India set to face more challenges as its economy grows
It's certainly an extraordinary assessment IHS Markit, London-based information provider, has made about the economy of India, which will overtake Japan as Asia's second largest economy by 2030. In next eight years India's gross domestic product (GDP) will surpass that of Germany and the United Kingdom, thus getting the rare distinction of being the world's third largest economy after the US and China. At present, India is the sixth largest global economy. The other five economies are the US, China, Japan, Germany and the UK. According to the assessment made by IHS Markit, India's nominal GDP will swell from $2.7 trillion in 2021 to $8.4 trillion by 2030.
"This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region," says IHS Marking, while adding that "an important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending."
India's consumption expenditure has been predicted to double from $1.5 trillion in 2020 to $3 trillion by 2030. For the full fiscal year 2021-22, India's real GDP growth rate is projected to be 8.2 per cent, rebounding from the severe contraction of 7.3 per cent year-on-year in 2020-21. It is strongly felt by experts, data and trend analysts that the "rapidly growing consumer market and its large industrial sector have made India an increasingly important investment destination for multinationals in many sectors, including manufacturing, infrastructure and services." Given the size of India as a nation and colossal strides the county has made in different walks of socio-political, economic, medical and scientific life in the past 75 years of Independence, one will not disagree with what IHS Markit has predicted. However, what is of paramount of importance is to see how the benefits of economic growth in terms of size and variety percolate to the masses!
As per the estimates of the UN Department of Economic and Social Affairs, India's population will reach 1.5 billion by 2030 and hit 1.64 billion in 2050. At present, there are multiple affirmative measures and interventions to fight a decisive war against hunger, starvation, malnutrition and other challenges to ensure India has one of the healthiest human capitals in the world. The gross enrolment ratio (GER) of less than 30 per cent makes a comprehensive pointer to the need for adopting a multipronged strategy to combat the country's multidimensional poverty, which dashes one's hope for education and health in a ruthless manner. It remains to be seen how uniformity is ensured in matters of health and education facilities, which are ethical, affordable and certainly of great quality for all, and not for the rich and powerful. Coincidentally, the year 2030 is also the deadline to meet 17 Sustainable Development Goals (SDGs). The most prominent among them are hunger, poverty, health, education, gender equality and building a sustainable environment. Now, some deep diving to understand the kind and amount of efforts India needs to make so that the benefits of an over $8 trillion economy are reaped by all. As the third largest economy of the world, Japan has presently a little over 12 crore people to take care of. India has nearly 140 crore people. Certainly a lot of quality attention will be required to bridge the income disparities among the people either by creating more gainful opportunities for the masses so that their income goes up or by supplementing their income by crediting a fixed amount in their accounts every month. Increase in average per capita income has no meaning if the income gap persists and access to justice, health and education is not hassle-free.
Japan spends over 10 per cent of GDP on healthcare. It has one of the best education systems in the world. High-quality education system has consistently brought laurels to Japan globally. The school system epitomizes the values of egalitarianism, harmony, social equality, and affordability.
It is not necessary at all to copy the development model of any economy of the world. What is required is sustainable and qualitative improvement in people's ease of life and a boost to the quality of human capital. Human capital development is the key to peace, prosperity and happiness of a nation. Social and economic developments are interlinked. Health, education and nutrition of children are an important end for a nation, which aspires to be dynamic, competitive and thriving. It is not a simple statement that children are the future of the nation. It conveys a lot, indeed! If the investment is not made in them, then the loss is going to be quite huge. Having the youngest population of the world means a lot. It is full of opportunities and challenges as well. If they are put to productive use properly, then they will create assets for the nation. If left half used or abused, their talent and energy will be wasted.
It is a moment for India to revisit strategies, priorities and approaches as eight years down the line, it will be the third largest economy of the world, which also means better health, education, and travel and infrastructure facilities for the masses. A wholesome approach by the government in bridging income gaps among people, yawning disparities for want of inclusive and affordable education and health facilities for all, ending discrimination in all forms will set the ball rolling for making India a vibrant nation. The challenges ahead are not so simple but certainly not insurmountable. A political will power is required to end the practice of discrimination between haves and have not's. Rich or poor, ailments don't discriminate in causing pain. Flourishing of merit is not a matter of one's affluence but of the kind of nurturing is provided to a child. As the world's third largest economy, India must strive to be a global role model for inclusive human capital development!
(The writer is a senior journalist and author. The views expressed are strictly his personal)