View | Why India is truly poised to become a global economic powerhouse

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A decade back, India was the 10th largest economy in the world. However, today, with a $4.11 trillion GDP, we are aiming to be the 3rd largest by 2030. As someone who has actively witnessed the country’s economy flourish, especially over the last decade, I am inspired by the dynamism of the Indian economy.

Today, as we stand at the precipice of a new era, it is evident that India’s resilient economy is poised to propel the nation even further towards prosperity. At the heart of India’s robust economic stability lie several growth drivers, each running on full steam to power the nation’s upward trajectory. So, what are these growth pillars? In my opinion, the critical areas are infrastructure, digital ecosystem, rising middle-income & progressive reforms. Let’s delve a bit on how these pillars are enabling India leapfrog from ‘Good’ to ‘Great’.

Infrastructure Drive  

India has taken significant strides in modernising infrastructure with major push in building roads, highways, railways, waterways, and air connectivity. Laying a solid foundation for sustained growth, the government launched the ambitious GatiShakti followed by National Logistics Policy enhancing the infrastructure and building efficiencies for logistics.

The pace of road building in India improved to 27 km daily on average, from 24 km per day over the last two years. Recently, the minister of civil aviation stated that the plan is to increase the number of airports from 148 to 200 in next four years.

Global economies must sit up and acknowledge the potential of this growing economy — the strides are apparent as India ranked 38 out of 139 countries, improving its ranking by six places in World Bank’s Logistics Performance. 

Digital highway to prosperity

India has shifted gears by preparing for the new frontier of digital ecosystem. The country has built a world-class digital infrastructure by embracing technology thereby witnessing rapid transformation. The central nervous system was the ‘Digital India Initiative’ which played a pivotal role in breaking barriers and bringing all citizens into the digital mainstream.

One of the key achievements has been UPI which has revolutionised the way India transacts. Another significant development is the Aadhar-based identification and verification system bringing authenticity and ease for individuals to access government services. It has also enabled the government to touch the lives of millions of individuals from the lower economic group through direct transfers to beneficiaries.

This digital infrastructure is what helped the country provide large scale vaccination drive even during the pandemic through its CoWin platform. However, the highlight is that this platform was deployed in other countries such as Indonesia, Philippines, Sri Lanka etc. While several measures have been undertaken to overcome certain challenges such as digital literacy, improvements for a robust cyber security ecosystem and infrastructure development will unleash the full potential of the nation. 

Rising consumption powerhouse

Interestingly, while the world is struggling with inflation led woes, India has found a market within, rising middle income group, and increasing purchasing power are fueling economic growth. According to the findings of the People Research on India’s Consumer Economy (PRICE), the size of India’s middle class will nearly double to 61% to its total population by 2047 from 31% in 2020-21.

The burgeoning middle class in India represents a vast consumer base with evolving aspirations and  demands. This not only stimulates domestic investment but also attracts foreign investments, driving economic expansion and fostering innovation. India is poised to become a major player on the global stage in the coming years, and the rising middle income and increasing purchasing power parity are sure to play a key role in this transformation.

Reforms shaping economic resurgence 

The government has certainly made the country a lucrative investment destination thanks to the progressive reforms undertaken. The particular one that stands out is the Ease of Doing Business, the sheer meteoric rise of 79 ranks from 142 to ranking 63 in 2020 in World Bank’s Doing Business Report speaks volumes of the mammoth undertaking.

The government in 2023 announced the scrapping of 39,000 compliances and 1,500 archaic laws, and in 2017, introduced GST as to ensure standard indirect tax rates and structures which further helped make India a viable growth market for global companies.

These initiatives showcase a commitment towards fostering business-friendly environment and making India a lucrative investment destination. Additionally, initiatives like the Make-in-India campaign, aimed at promoting manufacturing and entrepreneurship, and the Startup India program, which offers incentives and  support to budding entrepreneurs, underscore India’s shift towards harbouring innovation and entrepreneurship. 

India’s economy has shown remarkable strength in the face of global challenges. By focusing on infrastructure, digital infrastructure, and increased purchasing power, we can unlock the full potential of the economy and create a brighter future for all Indians and a beacon of global development.  

—The author, Navaneel Kar, is Managing Director, Philip Morris International  Inc’s India affiliate, IPM India Wholesale Trading Pvt. Ltd (IPM India). The views expressed are personal. 

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow