Reforms transforming India, country needs manufacturing and exports to ignite long-term growth of 8-9%: Kant

New Delhi: Structural reforms, massive digitalization and increased government capital spending are driving India’s economic transformation, but sustaining growth at 8-9% for many decades would require better performance of India’s manufacturing and export sectors, G20 India Sherpa Amitabh Kant told the Mint Summit India @2047 here.

India is currently building about eight airports a year, about three metro lines a year, building about 30 kilometers of roads and 12 km of railways a day, Kant said in his keynote speech about “realizing the great Indian dream” of becoming a developed country.

“So this was a hot phase of infrastructure creation,” Kant said, adding that India had taken responsibility for taking the lead in the energy transition even though it was not big in terms of carbon footprint.

India plans to switch from renewable to green hydrogen and become a major producer of green hydrogen, Kant said. “Our goal is to be the largest producer and largest exporter of green hydrogen by 2047.”

India needs to achieve a GDP of $30 trillion by 2047

However, if the country is to realize the great Indian dream, the vision of being a ‘Viksit Bharat’, it must achieve a GDP of USD 30 trillion by 2047 and increase per capita income from around USD 2,700 to close to USD 18,000, says Kant. . “And that means GDP must increase nine times and per capita income eight times. And that means production has to increase 25 times.”

Few nations in the world have been able to do this. After World War II, Japan did it, and much later Korea and Taiwan did it. Recently, China has managed to achieve this, Kant said.

He explained that the investment rate in India needs to increase very rapidly from about 31% of GDP to 40%, which requires further improvement in the savings rate. Private capital spending has a big role to play in increasing the investment rate, Kant said.

To realize the great Indian dream, the nation cannot merely rely on a few prosperous states such as Tamil Nadu, Gujarat, Karnataka and Maharashtra. “We cannot have some states growing at a very high rate and the rest of India at 2 to 3%… That is why we need champion states in India. You need Bihar, Jharkhand, Chhattisgarh, Haryana and Rajasthan to grow at 10-11%.

Prime Minister Narendra Modi discussed the goal of making India a developed country with the state’s chief ministers at the NITI Aayog Governing Board meeting on July 27. Modi further emphasized the key role of states in driving their own development and said that India becoming a developed nation depends largely on the progress of individual states. He also told prime ministers to create their own vision documents and work towards measurable goals.

The prime minister is also keen to attract more foreign investment and has also asked his federal policy advisory panel to develop an “investment-friendly charter” detailing the policies, programs and processes needed to attract investment, Mint reported on July 27.

Kant said that for India to become an advanced economy, top-class urbanization planning, better educational and health outcomes and greater active participation of people are needed.