A huge leap forward

Bloomberg's projection, based on IMF database and historic exchange rates, placed India as the fifth-largest economy in the world — a spot long held by India's erstwhile coloniser — the United Kingdom. Even as India ranked 11th a decade ago, the UK was positioned 5th. This huge leap speaks of India's spectacular growth over the past decade. Comparison with the UK might be slightly misplaced as India's population is almost 20 times that of the UK, and its GDP per capita is far lower. Nevertheless, India's growth march is a spectacle in itself, and is worth celebrating. At the time of the study, India's economy in nominal terms stood at USD 854.7 billion while that of the UK was USD 816 billion. Not long after the release of Bloomberg findings, a State Bank of India (SBI) report gave Indians another chance for celebration by stating that the country can become the third largest economy by surpassing Germany and Japan by 2029. It said that even if India registers a growth between 6.7 per cent to 7.7 per cent in the current fiscal, it will be remarkable by world standards. India's growth prospects over the coming decade are also substantiated by an Ernst & Young report which, citing OECD's baseline projections, stated that India would overtake the United States to become the second largest economy in terms of the size of GDP in purchasing power parity (PPP) context by the late 2040s. The report expects India to touch USD 5 trillion by FY 27, USD 10 trillion by FY 34, USD 20 trillion by FY 43 and USD 30 trillion by FY 48. These reports present substantive evidence that India's growth prospects are indeed exceptional. The caveat, however, cannot be missed out that this growth has to be accompanied by adequate employment and socio-economic equality. India's jobless growth and alarmingly increasing inequalities are the areas to be addressed sooner than later. It may be pertinent here to understand the factors that have been spurring growth in India over decades. The turning point, of course, was the 1991 economic reforms that had put India on an altogether different growth trajectory — albeit with its own shortcomings. India's outward looking economic policy post-liberalisation presented surety of at least one thing in the long-term — high growth. It is indeed fructifying now. Also, central to India's growth story has been its young, working-age population. India's rich demographic dividend places it in a unique position globally. While it serves as an opportunity, it also presents a challenge of capitalising on this advantage. Another factor that may have propelled India's growth is the country's growing emphasis on innovation and start-ups — particularly in the digital, artificial intelligence and other domains. Start-ups in unconventional domains have huge affinity for absorbing the young employment seekers. It may be noted that in the coming decades, as India's young population will decline slowly, it is not the number of youths but their absorption in the workforce that will sustain India's growth trajectory. Going forward, to stand true to global expectations (and to its own aspirations), India needs policy modifications and course-corrections to maintain longevity of its growth. In the first place, the country needs to be more sensitive towards its human resources. The Ernst & Young report, cited above, stressed for increasing the combined expenditure on education to 6 per cent of GDP and on health to 3 per cent by the mid-2030s. High malnutrition among Indian kids is a crucial factor that needs to be dealt with urgently. Furthermore, as per International Labour Organisation, India's female Labour Force Participation Rate stood as low as 18.6 per cent in 2020. It is needless to say that in want of adequate female participation, India's growth story will remain incomplete. It is high time that the government reaches the remotest parts of India to augment female education. More concerningly, work culture in India is still not adequately aligned for the needs of women. Significant action needs to be taken in this direction. While working on these basics, the government should also continue with its digital and start-up push. Since independence, India has achieved a great deal, and deserves more.