On the occasion of India’s 75th Independence anniversary, citizens have to think and debate on many aspects regarding the development of the economy. Now the time has come for the country to accelerate its economy. To boost India’s economy by 2030, what are the three growth boosters it can take advantage of to achieve growth?
Bharat in 2030
The changing global dynamics will see Bharat play a larger role on the economic front in the coming years, in addition to spiritual and holistic growth-oriented approaches for the benefit of all and balancing and nurturing the environment. The current government’s pro-business policies, as well as a skilled and knowledgeable workforce, will strengthen each sector and propel the economy to new heights to compete with China.
90 million new nonfarm jobs by 2030.
A clarion call is being issued for India to accelerate its growth and meet the aspirations of its growing workforce. To absorb the 90 million new workers expected to enter the workforce based on current demographics, India needs to create at least 90 million new nonfarm jobs by 2030.
To return to a high-growth path, India’s sectoral mix must shift toward higher-productivity sectors with the potential to create more jobs. Within individual sectors, a shift toward new business models that capitalize on global trends could boost productivity and demand.
Mckinsey and Company stated, “We believe that the manufacturing and construction sectors will experience the greatest acceleration in GDP growth relative to the past. Manufacturing productivity has the potential to rise by about 7.5 percent per year over the next decade, accounting for more than one-fifth of the incremental GDP in our estimates. Read more at https://www.mckinsey.com/featured-insights/india/india-ahead
Construction could account for up to one-fourth of the incremental gross jobs.
Furthermore, both the labor-intensive and knowledge-intensive sectors will need to maintain and improve on their previous strong momentum. As part of a high-growth strategy, we estimate that approximately 30 million farm jobs could be transferred to other sectors by 2030″.
$2.5 trillion in economic value by 2030
In the aftermath of the pandemic, global trends such as digitization and automation, shifting supply chains, urbanization, rising incomes, demographic shifts, and a greater emphasis on sustainability, health, and safety are accelerating or taking on new significance. These trends may manifest as three growth boosters for India, becoming the hallmarks of the post-pandemic economy. Within these three growth drivers, 43 potential business opportunities could generate approximately $2.5 trillion in economic value by 2030 and support 112 million jobs, or approximately 30% of the nonfarm workforce.
First growth driver
India would need to improve its competitiveness in high-potential sectors such as electronics and capital goods, chemicals, textiles and apparel, automobiles and auto components, and pharmaceuticals and medical devices, which accounted for approximately 56% of global trade in 2018. India’s share of global exports in these sectors is 1.5 percent, while its share of global imports is 2.3 percent. It could also leverage its long-standing expertise in IT-enabled services to incorporate digital and emerging technologies such as artificial intelligence (AI) and machine learning-based analytics. In addition, the country has the potential to develop high-value agricultural ecosystems, healthcare services for India and the rest of the world, and high-value tourism. This theme offers as much as $1 trillion in economic value.
According to CNBC, the global fleet of electric vehicles increased by 54% in 2017 to approximately 3.1 million. By 2030, the number of electric vehicles on the road worldwide is expected to reach 125 million. The EV push in India creates a slew of business opportunities in three key areas: mobility, infrastructure, and energy. Among these are opportunities in EV franchising, the EV OEM market, battery infrastructure, solar vehicle charging, and battery swapping technology. According to NITI Aayog, a total investment of US$ 267 billion (Rs.19.7 lakh crore) in EVs, battery infrastructure, and charging infrastructure is required to complete the transition to EVs.
The Indian government has always been at the forefront of developing policies for EV adoption in the country. Fame India, PLI, battery swapping policy, and numerous other initiatives. According to the Ministry of Skill Development and Entrepreneurship (MSDE), the EV industry could create 10 million direct jobs and 50 million indirect jobs by 2030.
In his inaugural address to the Semicon India-2022 conference in Bengaluru, the Prime Minister stated that new world order is forming and that the country must seize the opportunity. He went on to say that India is hungry for “technology and risk-taking.” According to PM Modi, the goal is for India to become a key partner in global semiconductor supply chains.
“We want to work in this direction on the basis of high-tech, high-quality, and high reliability,” he said, adding that “semiconductors are playing a critical role in the world in more ways than we can imagine.”
PM Modi stated, “We are working to unleash the next wave of innovation in data, AI (artificial intelligence), and other technologies.” He predicted that India’s economy would grow rapidly.
The country has the fastest-growing startup ecosystem in the world. Every few weeks, new unicorns appear. India’s semiconductor consumption is expected to exceed $80 billion by 2026 and $110 billion by 2030.
Modi stated that the country has implemented broad reforms to improve the ease of doing business in India. Last year, India abolished over 25,000 compliances and pushed for license auto-renewal. Similarly, digitization improves the regulatory framework’s speed and transparency.
India is also heavily investing in skilling and training young Indians for the needs of the twenty-first century. Modi stated that India has an exceptional semiconductor design talent pool, accounting for up to 20% of the world’s semiconductor design engineers.
Almost every one of the top 25 semiconductor design firms has a design or R&D center in the country. The country recently announced its ‘Semi-con India Programme,’ which will cost more than $10 billion.
The goal of this program is to provide financial assistance to companies that invest in semiconductors, display manufacturing, and design ecosystems.
Ayurveda is one of the oldest Indian systems of medicine, deriving from the word ‘Ayurveda,’ which is found deep within the Indian subcontinent. It is made up of natural herbs, plant-based medicines, and spices and is used as alternative medicine.
The majority of therapies are used all over the world to promote wellness and health. The primary goal of AYUSH products is to help humans become stronger, live longer, and live healthier lives without the use of medications, painful interferences, or complicated surgeries.
The global market for herbal medicine was estimated to be worth approximately US$ 185 billion in 2020. The industry is expected to grow at an 11 percent CAGR to around US$ 430 billion by 2028. India exported approximately 104,511 tonnes of Aayush medicines between April 2021 and January 2022. Mr. Narendra Modi, Prime Minister of India, laid the groundwork for the WHO Global Centre for Traditional Medicine (GCTM) in Jamnagar, Gujarat, in April 2022.
The center, which is the world’s only center for traditional medicine, is a joint project of India’s Ministry of Aayush and the World Health Organization (WHO).
According to WHO, approximately 80% of the world’s population uses traditional medicines such as herbal medicines, yoga, acupuncture, and indigenous therapy.
170 of the 194 WHO Member States reported using traditional medicine, and their governments asked WHO for evidence and research data to inform policies, standards, and regulatory frameworks for safe, cost-effective, and equitable use. The primary goal of GCTM is to meet the world’s knowledge needs. GCTM was founded with the goal of engaging and benefiting the world, as well as catalyzing ancient wisdom and modern science for the health of people and the planet.
Second growth Driver
This group of business models can eliminate inefficiency in areas that support a competitive economy, such as power, logistics, financial services, automation, and government services. Opportunities for value-creating market-based models could emerge in each case, generating approximately $865 billion in economic value by 2030. Next-generation financial services, such as innovation in digital payment offerings, are examples. Work automation and Industry 4.0 could boost efficiency; for example, about 60% of manufacturing output could benefit from predictive maintenance, smart safety management, and product design. These, in turn, can increase plant and factory productivity by 7 to 11%.
Third growth driver
If Indian businesses can tap into the shifting preferences of Indians seeking a higher and holistic standard of living, they can generate an estimated $635 billion in economic value by 2030. In retail, increasing India’s share of e-commerce and modern trade to 20% and establishing digitally enabled supply chains could generate $125 billion in economic value by 2030 and boost the productivity of 5.1 million storekeepers and e-commerce workers. Mitigation and adaptation to climate change are also creating opportunities, such as more energy-efficient buildings and factories. In January 2022, India’s installed renewable energy capacity was 152.36 GW, accounting for 38.56 percent of total installed power capacity.
The country intends to install approximately 450 Gigawatts (GW) of renewable energy capacity by 2030, with solar accounting for approximately 280 GW (more than 60%). From 2.63 GW in March 2014 to 49.3 GW at the end of 2021, solar power installed capacity has increased more than 18 times. Off-grid solar power is rapidly expanding in India, with 329,000 off-grid solar products sold in the first half of 2021.
Finally, digital communication services offer opportunities for universally accessible, low-cost high-speed internet connectivity as well as rapidly expanding digital media and entertainment ecosystems. (Source: McKinsey and Company, IBEF.org, Business Standard)
The movement for Self-Reliant India is gaining traction. Recent examples include increased exports of toys and defense equipment. We shouldn’t be surprised if, by 2035, the world recognizes Bharat as a “Vishwa guru.”
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