Focus ought to be on dexterously achieving all I-Day aspirations

President Droupadi Murmu in her speech on the eve of Independence Day recalled the extraordinary manner the freedom struggle had achieved its objective and how the martyrdom of countless known and unknown freedom fighters had ensured that India regained its rightful place in the comity of nations. The country’s economic activity is gradually gaining momentum despite global uncertainties. The last quarter’s GDP data, although surprising on the face of it, was not completely unexpected. The GDP growth in the fourth quarter has pushed up the full-year GDP growth of FY2022–23 to 7.2%, around 200 basis points (bps) higher than the earlier estimate. India is expected to grow between 6% and 6.3% in FY2023-24 and bear a stronger outlook, thereafter. Taken from a different angle, should the global uncertainties recede, the growth could surpass seven per cent in the next couple of years. The country is hoping that crude oil prices will remain range-bound that is within $75-80 per barrel and not breach $110, thereby easing pressure on global inflation. The RBI balances growth, inflation and depreciating currency against the US dollar and capital flight by maintaining a tighter policy stance. It will, quite likely, go for another hike before it halts any further hikes.

The government’s efforts towards consolidation of expenditure continue, supported as they are by buoyant revenues and; inflation eases but remains vulnerable to food prices. In a worst case scenario, inflation spirals up globally, impeding growth in investments. The central bank makes further hikes but retracts later as growth tumbles. Investors factor in uncertainties and focus on growth potential, as a result of which investments will turn robust over the next two years. Keeping in mind the impact of climate change, special focus should be on green growth. The government should keep its commitment towards increasing the non-fossil energy capacity to 500 GW and also meeting 50% of its energy requirements from renewable energy by 2030; reducing the total projected carbon emissions by one billion tonnes by the same time-frame; reducing the carbon intensity of its economy by less than 45% and achieving the target of net zero by 2070. By 2047, India should be a global powerhouse with the size of economy being around $ 35 trillion. The national manufacturing policy had envisaged enhancing the share of manufacturing to GDP from 16 to 25 per cent and to create 100 million jobs by 2022.

India enjoys demographic advantage wherein almost 63 per cent of the population is in the economically active age-group. In other words, the child and old-age dependency ratio remains low, compared to the economically active population, which, if productively used, can have a multiplier effect on both growth and employment. However, the declining labour force participation rate for the 0+ and 15-64 age-groups raises concern. Facilitating creation of quality jobs with decent wages and speeding up skilling of the workforce should be the focus. Initiatives like RPL and Skill Card will go a long way in achieving the objectives of skill India-providing skilled manpower for the manufacturing and non-manufacturing sectors.