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Economy 02-Feb, 2025

8% GDP growth, job creation, key reforms crucial to achieving Viksit Bharat dream by 2047

By: Shantanu Bhattacharji

8% GDP growth, job creation, key reforms crucial to achieving Viksit Bharat dream by 2047

Photo courtesy: Pixabay

The Economic Survey cautions that domestic gains may be jeopardised by global overcapacity, particularly in industries like steel, which could prompt trade protectionism as New Delhi seeks new demand avenues.

India’s path to becoming a “Viksit Bharat” (developed nation) by 2047 hinges on high growth, as outlined in the Economic Survey 2024-25, released on January 31, with key reforms needed to drive sustained expansion. To achieve 8 per cent annual GDP (gross domestic product) growth, the investment rate must rise to 35 per cent of GDP from 31 per cent, providing the fuel for growth.

Strengthening manufacturing and embracing emerging technologies such as AI, robotics, and biotechnology is essential for future competitiveness. The country faces an urgent need for 78.5 lakh non-farm jobs annually until 2030 to accommodate its growing workforce. Additionally, achieving universal literacy and improving education quality will be crucial to creating a skilled labour force. More significantly, rapid development of scalable, high-quality infrastructure will play a critical role in sustaining this growth momentum.

The NITI Aayog’s forecast, released in July last year, said that India must maintain a growth rate of 7-10 per cent annually for the next 30 years to avoid the middle-income trap and achieve developed nation goal with a per capita income of $18,000 and a $30 trillion economy by 2047. In line with this ambitious goal, the Economic Survey for FY26 expects a growth range of 6.3 per cent to 6.8 per cent, falling short of the 8 per cent growth required for a decade to reach the ‘Viksit Bharat’ goal by 2047. This forecast, however, aligns with the International Monetary Fund’s (IMF) projection, which anticipates India’s GDP growth at constant prices to hover around 6.5 per cent from FY26 to FY30, setting a benchmark for sustained economic progress.

The previous Economic Survey had projected GDP growth in the 6.5-7 per cent range for the current financial year, underscoring the challenges New Delhi faces in sustaining higher growth levels necessary to meet its long-term development targets. It is worth noting here is that these headwinds highlight the need for strategic reforms and investments to achieve the desired economic expansion required for India to realise its aspirations of becoming a ‘Viksit Bharat’ by 2047.

The GDP is projected to grow at 6.4 per cent in FY25, according to the National Statistics Office, signalling a moderate but steady expansion. The Eco Survey highlights several positive domestic indicators, including a rebound in rural demand, which is expected to boost consumption. Investment activity is also set to rise, spurred by higher public capital expenditure (capex) and an improving business sentiment. Manufacturing capacity utilisation continues to stay above the long-term average, while private sector order books are expanding, driven by increased investment intentions.

However, the Survey cautions that these domestic gains could be offset by global overcapacity, particularly in sectors like steel. This may lead to trade protectionism, as India looks for new avenues of demand. The Eco Survey stresses the need for structural reforms and deregulation at the grassroots level to improve India’s global competitiveness, which is seen as crucial to sustaining medium-term growth prospects.

Amid shifting global realities, the Survey highlights India’s path to success lies in tapping into its internal growth engines. At the heart of this strategy is the empowerment of individuals and organisations to pursue legitimate economic activity with greater freedom.

To accelerate this growth, the Survey calls for an intensified focus on deregulation, building on the progress made over the past decade. With systemic reforms now more urgent than ever, India’s ability to sustain rapid economic expansion relies on continued efforts at both the Union and state levels.

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