Statsguru: Six charts explain challenges for India's 'Vision 2047'

The NITI Aayog is working on a 25-year vision to make India a $30 trillion economy by 2047. Other goals include nearly $9 trillion in exports and better access to education.

A number of hurdles will have to be overcome to meet these ambitious targets. One of the challenges will be to maintain growth at 9 per cent, required to reach $30 trillion over a 25-year period.

However, India has done it before. Gross domestic product (GDP) at current prices in US dollar terms grew at over 9 per cent in the 25 years after liberalisation. This was on the back of unprecedented growth during the early 2000s.

But the world economy is now less open than before because of a variety of reasons. The global growth is also likely to remain below par in the foreseeable future. India’s long-term GDP growth (current US $) since 1960, the earliest period for which World Bank data was available, has been under 8 per cent (chart 1).
 

Exports will have to reverse years of relatively slow growth. It has declined after touching a high of 25.4 per cent of GDP a decade ago (chart 2). It would be difficult to grow at a higher pace without the support of exports. State-wise differences in income may affect the ability to move to a higher per capita income at the national level. The average person in the richest state earns nearly 10 times that in the poorest. This ratio has remained at similar levels over the last decade (chart 3).
 

There is a similar divergence in social goals like literacy and school education. States like Kerala are already ahead of the 2047 target, while others are lagging behind. Kids in laggard states spend less than five years in school, compared to more than 10 years in a rich Union Territory like Chandigarh (charts 4, 5).
 

A key lever to push for growth could be agricultural reform and better productivity. The sector accounts for a fifth of the economy and half of employment. Yields, however, remain below global levels (chart 6).