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6 Reasons Why India Will Be The World's Fifth Largest Economy By 2030

                 


According to the International Monetary Fund (IMF) (2020), more than 55% of world GDP will be made up of emerging economies or developing countries, of which the United States and China are expected to account for over 45%. Some experts believe that this would be the biggest growth since the last century after the Second World War. In 2019, it was estimated that India’s GDP would grow at an annual rate of 5.5%. India is a country whose economy has been on the rapid recovery path since the financial crisis that hit in 2008-09. This year again we are witnessing the growth with an 8% increase in Indian Gross Domestic Products (GDP). But it is predicted that there will be an even greater 8% growth in India's GDP by 2030.
It is a crucial milestone as the government expects huge economic transformation, and this is due to the fact that India is one of the leading players in the global markets. A large part of this transformation is anticipated to occur between now and the second decade of the 21st century. And according to these projections by analysts at NBS Group Limited, the real GDP projections estimate the total size of India as more than US$10 trillion by 2030 and the GDP per capita by the end of 2029. As per these projections, India will overtake the United States as the fifth largest economy in the world within just 10 years. Here is why India should become the third largest economy by 2030.

1.) Rapid Industrialization And Economic Integration

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Due to its growing population and increasing wealth, the GDP of the nation will increase due to increased growth in national income. To start with, over 90% of the population will be employed within the age group of 25 years plus. Many companies and sectors have already taken steps towards providing jobs for millions of unemployed youth across the nation. With several companies seeking partnerships with various government and private sectors, the employment opportunities will also reach millions in the country.

2.) Enhanced National Infrastructure Development

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India is the seventh largest infrastructure builder and third largest exporter of steel products. Over 50,000 kilometers of highways, over 11,400 bridges, 22,600 tunnels, 29,700 km railway lines and 3,000 airports and ports are all being developed. Now, most of these projects are under public-private partnership (PPP) models of development. The government is planning to spend around Rs.2 lakh crore to build 100 new highways. Another key initiative includes construction of 16 major roads, including 4 ones dedicated to expressways. All these plans will take place as soon as funds to implement them are released. It has already commenced work on another road project, named Pothigai. So far around 70 per cent of works related to expansion of existing highways, and additional 150 hectares of land are either acquired or acquired. Also, the government is building new tunnels, bridges and other infrastructure, especially rural roads, at an extremely fast pace. These measures will reduce the cost of domestic electricity and provide much needed relief to households with no access to electricity.

3.) Increased Social Security Benefits

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India offers many social welfare schemes, which include retirement pension, old age fund, health insurance policies and others. For instance, about 60% of the population live below poverty line, but a larger number of people are living beyond that level. But the government is working hard to make sure that everyone gets the right basic needs like food, shelter and safety.

4.) Improved Manufacturing Ecosystem


Since the industrial revolution, India has been playing a pivotal role in manufacturing technology. Almost 45% of India's exports are manufactured goods, of which 23% are automobiles, 17% are pharmaceuticals and 1% are electronic appliances and components. About 14% are consumer durables, mainly electronic & electrical devices. These products contribute hugely to India's GDP. More than 30 manufacturing units are set to assemble machinery in India every minute.

5) New Product Launches

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Being a single-stop shop, India is launching thousands of new products and services every year. And these initiatives are aimed at addressing the rising need for affordable and accessible products. For example, online shopping had witnessed widespread adoption across the nation in recent times. The Government is pushing forward digital platforms like Amazon as well as Flipkart, so that customers can browse through a wide range of stores using their smartphone at subsidized rates on both Internet-based and offline modes. Companies such as Ola, Bajaj Auto and Reliance Jio are adopting innovative technological solutions to make mobility easier and more convenient as they increase the penetration of affordable electric cars in mass market segments across the nation. There is no doubt that India will play a vital role in reviving the auto industry and in facilitating India's green transition. They could pave the way in making personal vehicles fully eco-friendly and capable of doing away with petrol cars. 

6.) Expanded Trade Of Agricultural Produce

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Agriculture forms another important contributor to the national coffers. The agricultural sector contributes approximately 28% to the national GDP. However, the availability of arable land has led to the gradual decline in agricultural production. Not only that, the irrigation requirement has gone down drastically due to climate change. Food grains, paddy, etc., have declined significantly. One wonders if the impact will not end when temperatures go down. But the pandemic has provided the impetus to start rethinking the whole agricultural sector and develop technologies which could help farmers adapt to environmental changes. With the arrival of Covid-19 vaccines and other similar tools, agriculture will not only resume its former glory, but could become better.

7.) Technological Advancement And Innovation

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Technology plays an integral part in modern life. Despite the negative feedback given to us, science continues to evolve and create remarkable inventions and tools. Science fiction movies are always showing how advanced humans could be, and it has often brought hope for those who didn't think that humanity might advance to where we are today. Similarly, advances in medical science have helped save lives and allowed people to lead normal lives after recovering from illnesses. With the passage of time, India is likely to witness more advancements and innovations as it introduces newer industries and products. Most importantly, this means that India can remain a force to reckon with in global markets.

8.) Global Business Expansion

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While maintaining trade links is essential and beneficial for business, India must also address issues of import restrictions and barriers to entry in certain parts of the world. Such factors are preventing foreign businesses from investing here or establishing their presence here, and thereby benefiting India's economy. Hence, India is looking at expanding its investments overseas. Moreover, the government is prioritizing infrastructural developments and allowing liberal trade, which will boost India's economy. Thus, the first three quarters of 2020 saw positive growth in India's gross international trade and the current month also has high hopes for improved performance in the near future. India will continue to rely heavily on free trade agreements and the potential benefits these agreements will bring for the two nations. So the question arises – At what stage will India reach the status of full self-sufficiency? The answer to this lies in further diversification. If India continues to focus on export sectors, then there will be little scope left for investment activities, except for the few sectors such as FDI during lockdown and some private capex during the peak season. But if India is focused on consumption, it will still remain a very attractive destination for investors. Therefore, the importance of attracting Foreign Direct Investment (FDI) remains of utmost importance for any nation.

9.) Resilience against Volatility

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When we talk of resilient economies, there are lots of different parameters which one needs to consider. And while resilience against geopolitical volatility and shocks is considered essential, one cannot forget the aspect of resilience in relation to human factors. India's political stability, its strong macroeconomic indicators, its robust legal environment, ease of doing business and low unemployment levels are a big advantage for firms and businesses.

10.) Tax Evasion

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India is known to be among the least taxing countries globally. With an overall figure of nearly Rs.1.4 trillion in 2011, India currently ranks No.13 out of 130 countries and ranks 15th out of 119 economies. Having this attribute gives India an enormous competitive advantage because it lowers the costs of doing business for those companies which wish to set up operations in the nation. We should also acknowledge that the tax evasion benefits business in multiple ways. Firstly, it reduces taxes paid by business stakeholders. Secondly, it attracts foreign direct investment (FDI) and job creation. Thirdly, it supports the growth of exports through reduction of tariffs. Finally, it creates additional jobs and boosts the local economy.

11.) Accessibility

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Apart from promoting inclusive growth and creating jobs, one can also expect India's prosperity to impact the lives of citizens of the country to a great extent. In many cases, they too may have benefited from the policies enacted by the governments. Although, in case of the poor-and-neglected groups, there is little to boast about. People who do not have smartphones or access to Internet may still find themselves in a lurch, without having access to resources and support systems they need to face day-to-day life. Along with this, they may struggle to get access to healthcare services, education and employment in their area. This shows how much effort is going into improving the quality of life. The good news is that in spite of this, the authorities is willing to help them get back on track.

12.) Availability Of Credit Facility

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Banks and NBFCs are extending banking facilities to eligible borrowers and small businesses. Additionally, NBFCs are also funding credit to entrepreneurs and microenterprises, along with enabling small businesses to borrow on a commercial basis. On an entrepreneurial note, banks have done a lot to help smaller

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