Economic Targets for Prosperous Bharat by 2030 – Strategies for Sustainable, Inclusive and Employment Centred Economy
Prof. Raj Kumar Mittal
Chaudhary Bansi Lal University, Bhiwani
Bharat, during its journey of 75 years of independence has made rapid strides in many areas such as agriculture, industries, science & technology and health & education. Today we have a well diversified economy and in terms of purchasing power parity, it is third largest in GDP (fifth largest in nominal terms). Our food grains production has gone up from 55 Million tons at the time of independence to 260 Million tons today. Our industrial production is much diversified and our import dependence for many items has declined over the years. Economy today is driven more by growth in services sector, which contribute 57% to Bharat’s GDP and has less dependence on agriculture sector, whose share over the years has declined from 42.77% in 1967 to 16.02% in 2019. In frontier areas of technology like space, nuclear energy, communication, medicinal science, we have made significant progress.
Despite all round progress in different areas, we still fall under the category of developing countries on parameters of socio-economic progress. Our ranking is 144 out of 194 economies in terms of GDP per capita that is much below the desired level. Our per capita income level is $2,191 which compared with countries like USA ($63543), U.K. ($40,284), China ($10,500) is much less. Our overall productivity ranking has slipped from to 145 in 2021 which is much below its potential. IMD has mentioned that the low ranking of India in Competitive Index is due to Poor Infrastructure, insufficient education investment.
These statistics clearly reflect upon the under realised potential of Bharat to utilise its resources – physical, human, financial, technological for improvement in socio-economic status of its citizen. We have vast arable tracts of land with 3.287 million Km2 area under its territory, which through better management and use of technologies can significantly increase the production of food and non-food crops, large coastal belt of 7516.6 km, having capacity to substantially increase marine economy and strategic activities, network of research and educational institutions for skilling and R&D in the economy, base of more than 6 crores of MSMEs units and many large scale industries engaged in industrial and commercial activities, besides the presence of vibrant and dynamic money and capital markets to generate enough financial resources, vibrant democracy and a huge base of 136.64 crores of population having 356 million young Individuals.
What we presently need is to set the right economic vision and agenda before the country, which is shared one, challenging and motivating enough to make Bharat third largest 10 Trillion dollar economy after USA and China by 2030, making it a county with no individual below poverty line, generate enough economic activities and opportunities for all to reap the demographic dividend which Bharat presently enjoys and make the socio-economic transformation process inclusive and environmental friendly. But the problem that persists even after so many years after independence has been the lack of economic vision before the country, the vision which is commonly shared and motivates every one to realise it.
A bird’s eye view of Indian economy
Nehru -Mahalanobis model used to create a society based on socialism through state controls and supremacy to PSUs. In this process undermined the virtues of private initiative and entrepreneurs. In the process we also patronised inefficiencies, poverty, unemployment and underperformance of the economy. In 1990’s circumstances forced us to rethink and liberalise economic policies, making private sector a major partner in economic development and integrate our economy with the rest of the world. This model of globalisation and liberalisation has created serious problems related to inequalities in the distribution of income & wealth, degradation of environment, jobless growth and unemployment, and the problem of malnutrition and poverty in the economy. Over the years, there is an onslaught on our values and family system by MNCs and the over exploitation of resources resulting in livelihood problems for many. These liberalised policies are believed to have resulted in a system termed as crony capitalism. The working of the multi-lateral bodies and agencies such as IMF, World Bank, WTO, WHO etc. have become ineffective in realising the objectives for which they were established.
Bharat though have liberalised its economy significantly and have given lot many concessions and opportunities to foreign companies to either invest or do business, yet our participation in global chain is limited and share in world’s export is just 1.71% of total exports. On account of problems related to ease of doing business, technological obsolescence and weaknesses on quality front, we have not been able to push our exports significantly and become a part of the global supply chain.
There is lot of liquidity in the system, which needs to be used to fund infrastructure projects in a big way so that logistic costs, which presently are about 12% of total costs can be substantially reduced to world average of about 9% that will enhance our competitiveness. The banking sector which was facing the problem of rising NPAs seems to have addressed the issues and appears more stable to be used for channelising savings and investment in the economy. The savings rate which once attained the level of 34.6% percent in 2012 has declined to the level of 30.9% in 2020. The potential savings could be channelised to fund the MSMEs sector and the youth in their social innovation projects such as converting waste to wealth, IT technologies & innovations, health and education projects in a big way.
The MSMEs sector which roughly have more than 6.5 crore units is the backbone of the economy and is the largest source of livelihood, export earnings, and significantly contributes to India’s GDP and tax revenues. Unfortunately, this sector today is not in a healthy condition and suffers from serious problems like technological obsolescence, limited marketing capability, high cost of capital, underdeveloped infrastructure, low accessibility to various facilities, resources and unhealthy competition from e-commerce platforms to mention a few. The GST and issues related to unnecessary government controls needs to be addressed on priority. Through massive technological upgradation and training programmes the sector has to be promoted to embrace technology and management professionalism to deal with today world’s business complexities. As a result of complex legal system and poor contract enforcement mechanisms, business sentiments are low which hurts the investment and entrepreneurial activities. Legal and administrative reforms on a fast track are required.
No boost to the economy can be given without improving the situation of informal sector of the economy. The sector is plagued with so many problems related with low productivity and income levels, unfavourable job conditions and security. Through education and training programmes their income and productivity can be enhanced. The social security measures regulating working conditions, safety measures, health and family insurance, less exploitation, equal opportunities to all are some areas where reforms are required and could bring inclusiveness in the growth process. Environment fragility has increased over the years and has in fact become the hurdle in the growth process. The quality of major components – soil, water and air has deteriorated to the extent that it has become a serious threat to the humanity. It adversely affects the health of the workers and their livelihood.
Policy recommendations and the way ahead
The reforms are needed on priority basis in the following areas:
Strengthening of rural economy: Big investment in rural infrastructure – IT & digitalisation, sanitation, health & education, strengthening allied activities like animal husbandry, dairy, fisheries, poultry farming, horticulture, plantation, harnessing alternate source of energy especially based on bio-gas and solar, agro -based industries based on local resources and talent, cultivation of medicinal plants , crop diversification, organic farming and use of healthy farming practices related to the use of water, seeds, and fertilisers. Rural entrepreneurs are required to bring the concept of Aatmanirbhar Bharat to the ground level, creating cluster based rural markets, financial institutions to mobilise rural savings, easy availability of simple technologies and development of managerial competence are essential for the development of rural entrepreneurship.
Development of Critical Technologies: Technology is the major differentiator between the developing and developed nations. It is a major contributor towards productivity and growth. It has a direct linkage with the employment generation. Major areas where India can focus Industry 4.0- technology, AI, Data Science, Block Chain Technologies, Quantum Computing, Robotics, Digital Currency, Bio-Technologies and technology related to renewable sources of energy that provide individuals with handful of opportunities and creates easy accessibility to various sectors of domestic and world economy. Expenditure of India R&D is meagre that 0.7% which by 2030 needs to be at-least doubled. Through, interaction between universities and industry, research culture can be developed.
Big Push to Infrastructure: the major constraint in India’s growth is the lack of world class infrastructure. There is a need to develop economic and social infrastructure in areas like roads, ports, uninterrupted supply of electricity water for its smooth production and distribution process, warehouses, logistics parks, storage systems, transportation. This sector needs major investment in physical as well as social infrastructure through innovative ways by involving public and private sector and by having access to cheap foreign capital.
Focus on Development of MSMEs and Indian Art and Craft: The MSME sector including traditional art and craft has to be given priority in the development strategies and policies of Bharat. The Government should focus on the traditional arts and crafts sector and frame some policies helping them reach maximum people of Bharat and outside, as the traditional Bhartiya arts and crafts are undoubtedly of higher quality and are beautifully made with insights and emotions.
Promoting Skills, Innovations and Entrepreneurship: We need to focus on skill development in educational institutions as well as should motivate students to shift towards the practical Learning. What is required is development of skills, managerial and risk taking abilities, critical problem solving skills, analytical and soft skills and innovative thinking of the youth. Institutions should provide students with practical learning opportunities to enhance their confidence so as to enable them to take up self-employment activities. Implementation of NEP 2020 can be a driving force for the same.
Prioritised Sectors: the sector which need a to speed-up growth include Pharmaceutical Sector, Yoga and Ayurveda, Health and Wellness, Marine Economy, Defence, MSMEs, Leather and Textile, Handicrafts, Digitalisation of Economy, Travel and Tourism, reforming PSUs to serve the needs of country in a better way possible.
To conclude, we can say that time has come for Bharat to form a view on economic agenda for next 10 years and should set its goal to achieve the targets- maximising employment generation in the economy, increasing people’s per capita income so as to enhance their well-being and banish poverty from the economy. System and Policies should involve and provide opportunities to the youth of the country and to the different sections of the society to make the growth process more equitable and inclusive. At the same time, through behavioural change in people by raising the sensitivity of people towards environment, a better implementation of Government policies can be ensured. All these processes, shall broaden the base of Bharat’s Economic Activities Significantly to reach the target of making it 3rd Largest economy after USA and China at the level of 10 Trillion Dollar. Though the target appears to be little ambitious but collective efforts can help in realising India’s Potential and achieving the above said targets by 2030.