“In 2047 India will have a per capita income of the value of today’s dollars of 10,000 US Dollars. The average size of the GDP will be approaching close to 20 trillion US Dollars too. India, therefore, will be a transformed society”, said Dr. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, while virtually addressing the inaugural session at the 57th Annual Conference of the Indian Econometric Society (TIES) held at the University of Hyderabad (UoH).
Dr. Debroy remarked that basic necessities have been provided to the people and more so in the rural areas by the Government. “Economic indicators after the Covid 19 have improved in India. Everyone is now looking to see the rate of growth in 2023-24 and the growth of economy by 2047. The pandemic may have passed but still there is a lot of uncertainty around the world. There is uncertainty around what is happening in China, about the Russia-Ukraine conflict, growth prospects in Europe and the USA. Since India is not insulated, we will also face the volatility, Forex markets and capital markets and exchange rates will face volatility. Inflation rates will also be impacted to some uncertainty”, he added.
Speaking further, Dr. Debroy said, “There are four sources of growth – Consumption, Private Investment, Government Expenditure and Net Exports. The global market is not going to be rosy. We tend to forget that when India did 9% growth, our exports had performed quite well. The net GDP ratio is also very high.”
Dr. Debroy made a reference to Goldman Sachs report which had contemplated the rate of growth for India only at 5.5%. He said, “Today when India does 5.5%, there is despair all around. Just to illustrate how aspirations have changed. However, with 5.5% growth, there has been an exponential rise in the per capita income.”
“The question which remains for all of us as researchers is “What does India need to do to raise the growth rate from 7% to 8%? Lot more research needs to be done at the level of the States. Different States are at different levels of development and hence the sources of growth will also be different. But the fact of the matter is that to raise the growth trajectory, we need to make Land Markets more efficient. Agriculture will also vastly improve when we make land markets more efficient. Similarly, we need to make the labour markets and capital markets also more efficient”, he added.
While concluding his address, Dr. Debroy said, “We need a simplified GST and a simplified system of direct tax. These are the areas on which all of us should think and the research that we collectively produce will educate all of us and help in making policy decisions much informed.”