Amid allegations against policy paralysis and graft flying thick and fast, US-based information services firm Dun & Bradstreet (D&B) on Thursday said India would see improvement in governance and reduction in corruption as it is expected to continue on high growth path in this decade.
In a report, D&B pegged Indian economy’s growth at 185 per cent to more than five trillion dollars by 2020 from 1.75 trillion dollars at the end of 2010-11, to be driven by services.
“As India moves ahead to achieve economic and social development, we anticipate significant improvement in governance and reduction in corruption,” the New Jersey-headquartered consultancy firm said in its report, India 2020 Outlook. At five trillion dollars, India’s economy size would be what Japanese economy was at 2010, D&B said. “India’s growth would be driven by rapidly expanding services sector. Strong growth in domestic savings will support domestic investment,” said the report.
At a function to mark release of the report, Planning Commission Principal Advisor Pronab Sen said, “In 2020, we can achieve to become a 5-trillion-dollar economy, if economy grows at 8.5-9 per cent and inflation at 5-5.5 per cent.” It means an annual economic growth between 13.5-14.5 in nominal terms can make India a 5-trillion-dollar in the next nine years.
The report said consumption would continue to be the major contributor to GDP in the current decade, though its share was expected to decline gradually due to significant increase in share of domestic investment. The report further spoke of “substantial rise” in private investment activity and surge in infrastructure investment to drive investment.
Former RBI Deputy Governor Shyamala Gopinath, speaking at the same function, said focus should be on execution rather than financing to expedite infrastructure development.
The 1841-founded D&B further said rising income levels, coupled with a bulging of the young working-age population, would lead to significant growth in private final consumption expenditure. Maharashtra, Gujarat and Andhra Pradesh “will be among the most developed states” in the country by 2020.
The so-called BIMAROU states (Bihar, Madhya Pradesh, Rajasthan, Orissa & Uttar Pradesh), which have been considered sick in terms of development, are expected to begin leveraging their huge potential in terms of vast natural resources and manpower. Their growth is expected to gain traction, especially in the second half of the current decade.
Besides, per capita income of Bihar and Madhya Pradesh is expected to triple by 2020, although remaining below national average.