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The $5 Trillion Economy
The jump to the $5 trillion orbit, from the current $3 trillion, is going to be powered by green energy, production-linked manufacturing, digital drive, Rs 145 lakh crore-plus infrastructure pipeline, and targeted incentives for MSMEs
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It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society — Adam Smith in The Wealth Of Nations
The $5 trillion GDP target emanated from Prime Minister Narendra Modi’s Independence Day speech in 2019. India had already been acknowledged as the fastest growing large economy and the Prime Minister envisioned that with all stakeholders on board, India could grow its GDP to $5 trillion by 2025. That was of course, before a pandemic of global proportions brought economic activity to a halt. With a war raging in east Europe and crude oil prices stoking inflation, the International Monetary Fund at first did not see India’s GDP target materialising before FY 2029.
While that estimate has now been revised and North Block mandarins have reiterated their faith in the $5 trillion economy, BW Businessworld decided to explore the ground realities. The blueprint for this vision is known. What is now required is its focussed, time-bound implementation. India, its states and all its wheels need to move and work in tandem and that too on a ‘mission mode’ to achieve the $5 trillion GDP target.
India must stay on course and do what it can, especially around its policy, regulatory and administrative standpoint to achieve this target. And when it gets to that $5 trillion economy, India will have worldclass infrastructure, not just in its major cities, but also its towns. More airports will be on the international map and railway stations will have world-class facilities, offering clean, modern and safe connectivity to the hinterland. Superior highways will be able to cut travel time between major metropolises. World-class ports, interlinked with dedicated freight corridors, will connect large manufacturing and export hubs.
By then, India will be the chosen destination for foreign funds. Health and education infrastructure will be of superior quality. The per capita income will certainly triple to Rs 4.6 lakh, if not double from the current base of $2,000 (Rs 1.5 lakh). In agriculture, India will be a global hub, after of course, the country’s yield-per-hectare increases significantly. To achieve that larger GDP growth target, the current Indian banking sector will need to double its credit size, implying the need for more banks with heftier balance sheets.
Of course, India will also have to become a manufacturing hub of choice for large multinational companies, to achieve which it will need streamlined and transparent laws around taxation, labour, land and more. Read our cover story and expert views on the $5 trillion economy mission. Of course, we also bring to you all our regular features.