India's per capita income can reach levels of $8000-10,000 by 2025 from the present $1600 if the economy grows at 9 per cent annually, Chairman of Prime Minister's Economic Advisory Council C Rangarajan said on Friday.
"As we look ahead, growth is an important factor in generating employment and reducing poverty", Rangarajan said in his address at the First Annual Convocation of the Indian Institute of technology, Hyderabad (IITH).
He said technology can play an important role in almost every sector of the economy in enhancing productivity and production.
"It has been estimated that only if we grow at 9 Per cent per annum, India's per capita GDP will increase from the current level of $1,600 to $8,000-10,000 by 2025," he added.
India will become part of the middle income group of countries when it achieves $8000-$10,000 per capita income, he said.
Achieving and sustaining a high growth rate requires action on several fronts, he said adding technology upgradation is one among them.
The economic advisor said the Indian economy is currently passing through a difficult phase with growth having slowed down and inflation remaining high.
The fiscal and current account deficits also stand at high level, he said.
"These issues need to be addressed, if we have to achieve a sustained high growth rate.
"However, these developments should not cloud the fact that over the seven year period beginning 2005-06, the average annual growth rate has been 8.3 per cent," he said.
Rangarajan said India needs to evolve a policy framework which encourages innovation and diffusion.
This will require action on several fronts and attention to the overall macro-economic policy framework.
It will also require "R & D efforts by individual firms, direct and indirect roles of government and government sponsored institutions in facilitating innovation and diffusion, identification of areas/industries to be given priority, and the role of Universities and scientific institutions".
Image: The Indian parliament building. | Photograph: B Mathur/Reuters
