BUSINESS AND ECONOMY : AGRICULTURE: THE FUTURE PILLAR OF GROWTH.

BY ROBIN GHOSH
(ECONOMIST)

KOLKATA, 18 AUGUST 2023:.

The promise of the PM to make India as the third largest economy by 2025 needs some kind of introspection.

Let us quickly browse through some useful data.

1. India is the fifth largest economy with a GDP of $ 3.7 trillion.
2. The US tops with $ 26.9 trillion followed by China at $ 19.4 trillion.
3. Japan’s GDP is $ 4.4 trillion and Germany’s $ 4.3 trillion.
4. By 2027, India’s GDP is likely to be $ 5.2 trillion, while the US would be at $ 31trillion and China at $ 25.7 trillion.

But if you are assessing the real index of the welfare of the people – then you have to evaluate and look at GDP and per capita GDP in Purchasing Power Parity( PPP).

What is Purchasing Power Parity? It means what a US dollar can buy in that country. If you assess GDP in PPP – India is third largest with a GDP ( PPP) of $ 13 trillion with China at the top ($33 trillion) and USA second ($ 26.9 trillion).

Unfortunately, India’s per capita income is low – lowest among G20 countries in both dollar and PPP terms.

On reflection, the core challenge is – how to raise the per capita income of the people?

Realistically speaking India has to devise an economic and business model – a new development pathway.

Innovative policies and design thinking is required backed by political will and commitment.

The fundamental pillars of the new development pathway are:

1. Raise per capita income of the people
2. Move people from low productivity to high productivity jobs.
3. Raise farmers’ income by providing best agri-inputs and agri-market.
4. Double investment in agri R&D, irrigation, rural infrastructure and ease of doing business.

5. Invest heavily in education and skill formation in rural areas.
6. China followed a unique model of moving people from rural areas and imparted high skill training and engaging the trained skillforce to build New China.

If India has to stand as a nation, as a democracy and continue its growth story – the growth momentum has to continue. It shouldn’t get derailed from its development pathway..