India Shaping the Global Growth Agenda

India is a beacon of hope in an uncertain world where growth is slowing down, and geopolitical complexities abound. It is the fastest-growing large economy, expected to occupy the third spot by 2030. This journey is not the outcome of a stroke of luck but several of these factors:

Size matters: The implementation of GST created a unified domestic market, a fertile ground for businesses to thrive. Steadily increasing GST collections, which hit an all-time high of `1.87 trillion in April and an average of `1.66 trillion a month this fiscal, indicate rising economic activity and greater formalization of the economy. It has also enabled GoI to allocate resources to priority sectors.

Reformative years: India’s commitment to reforms has been transformative. By focusing on measures to enhance the ease of doing business, reduce the cost of doing business and improve the ease of living, GoI saw an opportunity in the adversity of the pandemic. In addition to GST, several other schemes such as IBC, PLI, PM Gati Shakti, National Master Plan, National Logistics Policy and decriminalization of minor offences have added to India’s allure as an investment destination.

India’s approach of eschewing an aggressive stimulus early on during the pandemic, while supporting those at the bottom of the pyramid and focusing on structural reforms, proved right. It has since made the job of managing inflation easier compared to advanced economies that went overboard.

Dig infra dig: The massive investment in physical infrastructure, with a record outlay of `10 trillion in the last Union budget, and digital public infrastructure (DPI) has connected and empowered people. It has also enabled far-flung regions to contribute to and benefit from India’s growth. The JAM (Jan Dhan- Aadhaar-Mobile) trinity laid the base for laser sharp targeting of recipients and minimal leakage through DBTs.

Innovations such as UPI have led to a nearly 50% share of global real-time digital payments, with PwC predicting that it will achieve one billion daily transaction by 2026-27.

Meanwhile, CoWin enabled the world’s largest vaccination drive, with over two billion doses of the Covid-19 vaccine being administered and digital certificates issued.

Demonstrating demographics: This is a huge factor in India’s rise and future growth trajectory. Importantly, the working-age population will continue to outnumber the dependent population for at least another three decades. This young population will not only reinforces India’s competitive advantage in the services and manufacturing sectors, but also unleashes the consumption power of a young population towards discretionary expenditure.

Our economic rise has implications for the world, with IMF stating that India’s contribution to global growth will increase by 200bps to 18% over the next five years.

There is no other country with these factors to lift itself and impact the world’s growth trajectory. Today’s it stands ready to occupy its rightful place among the world’s leading nations and help shape the global agenda.

Subhrakant Panda,

President, FICCI