A road map for India to grow at 10% rate over the next 3 decades
Hindustan Times|November 09, 2024
India needs robust growth to meet the aspirations of our people. Sustained growth rate of 10% can potentially see per-capita incomes increase to eight times of current levels, an incredible feat for a country with 1.4 billion people.
Amitabh Kant
A road map for India to grow at 10% rate over the next 3 decades

We have seen the economic transformation of countries such as Japan, South Korea, and China, where they grew at rates of 10%+ for three decades. Exports and investments drove these high growth rates.

Such growth rates will require strong fiscal health, a thriving manufacturing sector, liveable cities, skilled human capital, and be driven by private investment. Investment rates will need to rise to around 35% of Gross Domestic Product. In turn, investment is financed by savings. Increasing domestic savings will be crucial in financing these additional investments. Improving fiscal health, along with a focus on formal job creation will increase the pool of domestic savings.

Fiscal stability

In FY24, the combined fiscal deficit (Centre + states), stood at 8.6% of GDP, and the combined Debt to GDP ratio stood at 81.6%. Government deficits will come down in the coming years as the economy continues to grow.

Tax to GDP ratios are improving, touching around 18% in the past year. Capital expenditures have also almost doubled in the past 10 years, reaching 3.5% of GDP. Whilst these parameters have improved significantly since the peak impact of the Covid-19 pandemic, further fiscal consolidation is needed. At the same time, the push towards capex must be sustained in the coming years. Annual net government borrowings have expanded from around ₹9 lakh crore in FY20 to about ₹18 lakh crore in FY24.

Sustained higher borrowings by the government can potentially lead to higher debt servicing costs by raising benchmark bond yields. As these yields serve as a benchmark, this translates into a higher borrowing cost for the rest of the economy. This is essentially what is known as crowding out.

This story is from the November 09, 2024 edition of Hindustan Times.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the November 09, 2024 edition of Hindustan Times.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM HINDUSTAN TIMESView All
We intend to do what Magnus did vs Anand: Gukesh's coach
Hindustan Times

We intend to do what Magnus did vs Anand: Gukesh's coach

Carlsen suffered in some games but won them, says Gajewski who was also Anand's second in 2014 WC

time-read
4 mins  |
November 22, 2024
Hindustan Times

Top players compete at India Padel Open

Top players from around the world will compete in the inaugural India Padel Open, a part of the CUPRA FIP Tour, that kicked off at the Bennett University in Greater Noida on Thursday.

time-read
1 min  |
November 22, 2024
EC opposes Usha's fact-finding panels
Hindustan Times

EC opposes Usha's fact-finding panels

Indian Olympic Association (IOA) president PT Usha's appointment of a 'factfinding commission, on complaints regarding the \"functioning and election process\" of three State Olympic Associations (SOA) has been opposed by the IOA executive council.

time-read
1 min  |
November 22, 2024
Hindustan Times

BATTLE OF REDEMPTION

Australia are raring to go after losing the last four Test series against India. The visitors have landed in Perth after a 3-0 loss to NZ at home

time-read
4 mins  |
November 22, 2024
Rohit Sharma set to join team on Nov 24
Hindustan Times

Rohit Sharma set to join team on Nov 24

India skipper Rohit Sharma who missed the first Test due to the birth of his child is all set to join the team in Perth on Nov 24. The development was confirmed by the team management.

time-read
1 min  |
November 22, 2024
Hindustan Times

Bumrah hopes to chart his own Dath as captain

There is a vast difference between how the world views J asprit Bumrah and the way he sees himself.

time-read
3 mins  |
November 22, 2024
Have to be ready to take a few blows: Pujara
Hindustan Times

Have to be ready to take a few blows: Pujara

Marnus Labuschagne wants to \"pull off a Pujara\".

time-read
3 mins  |
November 22, 2024
Amid rising pollution, EV sales fall off a cliff in Delhi
Hindustan Times

Amid rising pollution, EV sales fall off a cliff in Delhi

No incentive, won't buy. That appears to be the message coming through from dismayed consumers in Delhi after the state government failed to renew road tax and registration benefits on electric cars and two wheelers this September.

time-read
2 mins  |
November 22, 2024
India, UK can look at tech collaboration in Al: Goyal
Hindustan Times

India, UK can look at tech collaboration in Al: Goyal

India and the UK can have a technological collaboration in areas such as artificial intelligence learnings, telemedicine, climate modelling, precision farming and organic chemicals, commerce minister Piyush Goyal on Thursday said.

time-read
2 mins  |
November 22, 2024
Hindustan Times

KENYA DROPS AIRPORT DEAL WITH ADANI AFTER US INDICTMENTS

Kenyan President William Ruto said on Thursday he had ordered the cancellation of a procurement process that had been expected to award control of the country's main airport to India's Adani Group after its founder was indicted in the United States.

time-read
1 min  |
November 22, 2024