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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Measures needed: The Government and the Private sector must work together to bring about the following measures in different sectors:

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.
• Reform in land leasing laws to promote land consolidation and contract farming.
• Accelerating the pace of public investment in agriculture and ensure greater efficiency in capital use.

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.
• Where applicable, leverage Government purchases (Offset Policy), particularly for technology transfer; and ensure high-quality anchor investors capable of spurring growth of associated suppliers (including MSMEs) and offer limited period incentives to anchors, if required.
• To boost electronics manufacturing, the government should consider offering additional fiscal incentives such as a limited-period tax holiday to players investing more than an identified threshold of investment.
• Similarly for the auto and auto-components sector, encouragement of global leaders for the identified components to set up manufacturing bases, and incentivising players willing to invest more than a threshold in identified areas.
• 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.
• Facilitating visa regime for medical travel.
• Allowing expatriate professional to perform surgeries in identified hospitals
• 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.
• To push audio visual services, measures like exploring introduction of insurance in the film industry, promoting private investments in film schools, exploring franchise business models to exploit film franchise, and promoting gaming industry value chains.
• The scope for expansion into advisory, arbitration and mediation services is large and unexplored.
• A clear roadmap for domestic reforms in the sector, liberalisation and promotion of arbitration and mediation services must be developed
• For the education sector, allowing foreign universities to set up campuses in India, easy visa regime for students and education service providers, removing regulatory bottlenecks, providing recognition of online degrees and setting up appropriate evaluation techniques for online courses

Other measures:

• Select sectoral initiatives can be converted into 100 projects.
• Each to be led by a competent leader with proven skills.
• They must report to the PM.
• The regular bureaucracy would facilitate the job of the project leader, who will be free to choose her team.
• States need to recognise their core competence and aim to increase their economy by 2-2.5 times, which is roughly the size of the current deficit.

The long term impact of unsustainable and non-inclusive growth on Indian society:

• An economy, whatever its size, cannot be meaningfully evaluated independently of the extent of presence in it of natural capital.
• Till now, by referring to the imperative for growth, to eradicate poverty, any effort to conserve nature has not just been ignored but treated with derision, by both right and left.
• Two-thirds of the world’s most polluted cities are in India, when we accept less than a fifth of its population.
• Air pollution shortens lives and lowers productivity, reducing the capacity to earn a living when alive.
• The poor are the most affected as they cannot afford to live in gated communities that somehow manage to commandeer scarce natural resources. Some part of environmental depletion in India is due to the pursuit of unbridled growth.
• Gender inequality manifested as women having less opportunity in life is not going to go away with a re-distribution of income along class lines or across social groupings.

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.
• 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.