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This article was first published 5 years ago  » Business » Can India grow at 9-10% in 2022-23?

Can India grow at 9-10% in 2022-23?

By T N Ninan
February 01, 2019 09:55 IST
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Niti Aayog's plan to create a New India' in less than four years should invite scepticism, argues T N Ninan.
Illustration: Uttam Ghosh/

One of the features of the Modi government is its willingness to set ambitious targets for various programmes, and then to make a determined effort to achieve the goals set.

Such ambition is amply in evidence in the document that the NITI Aayog has released, Strategy for New India@75.

By definition, anything that hopes to create a 'New India' in less than four years (by Independence Day in 2022) should invite scepticism.

Still, the details are worth exploring.

The overarching objective is to deliver 9% to 10% GDP growth in 2022-2023.

To get there, a number of sub-targets are laid out.

How realistic are these?

To find out, sample some of what is laid out (comments are in italics):

  • Double the rate of manufacturing growth, from 7.7%.
  • Accelerate the growth of the mining sector from 3% in 2017-2018 to 14% with an average growth rate of 8.5% during 2018 to 2023.
  • Provide irrigation to all farms.
  • Expand airport capacity more than five times to handle one billion trips a year.
  • Double government spending on education to 6% of GDP. (This is a hoary chestnut.)
  • Increase the proportion of formally skilled labour from the current 5.4% of the workforce to at least 15 per cent. (This translates into about 10 million workers being skilled every year.)
  • Raise the tax-GDP ratio from the 16% to 17% range over the last several years to 22%.
  • Increase public investment from 4% to 7% of GDP. (Question: While farm loan waivers proliferate?)
  • Increase India's share in global international tourist arrivals from 1.18% to 3%.
  • But (in seeming contradiction), increase the number of foreign tourist arrivals from 8.8 million to only 12 million.
  • Double the length of national highways to 200,000 km by 2022-2023 from the existing 122,000 km. (Actually, that increase would be 64% and would involve building 60 km of national highways every day, over and above the construction of state highways and other roads.).
  • Reduce the number of road accidents and fatalities by 50% by 2020, while also achieving zero fatalities on the railways.
  • Achieve 100% electrification of broad gauge track, from 40% cent in 2016-2017.
  • Take R&D expenditure from 0.7% to 2% of GDP.
  • For mining, double the area explored from 10% of the obvious geological potential area to 20%.
  • Reduce the turnaround time at major ports from about 3.44 days (2016-2017) to the global average of 1-2 days.
  • Also, reduce the border compliance time to 24 hours for exports and to 48 hours for imports by 2020.
  • Deliver all government services at the state, district, and gram panchayat levels digitally by 2022-2023, thereby eliminating the digital divide.

Separately from these physical targets, there is a whole range of policy prescriptions in every sector.

It is not clear whether these are merely exhortations, in the style of the annual Economic Surveys and the old five-year Plans, or required to achieve the stated targets.

Still, here are some of the policy prescriptions:

  • Put in place an economy that is predominantly formal.
  • Exit central public sector enterprises that are not strategic in nature...
  • For larger CPSEs, the goal should be to create widely held companies by offloading stake to the public to create entities where no single promoter (including the government?) has control.
  • Privatise State power distribution utilities.
  • Rationalise power tariffs to ensure global competitiveness of Indian industries. (That means high industrial power tariffs will no longer subsidise agricultural and domestic powers users?)
  • Revisit rail tariffs, to make the passenger and freight segments sustainable.
  • Freight tariffs should be competitive with the cost of road transportation. (Sustainability may conflict with competitiveness.)
  • Abolish the Essential Commodities Act.

Some years ago, when Atal Bihari Vajpayee as prime minister was presented by McKinsey with a similarly ambitious set of goals, his pithy response was: 'Yeh sab kaise hoga? (How will all this happen?)'

The old Scottish saying was ruder: If wishes were horses, beggars would ride.

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T N Ninan
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