Page 6 - Artha

Focus Story
Agenda for
Sustaining India’s
High Growth
Trajectory
First 90 Days of New
Government to Set the
Agenda for Accelerating
Growth
T he Indian economy has First quarter of
exhibited remarkable
strength and resilience amidst
a challenging global
impressive growth rate of 8.2 government
environment. With an
per cent in 2023-24, India has
emerged as the fastest should set the
growing major economy in
the world for three tone for
consecutive years. This
achievement is underpinned actioning high
by robust macroeconomic
fundamentals and solid policy
reforms that have fortified the
economy and weathered it development
from global shocks. As the
new government takes the driven agenda
reins, it inherits an economy
at a high tipping point which
is poised for further growth
and development. The task government will be crucial in
ahead is to maintain this setting the tone for actioning
momentum and steer the a high growth and
country towards becoming a development driven agenda.
developed economy by 2047.
06 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024
formulation of an economic Apart from investments, employment opportunities. As India builds its advancements by actively intensity of extreme The government should
driving job creation and
Further, the initiatives to
economic growth.
policy framework to set the
adopting and integrating
announce a Green
weather events due to
boosting consumption,
enhance women’s
scope for reforms which will
which has the largest share
Transition Fund, leveraging
new age technologies.
climate change, addressing
participation in workforce,
in GDP, is also a
catapult the economy to
Offering grants to AI/deep
water security has become
funds earmarked for green
manufacturing capabilities,
sustained economic growth. sine-qua-non for sustaining such as setting up of it can tap into international 4. Research, innovation tech startups at the an urgent priority. The initiatives, CSR funds, and
the domestic high growth
women hostels, creche
Effective implementation of
private sector and
government should set up
product development stage
markets through increased
these reforms hinge on the
trajectory. Enhancing
facilities, women specific
philanthropy contributions.
a National Mission on
and introducing
exports. With global trade
collaboration between Centre
skilling programs and
incomes in the hands of
A portion of the lending
challenge/hackathons for AI
Water Security that
restructuring, India can
individuals, by offering a
and the states, hence,
promoting market access
and technology
institutional platforms should marginal relief in income for women-led self-help benefit by building reliable adoption are critical to startups at the monitors water resources support should be
earmarked for MSMEs.
commercialization stage
through a public database
and resilient supply chains
groups, will drive inclusivity
tax at the lower end of the
be established to build
remain competitive on
and lays out strategic goals
will promote technological
Finally, a National
through enhanced
state-level consensus on
in the employment
slab spectrum, the recent
the global stage:
advancement. The
for sustainable water
Commission on Adaptation
manufacturing and exports.
announcement in the
landscape.
reforms in areas such as land,
Research and innovation
management. Promoting
should be set up to
government should ensure
Establishing a Global Trade
labour, power (including Union Budget on the In addition, a slew of Promotion Organization are crucial to stay responsible use of Artificial climate-smart agriculture address India's vulnerability
income tax changes in the
renewable energy),
competitive in a rapidly
will support domestic
measures announced for
and other water-efficient
Intelligence (AI) by
to climate change. This
new tax regime is hence
agriculture, education, health,
evolving technological
boosting MSMEs through
exporters and help the
developing a
farming practices will also
commission should develop
water, and fiscal sustainability.
welcome and would
landscape and sustain the
country reach the target of
increased MUDRA loan
policies based on risk
comprehensive framework
help address water stress.
These platforms can help to
hopefully facilitate
consumption among the
foster collaboration between 2. Focus on health, limit, introduction of credit US$2 trillion in exports of growth momentum. for the ethical use of AI. To achieve the net-zero assessments, engage with
goods and services. This
guarantee scheme, credit
Operationalization of the
target by 2070, clean
Besides, establishing robust
experts and stakeholders,
central and state
middle class.
support during stress
body should set up
Anusandhan National
data governance policies.
and build grassroots
energy transition is
governments, ensuring that
branches in key trading
period, setting up of
Research Fund with a
imperative.
Addressing AI skill gaps by
capacity to enhance
reforms are effectively education and e-commerce export hubs, hubs worldwide to financial pool of Rs 1 lakh initiating skill training Several policy measures to resilience and adaptive
implemented across the
employment
facilitate global market
among others, will further
crore dedicated to spurring
programs, also require
capability. The path to a
country.
expedite energy transition
drive employment.
access for Indian products.
Apart from this, we list out generation is critical for Government may consider The government has private sector research and 5. An integrated approach announced in the budget, resilient and sustainable
priority consideration.
inclusive and
innovation at commercial
future requires an
including taxonomy for
sustainable
scale in the union budget
implemented numerous
establishing an
integrated approach that
the 5 key thrust areas which development: Education International Mobility reforms to improve the will propel research and for addressing water climate finance and setting addresses water security,
should underline the focus of
security, clean energy
up of energy targets for
and health are critical
the new government.
pillars for achieving Authority under the ease of doing business, and innovation. and adaptation is key to hard-to-abate industries, promotes clean energy and
this pace of reforms should
Ministry of External Affairs
1. Government should inclusive and sustainable (MEA) to leverage global be continued to enhance India should be at the a sustainable future: are laudable steps towards builds adaptive capacity.
continue its thrust on growth. The government manpower shortages and the investment climate and forefront of technological With rising frequency and clean energy transition.
This initial period should THE TASK AHEAD IS TO capex and boost should announce roadmaps open overseas employment manufacturing
consumption demand
to increase expenditure on
focus on laying a clear and
the new detailed roadmap, prioritizing MAINTAIN THIS while focusing on fiscal education to 6 per cent of avenues for Indian competitiveness. Defining
workforce.
timelines with deemed
reforms, and implementing MOMENTUM AND prudence: Investment, GDP and on health to 3 3. Thrust on building approvals for regulatory
key initiatives that will drive STEER THE COUNTRY particularly public capex, per cent of GDP to ensure manufacturing and permissions, establishing a
TOWARDS BECOMING A
affordable and accessible
has been the key driver of
the nation forward. Each
action taken should signal a DEVELOPED ECONOMY India’s growth story in the quality education and export competitiveness centralized online
grievance redressal
strong commitment towards BY 2047 post-pandemic period. healthcare for all. should continue: mechanism, decriminalizing
continuing the reform Government should India's young population, Complementing the business laws, and
trajectory and accelerating continue its thrust on with a median age of 28 services sector growth, introducing self and
growth. One of the foremost tasks for capital formation. Along years, represents a vibrant rapid manufacturing third-party certifications
the new government is with the focus on workforce that requires growth is essential for under various laws are
building consensus on infrastructure, government decent job opportunities. realizing the goal of Viksit crucial measures that can
growth and next-generation reforms. should also prioritize Generating employment Bharat. Government enhance ease of doing
Sustained reforms have health, education, and rural and livelihoods is critical to initiatives such as the business. Additionally,
propelled India to its current infrastructure, such as Production Linked
position, but to maintain this irrigation, warehousing, and reap the benefits of Incentive (PLI) scheme, government should
high growth, next gen reforms cold chain infrastructure. demographic dividend and which have helped tap continue its focus on
in areas that fall under state While continuing the drive inclusive growth in India’s vast manufacturing reducing the cost of doing
or concurrent domains are thrust on capex, the the economy. The budget’s potential, need to be business. Including
The first quarter of the new crucial. The Union Budget government must adhere massive thrust on job sustained. Expediting the petroleum products and
2024-25 has identified next to fiscal prudence to creation, including the implementation of labour electricity in GST will help
generation reforms as a key maintain macroeconomic announcement of three codes and launching reduce power and logistics
priority area, emphasizing the stability, targeting the schemes under national missions for costs. A task force may also
budgeted fiscal deficit of Employment Linked advanced manufacturing be set up to examine ways
4.9 per cent of GDP for Incentives (ELI) and and materials will further to reduce high shipping
increased allocation
costs for Indian exports
Mr Sanjiv Bajaj, Past President, CII & Chairman, CII Economic Affairs FY25. towards skilling is poised enhance India's and imports.
Council and Chairman & Managing Director, Bajaj Finserv to generate significant manufacturing capabilities,
ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 07
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024