Bharat was formerly the richest nation on earth. It is a nation that worships Laxmi and Kuber as deities. But as a result of constant foreign invasions, the richest country ended up being one the poorest. According to a well-known OECD study led by Prof. Angus Maddison, Bharat was contributing significantly to global wealth creation by generating almost 33 per cent of the world’s output.
The vision for 2047 is that Bharat will emerge as a global economic powerhouse with a GDP surpassing $10 trillion, solidifying its position among the top three economies worldwide. Sustained growth across emerging sectors such as digital services, artificial intelligence, sustainable agriculture, Health care , Space technology /infrastructure, Energy, Novel Transportation systems etc. needs to be ensured. The challenge is not only to boost R&D and manufacturing in these sectors but also to decide on optimum mix of Rural- Urban economic systems,to stop business immigration and attract more investments in Bharat. It can become a global leader in directing the policy towards mitigating climate change based on its cultural and economic thoughts of sustainable agriculture, peaceful coexistence of all elements and beings of the nature.
India, the world’s largest democracy, is on a trajectory to become the largest economy in line with Vision 2047. The country retained the title of the world’s fastest-growing major economy, with its GDP expanding by a faster-than-expected rate of 7.6 per cent in the July-September quarter of 2023-24, thanks to the booster shots from government spending and manufacturing. Our GDP growth beat China’s 4.9 per cent rise in July-September quarter, a time when the Western economies were getting crushed under the high interest rates and energy prices. All this has reaffirmed optimistic assessments of the country’s medium-term growth trajectory. In the medium term, the IMF has projected an annual growth of 6.3 per cent up to 2028-29, during which the country’s per capita GDP is expected to rise from $2,612 to $3,985. in the long run, India would be the fastest- growing major economy in the world due to its comparative advantages in terms of democracy, demography, market, mindset, strong macroeconomic fundamentals, and the roaring aspirations. All this would make the 21st century – India’s century.
According to the esteemed, and sadly deceased, economic historian Angus Maddison, India’s economy was the largest in the world for an astounding 1.5 millennia. But by 1820, China had replaced India, and this ranking did not change until 1870, when the combined effects of European Colonialism and the Industrial Revolution in the West became more apparent and made Britain the leading economic power globally. By 1900, the United States had surpassed Britain.
Is the global economy about to revert to its previous state?
There are many drivers working in India’s favor. To begin with, the GDP per capita of the nation is less than 20 per cent of China’s and five per cent of the US’. India has an enormous opportunity to close this enormous productivity disparity per person. By utilising the latest emerging and critical technologies, it can achieve significant productivity gains as it amasses capital and trains its labour force. India also enjoys the twin advantages of a young and a large population. Keeping the population size aside momentarily, a young population offers three advantages. First, it potentially translates into a relatively larger workforce and, consequently, higher output per capita. Second, given that the young tend to save for old age while the old spend more than they save, a younger population also translates into higher savings and therefore higher investment. The higher investment directly adds to output and indirectly facilitates the adoption of superior technology. And third, a younger population brings greater energy and vibrancy to a nation, leading to more innovation.
For India, the key to realising the potential of growing population is boosting participation within its labour force, as well as providing training and skills for its immense pool of talent. Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies providing the best ratios between its working-age population and its number of children and elderly. This is the window for India to get it right in terms of setting up manufacturing capacity, grow services, and infrastructure.
But, the country needs to do more to increase labour force participation, especially among women, if it is to fully benefit from its youth. As of now, less than 25 per cent women aged 15 and above are employed – in China and the US, this figure is 60 per cent. A key component of that effort will be improved education and skills at all levels.
Size is also advantageous when establishing supply chains. More people mean more opportunities for cost savings and agglomeration. These days, international corporations are adopting the so-called “China+1” approach – this means they are searching for a second, less hazardous, and more affordable place for their investments, more so as the dangers associated with doing business and investing in China are on the rise. India is in a unique position to become that “+1” nation since, among prospective rivals, it represents the largest single market. Public and private investment will be a major force behind India’s economic expansion. The Indian Government has been making a concerted effort to establish favorable conditions for businesses and improvements in the Ease of Doing Business index is a testament to this fact. India’s burgeoning technology sector and its capacity for innovation are key drivers of its economic growth. The nation is home to a flourishing startup ecosystem with over 125 unicorns that generate innovative solutions for a range of sectors. The economy can also grow by utilising digitalisation and adopting cutting-edge technology like blockchain and artificial intelligence to boost productivity.
