Panagariya also highlighted that the country must multiply its current Gross National Income (GNI) per capita by eight times to become Viksit Bharat (developed India).
“A sustained average annual growth rate of 7.8 per cent over the next 24 years would be required to achieve this goal,” said Panagariya while delivering an address at IIT-Tirupati.
Elaborating on the feasibility of this goal, Panagariya cited India’s growth trends in the last two decades, where its GDP not only grew at 8-9 per cent but also overcame several setbacks like the global financial crisis, the COVID-19 pandemic, and others.
He outlined key factors, such as the demographic dividend, that support India’s future growth.
According to the economist, India benefits from a large and young working-age population, which translates into higher savings, scalable service delivery, and increased productivity.
Though reforms progress more slowly in a democratic setup, Panagariya said India has made steady headway in key areas such as infrastructure development.
“Landmark projects like the Atal Setu and the new Parliament building illustrate India’s growing capacity to execute large-scale projects. There is now a pressing need to scale up private enterprises and improve employment in high-productivity sectors, especially in manufacturing,” he said.
On underemployment, Panagariya said there is a need to shift workers from micro-enterprises to more productive firms, stressing the importance of labour and land reforms.
Further, he called for policies that enable enterprise growth and better workforce absorption by the private sector.
Acknowledging the lag in manufacturing growth, Panagariya identified restrictive labour laws as a key bottleneck and outlined the need for medium-sized enterprises to scale up, along with industry-led skilling initiatives, which are crucial for enhancing workforce productivity.
On climate change, he said India alone cannot solve the global crisis. However, he added that it can adopt dual domestic objectives, such as tackling pollution in cities and securing energy through non-fossil fuel sources, to ensure sustainable development while adapting to climate realities.
Moreover, Panagariya envisioned a USD 9 to 10 trillion economy in the next decade if growth pathways are pursued with commitment and consistency. PTI STH SSK KH
