The President of India spoke of India becoming a “Five Trillion Dollar” economy, last month. It was reiterated by the Prime Minister and was even discussed in the NITI Aayog Governing Council meet. India is, currently, a $2.8 trillion economy; to reach the $5 trillion mark by 2024, the economy would require nominal growth in dollar terms of over 12% a year. To reach $ 5 Trillion, we need to shift our perspective from policy to projects

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Challenges towards realising the $5 trillion economy goal:

• Health aspects:
  • Huge losses of output inherent in the incapacity of the aged increasingly vulnerable to non-communicable diseases (e.g. diabetes, cardiovascular diseases, cancer).
  • Only 54.9 % of infants aged between 0-5 months are exclusively breastfed which is very essential for a child’s optimal growth, development and health at least till 6 months of age.
  • Female mortality rate in India is 139 and 212 for male per thousand respectively.
  • India being a tropical country is always under a constant threat of climate related epidemics such as dengue, malaria etc. Incidence of malaria is 18.8 people per thousand at 2016 levels.
  • India remains to be the highest TB burden country according to WHO, with as many as 211 people per lakh suffering from either newly contacted or relapsed TB.
  • India spends 3.9% of its GDP on health expenditure
  • Relative to those who were not afflicted with NCDs, those who did display higher probabilities of being not employed and just employed, had much lower probabilities of part-time and full-time employment.
• Education:
  • The ASER report by Pratham shows poor arithmetic and reading skills among primary school children.
  • Gross Enrolment Ratio (GER) in pre-primary was 13% of pre-primary school age children showing acute under admission and lack of importance given to early years of schooling in India during 2012-17.
  • Primary school dropout rate in India during 2007-2016 was 9.8%.
  • Survival rate to the last grade of lower secondary general education during 2016-16 was 97%.
  • Total government expenditure on education is a paltry 3.8% of total GDP.
• Social constraints:
  • Brahmins and other “forward” castes showed notably lower probabilities of being not employed, or just employed, but higher probabilities of being employed part-time and full-time, compared to Other Backward Classes (OBCs).
  • Dalits and tribals displayed patterns similar to OBCs’.
  • India has a huge gender disparity leading to poor women labour force participation.
• Ageing population:
  • Indian population is estimated at 1339.2 million in 2017 and is estimated to reach 1513 million by 2030.
  • The aged (60 years and above), with their growing vulnerability to NCDs and disabilities (such as the inability to walk and dress, apart from speech and vision impairment), and caste and education barriers impeding their employment.
  • Old age acts as a barrier to part-time and full-time employment.
  • This can impede the growth and even fail the benefits of demographic dividend.
• Unemployment:
  • Unemployment touched a 45-year high of 6.1% in 2017-18 according to the recently released first periodic labour force survey (PLFS) report.
  • This has resulted in slowing of gross domestic product growth.
  • Deepening crisis in agriculture, the paralysis of the informal sector, sputtering manufacturing growth and slowing exports are all causes for high unemployment rate in India.
• Lack of investments in agriculture:
  • There is neither renewed emphasis on investment-driven growth, nor higher outlays on agriculture, are likely to substantially boost employment

Measures needed:

Agricultural sector:

• Encouraging public and private investments to develop infrastructure like cold chains;
• Special attention for north-eastern, eastern and rain-fed states for augmenting scope of access to institutional credit;
• Rationalisation and targeting of input subsidies towards small and marginal farmers.

Manufacturing Sector:

• A three-pillar strategy to achieve required expansion of output — focus on existing high impact and emerging sectors as well as MSMEs.
• In the defence sector, there is a need to identify key components and systems and encourage global leaders to set up manufacturing base in India by offering limited period incentives.
• Ensure incentives result in technology/process transfer.
• Measures to boost manufacturing in other areas including aeronautical, space, garments, organic/ayurvedic products besides emerging areas such as biotechnology, electric mobility, unmanned aerial vehicles, medical devices, robotics and chemicals.
• For micro, small and medium enterprises, there is a need to improve access to funding by way of development of SME credit risk databases, SME credit rating, and creation of community-based funds

Services sector:

• There is a need for focus on champion services sectors like IT, tourism, medical value travel and legal would be required to achieve the expansion of the services sector output and concerted efforts need to be made to increase exports.
• Improving rail connectivity and seamless connectivity to major attractions.
• E-commerce policy and regulatory framework for logistics segment.
• To promote growth of accounting and financial services, there is a need to pitch for promoting FDI in domestic accounting and auditing sector, transparent regulatory framework, and easing restriction on client base in the accounting and auditing sector

Way forward:

• India needs to carry out the crucial internal reforms that will allow it to be a productive international player and to take on the leadership roles that so many people across the world hope that it will.
• Reorganization of the health system with much greater emphasis on primary medical centres or PMCs
• Any improvement in the life of the majority would require a re-alignment of the growth process so that it is less damaging.
• This would very likely require that we have slower growth but the process can be configured to channel more of it towards poorer groups.
• India could and should aspire to double-digit growth. Without sustained growth at that all levels it has little hope of employing the roughly one million young people who join its workforce every month.
• And unless it takes advantage of its current, favourable demographics it is never likely to emerge as an upper-middle-income economy with a prosperous and thriving middle class.