India’s India $35 Trillion Economy target is being supported by strong economic performance, which has exhibited promising signs of such potential, with healthy 8.4% growth rate in final and concluding quarter of 2023. With this, the country was able to see quickest growth pace seen in previous one-and-a-half years, resulting to overall fiscal estimate of ~7.6%.
Amitabh Kant, the former CEO of NITI Aayog, recently mentioned about the plans of India $35 Trillion Economy and has outlined promising growth trajectory which the country is required to follow to be a recognised global economic powerhouse.
His vision goes over and above the economic size, since he supports for strong uplift in per capita income of Indians to more than USD 18,000 from present USD 3,000. This also aligns with broader goal of comprehensive national prosperity.
What is happening?
As of now, India has secured the position of 5th-largest economy having GDP of $4.11 trillion. The country comes after the US, China, Germany, and Japan. Talking about the growth momentum, India’s GDP saw a growth of 7.2% in FY23, and experts believe that it should increase to 7.3% for the current fiscal year.
As per the recent data from IMF, the US has the GDP of $29.57 trillion, with China, Germany and Japan clocking $18.56 trillion, $4.7 trillion and $4.29 trillion, respectively.
India $35 Trillion Economy- How will the country achieve this ambitious target?
India is expected to be categorised as 3rd largest economy by the year 2027 and, for this to make happen, it should grow at rapid rates to be a USD 35 trillion economy by the year 2047. To be precise, India should see growth at 9%-10% year after year over upcoming 3 decades.
Apart from this, Kant believes that since Japan, UK as well as Germany are all in recession phase, it should achieve these growth rates quicker and much faster. Unlike West, in which all innovation was from Google, Facebook, Amazon, Meta and Apple, the country exhibited power of digital public infrastructure.
Indian targets to be a cheapest producer, cheapest exporter of green hydrogen and the liquid form ammonia and has plans to be biggest manufacturer of electrolyzer.
PM Shri Narendra Modi’s strong and ambitious vision to address issues related to welfare of poor along with strong governance over previous decade supported the country in transforming from 11th largest to 5th largest economy globally.
India will be requiring a lot of disruptions along with constant innovation to be $35 trillion economy. The country created digital identity of 1.4 billion people, proving that it has leapfrogged technologically.
India’s government has liberalised policy which helps start-ups, space and in several areas the young entrepreneurs. Therefore, country’s government has maintained its focus on areas such as artificial intelligence, logistics, health and education. Collectively, these sectors should aid the country achieve its target of $35 trillion economy.
What initiatives have been taken in these industries?
To support and ramp up innovation, the Union Cabinet approved INR 10,371.92 crores investment for national level India AI mission. This investment is focused on 2 core areas i.e., “Making AI in India” and “Making AI Work for India.”
Under this program, the government has plans to help build high-end scalable AI computing ecosystem, and take control of development and deployment large multimodal models. The focus is also on promoting AI applications in key sectors and so on.
Earlier in 2023, Indian saw a report by expert panel, that comprised of representatives from government and industry, which advised that Indian government develop computing infrastructure of ~24,500 graphics processing units (GPU) in 17 centres. This should help achieve innovation in emerging tech area in India by startups and academia.
Coming to the logistics sector, Indian logistic industry should grow steadily and be compounded at 10%-12% supported by global manufacturing shift because of government initiatives such as “Make in India,” increased e-commerce penetration, implementation of GST/E-way bill, National Integrated Logistic Policy, favourable New Emission norms, etc.
To expand logistics sector in India, Indian government focuses on implementing schemes like National Highway Development Programme and Bharatmala Pariyojana. Under these, an additional 66,000 kms of economic corridors, and expressways are expected to be constructed. Indian government earmarked INR 7.5 lakh crore capex in FY23 Union Budget related to infrastructure development.
Modi Government’s Primary focus on Healthcare sector
PM Modi-led Indian government undertook several impactful initiatives with primary focus on alleviating out-of-pocket expenditure (OOPE) currently present in healthcare sector. Indian government actively promoted the utilisation of generic drugs so that healthcare can be made affordable. Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), comprising 1965 drugs and 293 surgical equipment, are being sold at retail shops at ~50% – ~90% cheaper in comparison to branded medicines.
Overall, India’s healthcare market is expected to touch USD 650+ billion by 2025 end. Biggest advancement are being made in sub-sectors including hospitals and services, pharmaceuticals and medical technology.
This growth is expected to be supported by strong and healthy developments in preventative care and wearable technologies, transformative impact of IoT, ML, and artificial intelligence in healthcare, rise in Electronic Health Records (EHR) and increased prominence of geriatric healthcare in the form of key specialty, etc.
Mergers and acquisitions continue to make a strong comeback in the country’s healthcare sector, with more than 150 transactions occurring in 2022. As a result of this resurgence, overall industry is expected to see formation of larger entities which can lead to more efficient operations and services. Therefore, healthcare sector should be able benefit from economies of scale and optimization in use of resources.
Conclusion
All the above facts and figures emphasize that target of India $35 Trillion Economy is achievable. Recently, Morgan Stanley increased its gross domestic product (GDP) growth forecast for FY25 to 6.8%, up from its earlier forecast of 6.5%.
Growth momentum should be widespread, with converging gaps in rural-urban consumption and private-public capital expenditure over FY25. Entering in burgeoning climate for investment and trade opportunities, India focuses on use of technology and improved governance, while remain focused on achieving decarbonization goals for sustainability.