India’s real GDP needs to grow at 7.6 per cent per annum over the next 25 years for it to become a developed country by 2047-48, according to an article in RBI’s latest monthly bulletin.
To become a developed country by 2047, India’s per capita GDP needs to rise by 8.8 times from the current level of $ 2,500 to $ 22,000.
Prime Minister Narendra Modi, in his Independence Day address on August 15, 2022, laid down a vision for the next 25 years, to become a developed nation by 2047.
Multi-pronged approach
“India may have to follow a multi-pronged approach with a focus on various aspects of development: strong manufacturing and services sector, structural reforms enabling reallocation of labour from agriculture to other sectors, and investments in human and physical capital,” RBI senior officials Harendra Behera, V Dhanya, Kunal Priyadarshi and Sapna Goel said in the article India @100.
The authors noted that while services sector will continue as the main driver of economic growth, India must also focus on widening its manufacturing base to meet the demand of large domestic market.
Apart from sectoral rearrangements, India’s path to a developed nation would depend crucially on addressing the structural bottlenecks in the economy.
The authors said becoming a developed country is feasible, powered by the growth augmenting impact of policy focus on structural reforms, investments, logistics and digitalisation of the economy, upskilling the labour force to reap the potential of favourable demography, and sectoral policy initiatives covering manufacturing, exports, tourism, education, and health.
The task, however, may not be easy, given the current level of capital stocks, infrastructure and skill sets of the people, they added.
The officials emphasised that India needs to follow a multi-pronged approach for engaging the large pool of labour force productively and harnessing growth opportunities in knowledge-oriented sectors.
Upskilling
“While the unskilled/semi-skilled labour force can be absorbed in MSMEs, new age manufacturing and services sectors will require upskilling and preparing the younger generation to meet the future demand.
“While augmenting capital and empowering human resources could place India on the desired growth trajectory, technology will be a key player in this transformation,” per the article.