Chapter-5: Medium-Term Outlook - A Growth Strategy for New India
- The Medium-term growth outlook will happen in the context of the following global trends, namely, increased geo-economic fragmentation, a global push for self-reliance, looming climate change, rise of technology as the biggest strategic differentiator and limited policy space for countries across the world.
- Going forward the Government’s focus must turn to bottom-up reform and strengthening the plumbing of governance so that the structural reforms of the last decade yield strong, sustainable, balanced and inclusive growth.
- Key areas of policy focus in the short to medium term include job and skill creation, tapping the full potential of the agriculture sector, addressing MSME bottlenecks, managing India’s green transition, deftly dealing with the Chinese conundrum, deepening the corporate bond market, tackling inequality and improving our young population’s quality of health.
- The growth strategy for Amrit Kaal is predicated on six key areas. Firstly, there must be a deliberate focus on boosting private investment. Secondly, the growth and expansion of India’s Mittelstand (MSMEs) is a strategic priority. Thirdly, the potential of agriculture as an engine of future growth must be recognised and policy impediments removed. Fourthly, there is a need to secure the financing of green transition in India. Fifthly, the education-employment gap must be bridged. And finally, focused building of state capacity and capability is required for sustaining and accelerating India’s progress.
- In the medium term, the Indian economy can grow at a rate of 7 per cent plus on a sustained basis if we build on the structural reforms undertaken over the last decade. This requires a tripartite compact between the Union Government, State Governments and the private sector.
Chapter 6: Climate Change and Energy Transition: Dealing with Trade-Offs
- India has adopted the mission-mode approach to address climate change. A report by the International Finance Corporation recognises India’s efforts to achieve committed climate actions, highlighting that it is the only G20 nation in line with 2-degree centigrade warming.
- India has made significant progress on climate action in terms of an increase in its renewable energy capacity and improvement in energy efficiency. As of 31 May 2024, the share of non-fossil sources in the installed electricity generation capacity has reached 45.4 per cent. Further, the country has reduced the emission intensity of its GDP from 2005 levels by 33 per cent in 2019.
- India’s energy needs are expected to grow 2 to 2.5 times by 2047 to meet a growing economy's developmental priorities and aspirations. Considering that resources are limited, the pace of energy transition would need to factor in alternative demands on the resources for improving resilience to climate change and for sustained social and economic development.
- Expanding renewable energy and clean fuels will increase demand for land and water. Most renewables are land-intensive and demand the highest land use requirements among the different energy sources. Further, the expansion of renewable energy requires battery storage technologies which in turn require the availability of critical minerals. The source of such minerals is, however, geographically concentrated.
- Recognising the importance of energy efficiency measures in accelerating clean energy transitions while supporting energy security, the Government has taken several steps to improve energy efficiency.
- The country has taken many measures to improve the business environment and catalyse greater quantum of resources. The Government undertook the issue of sovereign green bonds amounting to ₹16,000 Crore in January-February 2023 to raise proceeds for public sector projects that would contribute to the efforts to reduce the intensity of the economy's emissions, followed by ₹20,000 Crore raised through sovereign green bonds in October-December 2023.
- The Government of India’s Mission LiFE is envisaged as a mass movement to address climate change and foster sustainable living based on conservation and moderation principles. The Government supports voluntary environmental actions such as the Green Credit Programme (GCP), which incentivises individuals, communities, private sector industries, and companies to participate in environment-positive activities by offering green credits as rewards.
- India has led several international initiatives towards climate change mitigation and building resilience. The International Solar Alliance (ISA), One World, One Sun, One Grid (OSOWOG), the Coalition for Disaster Resilient Infrastructure (CDRI), the Infrastructure for Resilient Island States’ (IRIS) and the Leadership Group for Industry Transition (LeadIT) are some of such important examples.
Chapter 7: Social Sector - Benefits that Empower
- The Indian economy is moving forward with a reformed approach to welfare, focused on empowerment, saturation approach, universal access to necessities, efficiency, cost-effectiveness, and enhanced participation of the private sector and civil society.
- The education sector is bustling with the across-the-board transformation led by the NEP 2020, focusing on Foundational Literacy and Numeracy for every child passing the third standard. The ‘Poshan bhi Padhai bhi’ programme for early childhood education aims to develop the world’s largest, universal, high-quality preschool network at Anganwadi Centres.
- In healthcare, Ayushman Bharat is not only saving lives but also saving generations from the debt trap. More than 34.7 crore Ayushman Bharat cards have been generated, and the scheme has covered 7.37 crore hospital admissions. Considering the multiplier effect of low costs, the scheme saves more than 1.25 lakh crore of out-of-pocket expenditure for poor and deprived families.
- The challenge of ensuring mental health is intrinsically and economically valuable, as the lack of it can lead to significant productivity loss and rise in healthcare costs. Overusing smartphones and the Internet are associated with the ‘great rewiring of childhood’.
- Women-led development emanates from social, economic, and political empowerment. The DAY-NRLM programme covers over 89 million women through 8.3 million Self Help Groups. It has been empirically associated with women's empowerment, reduced social evils, higher participation in village institutions, and better access to government schemes.
- A host of enabling programmes reinforces better quality of life in the hinterland. The self-help movement has come far in its outreach, and the social capital stands to gain from professional assistance in marketing and management.
- MGNREGS demand is not a real indicator of rural distress but is predominantly linked with the State’s institutional capacity, the difference in minimum wages, etc.
- Governance and unity of purpose at all levels of government remain key for the successful implementation of a social programme. To maximise the efficiency of translating spending into outcomes, many channels at the ground level need to be unclogged.
Chapter 8: Employment and Skill Development: Towards Quality
- Indian labour market indicators have improved in the last six years, with the unemployment rate declining to 3.2 per cent in 2022-23.
- Rising youth and female participation in the workforce presents an opportunity to tap the demographic and gender dividend.
- The net payroll additions under EPFO have more than doubled in the past five years, signalling healthy growth in formal employment.
- With artificial intelligence taking root in several spheres of economic activity, steering technological choices towards collective welfare is key. Employers owe it to themselves to strike a balance between deploying technology and labour.
- To generate and sustain quality employment, agro-processing and care economy are two promising candidates.
- The Government has implemented measures to boost employment, foster self-employment, and promote worker welfare.
- The rise in the number of candidates undergoing skill development through the Government’s flagship programmes has underlined the thrust to ‘Skill India’.
- Many regulatory chokeholds, such as those related to land use, building codes, restricting sectors and hours open to women’s employment, hold back employment generation. Releasing them is guaranteed to boost employment and raise women’s labour force participation rate.
