India needs to grow at 8 per cent for up to two decades to become a developed nation by 2047, the Economic Survey said on Friday, laying bare the uphill task of meeting the lofty target that the Narendra Modi government has set.
Early this month, the National Statistical Office estimated India’s GDP growth for 2024-25 at 6.4 per cent – the slowest pace of economic growth in four years.
And on January 17, the International Monetary Fund said India’s GDP growth is projected to remain at 6.5 per cent till 2026. "Growth in India slowed more than expected, led by a sharper-than-expected deceleration in industrial activity," the IMF said in its update of the World Economic Outlook, according to which the global economy is holding steady.
In 2023, India's growth rate was 8.2 per cent, which dropped to 6.5 per cent in 2024.
The Economic Survey, that Union finance minister Niramala Sitharaman tabled in Parliament on Friday, pitched for a slew of reforms, including land and labour, to achieve the ambitious target of Viksit Bharat by the year 2047.
It said that to achieve this growth, the investment rate must rise to 35 per cent of GDP, up from the current 31 per cent, and there is a need to develop the manufacturing sector further and invest in emerging technologies such as AI (artificial intelligence), robotics, and biotechnology.
India will also need to create 78.5 lakh new non-farm jobs annually till 2030-32, achieve 100 per cent literacy, up the quality of educational institutions and develop high-quality, future-ready infrastructure at scale and speed, the Economic Survey 2024-25 said.
"...the faster economic growth that India needs is only possible if the Union and state governments continue to implement reforms that allow small and medium enterprises to operate efficiently and compete cost-effectively... The focus of reforms and economic policy must now be on systematic deregulation," it said.
The survey also said there should be minimum regulations as small and medium enterprises have limited managerial and other resources at their disposal.
The list of areas in which systematic reforms are needed includes land, labour, building, utilities and public service delivery.
"Ease of Doing Business (EoDB) 2.0 should be a state government-led initiative focused on fixing the root causes behind the unease of doing business," the survey said.
It said where the Union government sets the primary law, states also have the option to deregulate by amending subordinate regulations. States should consider these options while identifying opportunities for deregulation.
"To realise its economic aspirations of becoming Viksit Bharat by the time of the centenary of Independence, India needs to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two," the survey said.
