, economic growth is inevitable. But the growth should not be at the cost of the environment,” he added.

The Niti Aayog vice-chairman cited the third challenge as the affordability of a ‘K’ shaped economic recovery. In the last few years, India has achieved phenomenal growth in its economy. Despite the coronavirus (Covid) pandemic hitting the economy on account of periodic lockdowns, the Indian economy has recovered to pre-pandemic growth levels after a 7.3 percent contraction in the financial year 2020-21.

The First Advance Estimate released by the Ministry of Statistics and Planning Implementation (MOSPI) forecasts India’s real GDP to witness a growth of 9.2 percent this year. The high reading of India’s GDP growth, however, can be attributed to the low base of last year. The World Bank has projected India’s annual GDP growth at 8.3 percent and Asian Development Bank (ADB) at 9.7 percent for the financial year 2021-22.

“We have to complete our economic transition in a manner that shouldn’t cost our green initiatives. It is a big challenge again. Often a trade-off was seen in the past between economic growth and the environment. We cannot afford to have such a trade-off. We have to find ways and means to make it happen together,” said Kumar.

Explaining ‘K’ shaped economic recovery, Kumar said, “Economic growth in India has recorded inequitable as different sections of people have been growing at a different pace. For India’s economic growth to sustain, therefore, there is a need to have equitable economic growth as inequality could lead to tensions in society. Hence, we will need to find ways to make growth equitable.”

Equitable growth should be the one that can empower people and give them the right opportunity to excel. Niti Aayog forecasts India’s economic growth at 9.2 percent in FY ‘22, 8.7 percent in FY ‘23, and 7.5 percent thereafter, thus making India one of the fastest-growing economies in the world.

Kumar emphasized the need for new thinking and breakthrough thinking to achieve sustainable economic growth.

Speaking on the occasion, Ajay Piramal, Chairman, Piramal Group, called for investments in startups and technology and their direct linkages with large corporates for India to become a $5 trillion economy by 2024-25.

“For a corporate, earning profit is like the oxygen without which no CSR (corporate social responsibility) is possible. Additionally, there have been too many regulators in our country which need to be curtailed for smooth functioning of business,” Piramal said.

Experts called for private sector participation in innovatios, with the government to remain a partner.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
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