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In the decade ahead, India will be a country that will march to its own tune, create its own model of growth and lead the way in creating an innovative, energetic, equitable and sustainable economy. Even the most modest projections estimate that the Indian economy will grow at an average rate of GDP growth of 7% over the next decade.
During this time, growth will be driven by its young working population and its entrepreneurial traditions. A government committed to creating equal opportunities through education and skill development will help create a unique potential for productivity growth.
Next year, India will overtake China to become the most populous nation with 1.4 billion people. A sharp reduction in poverty and rapid income growth has contributed to the creation of a large aspirational consumer class. Consumption, which accounts for 60% of India’s GDP, will be the biggest driver of economic growth.
One of the biggest strengths of the Indian economy is its large and growing national market. A number of important reforms like the goods and services tax (GST), a single nationwide ID, common national protocols for digital payments, roads, highways and airways and the public digital infrastructure of JAM (Jan Dhan-Aadhaar-Mobile) have created a single national market both physically and digitally.
India’s growth path will be determined by how effectively it harnesses its greatest natural asset — its youth. India has a great economic opportunity if it can create an environment that supports education, training and job creation for the millions of young Indians set to enter the labour force.
Over the next two decades, India’s working-age population is set to increase by almost 200 million, to over 1 billion, to become the world’s largest labour force. Its success will depend on whether it can bring women into skilled jobs, adopt modern technology and create conditions where they can work with dignity.
India’s entrepreneurial tradition will provide the capital and the ideas that pull together finance, resources and labour, and create productivity improvements. India has been part of global trade and commerce for centuries. Civilisational confidence and the aspirations of young Indians have created some of the world’s best companies that operate globally. This potential will be optimised in an environment that encourages firms to create long-term organisational capability, invest in technology and create resilient firms and structures. India’s democracy, rule of law and healthy environment of public-private partnership can help create a sustainable and equitable economy and society.
In addition, in 2022, when the world has understood the risks of global warming, India has a huge late-mover advantage. While infrastructure in advanced economies has already been built, in India, the bulk of its infrastructure is yet to be built. Finance and technology for green infrastructure available today will work in India’s favour.
In the post-pandemic world, geopolitics and emerging changes in the world order have encouraged international businesses to relook at India. As companies diversify, resourcing away from a single source to multiple ones, and with governments looking for friends in democratic nations, India’s position and importance in the new world order will only increase.
As India opens up to trade and investment, and forms new alliances and reaffirms old ones, it will have a unique place in the world and global economy. It is now up to us — its people, its companies and its leaders — to harness these opportunities in India’s favour.
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Subscribe to The Economic Times Prime and read the ET ePaper online.