Author: Dr. Rajendra Pratap Gupta, PhD

A policy leader, author, architect of Functional AI Pyramid- AI Maturity Model Framework. He has played a key role in drafting India’s National Health Policy 2017 , National Education Policy 2020, and is the key architect of Viksit Bharat. Dr. Rajendra has served in advisory and leadership roles across healthcare, digital transformation, artificial intelligence, and internet governance. He is the Founder of Health Parliament and the International Patients’ Union, Chairman of the Academy of Digital Health Sciences, and a leading force behind the Global Digital Health Summit. He also serves on the UN Internet Governance Forum’s Multistakeholder Advisory Group and leads several global initiatives focused on making healthcare more accessible, intelligent, equitable, and future-ready. An author, speaker, and policy innovator, Dr. Gupta’s work focuses on the intersection of human development, technology, AI, and public policy. Twitter handle @rajendragupta

Twenty-One Independence Days Left: What India Must Do Every Day, Week, Month and Year to Become Viksit Bharat


Vision – A land of Abundance, Opportunity, Spirituality and Technology with Happy Citizens

15 August 2026 | Dr Rajendra Pratap Gupta

The arithmetic of a dream

Today is our 80th Independence Day. After today, we have twenty-one more Independence Days before 2047.

Twenty-one. That is fewer than the number of years it took India to move its research spending from 0.7% of GDP to… 0.7% of GDP.

I have said for years that short-term solutions of today become the long-term problems of tomorrow. The Viksit Bharat Abhiyan was built on that single insight: we borrowed our planning from Russia, our bureaucracy from Britain, and our aspirations from America , and never built an Indian model of development of our own. We focused on the top floor without laying a foundation.

But something has changed since we published that primer. The window has not just narrowed. It has been compressed by Artificial Intelligence.

The view from 2030

When I mapped the Functional AI Pyramid — the AI Maturity Model, I placed seven levels on it: two pre-AI levels (Naïves and Watchers) and five AI levels — Talkers, Thinkers, Doers, Creators and Leaders. What matters for today’s speech-making and flag-hoisting is a single, uncomfortable fact about where we are standing on that pyramid right now.

  • Level 1 — Talkers (AI that talks): 2015–2024. Done. Behind us.
  • Level 2 — Thinkers (AI that thinks): 2023–2025. Behind us.
  • Level 3 — Doers (AI that acts): 2025–2027. We are living in it today.
  • Level 4 — Creators (AI that creates): 2027–2029. One general election away.
  • Level 5 — Leaders (AI that runs systems): 2029–2030. Within this decade.

Read that again. The entire transformation that we assumed would take a generation will be substantially complete before the first quarter of this century’s second half begins. Medicine has historically taken seventeen years to adopt a proven discovery. AI will not wait seventeen years. It is compressing decades into months.

So here is the view of the future I want every Indian to hold in their mind today:

Firstly, every Indian must introspect as a generation. At least, the pre-Gen Z generation has messed up. We have left a world in crisis, economically, environmentally and in every manner we can think of. We have just considered GDP as a measure of our progress, which is so wrong. We need to go back to the drawing board and the Viksit Bharat original document put up the ten building blocks and that is the starting point.

By 2030, every profession will have been repriced. AI first augments, and then replaces what it augments. That is not a prophecy; it is the observable pattern of the last three years. We have to move to a model where we create distributed growth – http://www.projectcreate.tech was one of such initiatives but we need more in terms of rur-ban models creating jobs for every hand.

We must also address the BIG question hiding inside all of this: when the cognitive work of the world becomes abundant and cheap, what exactly is our demographic dividend worth?

We have been selling the world a story about 1.4 billion young people. AI has just changed the price of that story. A demographic opportunity that is not converted into a cognitive and creative opportunity is not a dividend. It is a liability with a birth certificate.

Why the ten building blocks matter more now, not less

Some will read the above and conclude that India needs an AI plan. That is exactly the mistake we made in 1951, and then wondered why the foundation cracked.

Economy is an outcome. It can never be a goal. The same is true of technology.

Building blockWhat AI changes by 2030
VisionForecasting and back-casting become computable. We can finally plan for 25, 50 and 100 years, and audit ourselves annually against it.
Culture & Heritage500,000 heritage sites, 22 official languages, the world’s largest diaspora, AI translation and immersive media make India’s soft power scalable for the first time.
CitizensThe changemaker no longer needs an election or an exam. Inquiry and action are now available to anyone with a phone.
PsychologyThe hardest block. Systems are easy to change; mindsets are not. Ceremonial to functional. Symbolism to substance. Problem-centric to opportunity-centric.
GovernanceNo citizen in the 21st century should visit a government office for an approval. Proactive, system-driven, technology-backed governance is now technically trivial and politically hard.
EnvironmentAI-optimised grids, water, agriculture and logistics, or sustainable AI consumption
Policies, Processes, SystemsLegacy systems must go in five to seven years, not twenty-five. Bureaucracy remains the single biggest bottleneck to India’s potential.
InstitutionsInstitutions must be futuristic, agile, accountable, and driven by data, science and evidence. not by precedent files.
InfrastructureFor 1.61 billion people by 2047, intelligence becomes infrastructure. Compute, data and connectivity are the new roads and railways. But Agriculture and retail will be equally important for a distributed growth model.
EconomyThe outcome of the nine above. A $37 trillion economy at 10.5% growth; $73 trillion at 13.5%. AI, when deployed rationally can help us as a lower-middle-income country

And one non-negotiable principle underneath all of it: We must inculcate ethics and rationale along with a culture of data. The ethical failures of systems are rooted in ethics , governance , the data they are trained on, far more than in the algorithms. A nation that gets its data governance wrong will simply automate its existing inequalities at machine speed. We cannot afford a digital divide in the AI era.

The audit before the action

Before any action plan, one honest question. Where are you on the pyramid today?

  • Naïve — You have not seriously used an AI system this month. You are at the highest risk: irrelevance before you are even aware the transformation happened.
  • Watcher — You have used it, you are unimpressed, you think it is a decade away. Awareness without action is its own form of risk.
  • Talker — You use it to write, translate, summarise, respond.
  • Thinker — You use it to reason, compare options, and make better decisions.
  • Doer — You have deployed it to act: workflows that run without you.
  • Creator — You are making things that did not exist before.
  • Leader — You are redesigning an institution around it.

Most of India’s professional class, including many at the very top, is sitting at Naïve or Watcher while the world moves through Doer. That gap is the whole ballgame.

The action plan: Every Day, Every Week, Every Month, Every Year

Viksit Bharat Abhiyan was always a call of conscience for a call to action. Speeches do not build nations; calendars do. Here is what I believe every Indian — student, farmer, clinician, coder, clerk, CEO ,can commit to from today.

Every day (30–45 minutes)

  1. Start small and be consistent in what you decide to do
  2. Make a positive difference : Make someone smile every day- if you do to a stranger, much better.
  3. Make once change : Eliminate one step. One redundant form, one unnecessary approval, one wasteful process at your desk or in your home. Elimination is the cheapest reform available to a citizen.
  4. Learn a new skill; Write, read or teach in it. Our identity, our fundamental research and our education were all compromised by a rote learning model
  5. Do one act of inquiry. Ask one question about something in your surroundings that affects your life — your ward, your school, your hospital, your water. Change begins with inquiry and action, not with position.
  6. Move your body and log it. Poor stand on their feet, and the old walk on their feet. Health is an enabler of development, not a consequence of it.

Every week

  1. Teach one person what you learned. A parent, a peon, a peer, a student. India will not be lifted by 100 experts; it will be lifted by 100 million competent people.
  2. Give one hour to a public institution. A government school, a PHC, an RWA, a panchayat, a municipal ward. Duties were added to our Constitution twenty-six years after rights. We have been catching up ever since.
  3. Automate one recurring task at work. Move yourself one rung up the pyramid, Talker to Thinker, Thinker to Doer.
  4. Read one primary source, not one headline. A budget line, a policy draft, a judgment, a dataset. Opinions are abundant; evidence is scarce.
  5. Buy from one MSME or artisan. We created a few billion-dollar companies and ignored the enterprises that employ India.

Every month

  1. Mentor one young person on what they should build, not on which exam they should clear.
  2. Spend on culture once. A heritage site, a local art form, a craft, a regional book or film. Thirty-seven per cent of global tourism is culturally motivated, and cultural industries create the most jobs for the 15–29 age group. We should be the culture capital of the world; we are sixth on the list with forty sites.
  3. Run a family review — health screening, finances, and one conversation about why staying and building here is worth it. Six lakh Indians renounced citizenship in five years. Every family retained is a small act of nation-building.
  4. Check your surrounding and if something needs to be changed, take a step for change

Every year

  1. Move up exactly one level of the Functional AI Pyramid. Write down where you are today, and where you will be next 15 August.
  2. Shape one thing that outlives the year
  3. Take one national-interest project beyond your job description — public health, education, environment, MSME, language, or governance.
  4. Reduce your ecological footprint measurably and get one institution around you to do the same.
  5. Publish your own scorecard. What did you build, whom did you lift, what did you eliminate? Personal excellence aligned with national interest — that is the only nationalism that compounds.

Remember- our forefathers fought to get political freedom, and we have to fight for Economic Freedom, and move ahead for a broader goal to create a Developed India

In 1947 we won freedom from a foreign power. In 2047 we must win freedom from being a lower-middle-income country. That is our second freedom struggle, and unlike the first, it will not be fought in jails and on salt marches. It will be fought in classrooms, laboratories, clinics, workshops, ward offices and on 1.4 billion screens — one day at a time.

Sardar Patel dreamed of an India where no one dies of starvation, where justice is neither costly nor difficult, and where the best-paid official does not earn a great deal more than the lowest-paid servant. That dream is still unfinished. AI does not finish it for us. AI only decides how fast we find out whether we meant it.

If India is to become Aatmanirbhar, every Indian must first become dependent on their own Aatma. अगर भारत को आत्मनिर्भर बनाना है तो हर एक भारतीय को अपनी आत्मा पर निर्भर होना पड़ेगा।

That is why I say it again on this 80th Independence Day: Viksit Bharat Abhiyan is a call of conscience for a call to action.

Twenty-one Independence Days. Start today.

🇮🇳 स्वतंत्रता दिवस की हार्दिक शुभकामनाएँ!

आज हम उन वीरों को नमन करते हैं जिन्होंने हमें राजनीतिक स्वतंत्रता दिलाई। अब हमारी पीढ़ी का राष्ट्रीय दायित्व है-भारत को गरीबी, असमानता, अशिक्षा, बीमारी और बेरोज़गारी से मुक्त कर वर्ष 2047 तक एक समृद्ध, आत्मनिर्भर और विकसित राष्ट्र बनाना।

विकसित भारत का निर्माण केवल सरकार का लक्ष्य नहीं, बल्कि प्रत्येक भारतीय का संकल्प है। आइए, इस स्वतंत्रता दिवस पर हम अपने कर्तव्य, कौशल, नवाचार और सामूहिक प्रयासों से राष्ट्र निर्माण में योगदान देने की प्रतिज्ञा लें।

आज़ादी हमें विरासत में मिली है; विकसित भारत हमें विरासत में देना है।

जय हिन्द! जय भारत! 🇮🇳
viksitbharat.org

Dr Rajendra Pratap Gupta is the Founder of Viksit Bharat Abhiyan (Developed India Mission) and the creator of the Functional AI Pyramid — AI Maturity Model. He is the author of Your Vote Is Not Enough, Tough Choices & Hard Decisions: Rebuilding India — the Next 25 Years, and Digital Health: Truly Transformational.

www.viksitbharat.org · www.developedindiamission.org · www.digitalhealth.ac.in

The GDP Illusions- Why We Must Measure the People’s GDP, Not the Nation’s Arithmetic


Dr. Rajendra Pratap Gupta, PhD

I. The Arithmetic Illusion

Every year, finance ministries, multilateral agencies, and the business press celebrate a single number: GDP per capita. It is presented as a proxy for prosperity, the average income of a citizen. But it is nothing of the sort. GDP per capita is a quotient, not a truth. It is the total economic output of a nation divided by its headcount, and in that single act of division lies one of the great statistical illusions of modern economics.

Consider the logic. If ten people are in a room and one of them is a billionaire, the “average wealth” of the room is over a hundred million dollars , while nine people may not have money for dinner. This is precisely how GDP per capita operates at the national scale. It assumes that the value created by the state, by large conglomerates, by capital-intensive extractive industries, and by financial markets flows evenly into the hands of every citizen. It does not. It never has.

The result is a measurement system that tells us how large the economy is, but tells us almost nothing about how much of that economy actually reaches the people, their kitchens, their school fees, their medicines, their savings. It is time to correct this. It is time to move from the Nation’s GDP per capita to what I call the People’s GDP per Capita, a citizen-anchored, consumption-based measure of real income.

II. What GDP Per Capita Actually Measures — and What It Hides

GDP, by the expenditure method, is the sum of four components:

GDP = C + G + I + (X − M)

That is: Private Consumption (C) + Government Spending (G) + Investment (I) + Net Exports (X − M). Of these four, only one — private final consumption — represents what households actually spend on themselves. The other three are real economic activity, but they are not income in the pocket of the average citizen:

1. Government spending (G) includes defence procurement, administrative salaries, debt servicing, and capital works. A missile purchase raises GDP; it does not raise a farmer’s household budget that year.

2. Investment (I) — gross fixed capital formation — is dominated by corporate capital expenditure, real estate, and infrastructure. When a large business house builds a refinery, GDP rises sharply; the turnover and profits accrue to shareholders, and only a fraction reaches workers as wages.

3. Net exports reflect trade flows that may be concentrated in a handful of firms.

When we divide the total of all four by the population, we statistically “gift” every citizen a per-head share of government budgets, corporate balance sheets, and export receipts they will never see. GDP per capita is thus a mean of things that do not belong to the average person.

The deeper flaw is that it is a mean at all. A mean is dragged upward by extreme values at the top. When income concentration is severe, the mean bears no resemblance to the experience of the median citizen.

III. The Saudi Paradox: When Averages Lie Loudest

Saudi Arabia is the cleanest illustration of the illusion. On paper, the Kingdom’s GDP per capita is projected at roughly US$35,000–38,000 in 2026 (IMF, World Economic Outlook, April 2026) — comfortably in the league of developed economies, and around US$63,000 in PPP terms (World Bank, 2024).

But the composition of that GDP tells a different story. A dominant share of Saudi output is generated by hydrocarbons – the state-owned Aramco alone accounts for a very large slice of national income — plus sovereign investment vehicles and a small number of family-controlled conglomerates. The oil rents, the state’s fiscal receipts, and the conglomerates’ turnover are all counted in GDP and then divided across 35 million residents, a third of whom are expatriate workers, many earning modest wages.

The “average Saudi” implied by the per capita figure — a person earning $35,000 a year — is a statistical fiction. The actual distribution is a small apex earning extraordinary rentier incomes, and a broad base whose household consumption and salaries are a fraction of the headline number. Divide the nation’s oil by the people’s headcount, and you manufacture prosperity on paper.

This is not unique to Saudi Arabia. Every economy with concentrated ownership of capital — resource economies, financialised economies, and increasingly, platform-monopoly economies — suffers the same distortion. Including India.

IV. India: Drilling Down from the Headline to the Household

Let us now do for India what is rarely done: strip the headline number layer by layer, using only official and authoritative sources, until we arrive at what the citizen actually commands.

Layer 0 — The Headline. India’s nominal GDP in 2026 is approximately US$4.15 trillion, and conventional GDP per capita is approximately US$2,813 (IMF, World Economic Outlook, April 2026) — roughly ₹2.4 lakh per person per year.

Layer 1 — Remove Government Spending. Government final consumption expenditure is about 9.3% of GDP (MoSPI, National Accounts, FY2024-25). This is legitimate economic activity, but it is not household income. Removing it leaves ~US$2,551 per capita.

Layer 2 — Remove Corporate Capital Formation. Gross fixed capital formation is about 33.5% of GDP (MoSPI, FY2024-25) — factories, real estate, machinery, infrastructure. The turnover of the large business houses is embedded here and in gross value added. Removing it leaves ~US$1,610 per capita.

Layer 3 — What Remains: Private Consumption. Private Final Consumption Expenditure (PFCE) is about 56.3% of GDP (MoSPI, FY2024-25). This yields a consumption-anchored per capita figure of roughly US$1,585 per year (~₹1.3 lakh) — already 44% lower than the headline.

Layer 4 — Ground-Truth It with Survey Data. Even PFCE, being a national-accounts aggregate, over-attributes consumption relative to what households report. The Household Consumption Expenditure Survey (HCES) 2023-24 — the gold standard of ground-level measurement, covering 2.61 lakh households — found average Monthly Per Capita Consumption Expenditure of ₹4,122 in rural India and ₹6,996 in urban India (MoSPI, December 2024). Weighted by population, the average Indian consumes roughly ₹5,100 per month, or about ₹61,000–62,000 per year — approximately US$730.

Layer 5 — Correct the Mean with the Distribution. Even ₹5,100 a month is a mean, inflated by the top. Per HCES 2023-24, the bottom 5% of rural India lives on an average MPCE of just ₹1,677 a month, while the top 5% spends ₹10,137. And per the World Inequality Lab (2024): the top 1% of Indians capture 22.6% of national income — the highest since 1922 — and hold 40.1% of national wealth; the top 10% capture about 58% of income, while the bottom 50% of Indians receive only 15%. Applying that share, the bottom half of India — 70 crore-plus people — subsists on a per capita income of roughly US$840 a year, less than one-third of the headline per capita GDP.

V. The Comparison: Conventional vs. People’s GDP Per Capita (India)

#MeasureValue (approx.)% of HeadlineSource
0Conventional GDP per capita (2026)US$2,813 (~₹2.4 lakh)100%IMF WEO, Apr 2026
1Less: Government final consumption (9.3%)US$2,55191%MoSPI, FY2024-25
2Less: Gross fixed capital formation (33.5%)US$1,61057%MoSPI, FY2024-25
3PFCE-anchored per capita (56.3% of GDP)US$1,585 (~₹1.3 lakh)56%MoSPI, FY2024-25
4Survey-measured household consumption (HCES)US$730 (~₹61,500/yr)26%MoSPI HCES 2023-24
5Bottom-50% per capita income (15% share)~US$840/yr~30%World Inequality Lab, 2024
6Bottom-5% rural consumption₹1,677/month (~US$240/yr)~8.5%MoSPI HCES 2023-24

The verdict is stark: the citizen-experienced economy is roughly one-quarter of the headline economy. The conventional metric tells us India is a US$2,813-per-head nation. The ground truth is that the median Indian lives a US$700–800-a-year consumption life. Both numbers are “correct” — but only one describes the people.

(The same exercise for Saudi Arabia would compress a $35,000 headline to a household-consumption reality in the low-to-mid teens of thousands for nationals — and far less for the expatriate workforce — since household consumption is roughly 40% of Saudi GDP and income is concentrated in state and family-held capital.)

VI. The Framework: Constructing the People’s GDP Per Capita

I propose that every national statistical office publish, alongside conventional GDP per capita, a People’s GDP per Capita (PGPC) — computed through a transparent five-step deduction-and-correction ladder:

Step 1 — Remove Government Final Consumption. State spending is a service to citizens, not income of citizens. It belongs in a separate “public services dividend” account, not in the citizen’s income proxy.

Step 2 — Remove Corporate Capital Formation and Retained Earnings. The turnover and capex of large business houses should be netted out. What should remain from the corporate sector is only what it pays into households: wages, salaries, dividends to resident retail shareholders, and MSME proprietor incomes.

Step 3 — Anchor on Household Consumption. Private final consumption — cross-validated against household expenditure surveys (India’s HCES, and their equivalents globally) — becomes the base. Where national accounts and surveys diverge (as they notoriously do), the reconciliation must be published, not buried.

Step 4 — Report the Median, Not the Mean. The median household’s consumption is immune to billionaire distortion. A country’s PGPC should be its median per capita consumption, with the mean published as a secondary figure.

Step 5 — Publish Distributional Bands. Alongside the median: the per capita consumption of the bottom 50%, the middle 40%, and the top 10% (in the spirit of the World Inequality Lab’s Distributional National Accounts). One number for the nation; four numbers for the truth.

PGPC = Median per capita household consumption, survey-validated, published with distributional bands.

This is not a rejection of GDP. GDP remains indispensable for measuring output, fiscal capacity, and macro-stability. BUT insisting the foundation be true, and we must insist on “People First. Aggregates Later.” in economic measurement. A metric that cannot distinguish between a billionaire’s refinery and a farmer’s food plate is not a welfare metric.

VII. Anticipating the Objections — Honestly

Intellectual honesty demands that we acknowledge three counterarguments, and answer them.

“Government spending does benefit citizens.” True — public health, education, and subsidised food are real welfare. That is precisely why PGPC should be published alongside a “public services dividend” per capita, not silently blended into a fictional average. HCES 2023-24 itself now publishes imputed values of free welfare transfers (adding roughly ₹125/month rural and ₹82/month urban to MPCE) — a model for transparent, separate accounting.

“Corporate investment creates tomorrow’s jobs.” Also true — which is why GDP should continue to be published. But tomorrow’s jobs are not today’s income, and a welfare metric must measure the present tense of the citizen’s life.

“Isn’t this just median income, which economists already track?” Partially — but no government headlines it, no budget is judged by it, and no election is fought on it. The reform proposed here is not merely statistical; it is institutional: making the citizen-anchored number the primary, headline, budget-referenced measure of national progress.

VIII. Why This Matters Now

Nations manage what they measure. If the headline metric is total output, policy will optimise for output – mega-projects, corporate concentration, capital deepening , even when household consumption stagnates. India’s own recent debate is instructive: GDP has grown at 6.5–7.5%, yet the survey-measured consumption of the median household grew far more modestly, and the gap between the top 5% and bottom 5% of consumers remains six-fold.

For India , on its march toward Viksit Bharat 2047 — the question is not whether we will be a US$ 37 to 73-trillion economy. We can, BUT we have to undo a lot of things. The fundamental question is, whether the People’s GDP per Capita , the ₹61,000-a-year number, not the ₹2.4-lakh number will have multiplied alongside it. A nation is not developed when its arithmetic is developed. A nation is developed when its median household is.

Let us stop dividing the nation’s wealth by the people’s headcount, and start measuring the people’s income by the people’s consumption. That is the real GDP. That is the People’s GDP.

INDIA MAY BE CHASING THE WRONG NUMBERS

As the architect of the Viksit Bharat Abhiyan, I increasingly feel that our biggest challenge is not merely the lack of growth. It is that we may be measuring the wrong things, celebrating the wrong indicators, and therefore designing policies for the wrong outcomes.

THE MIDDLE CLASS IS SMALLER THAN WE THINK

In my book, Tough Choices and Hard Decisions: Making India a Developed Country in the Next 25 Years, written in 2020, I attempted to calculate the real size of India’s middle class. The conclusion was uncomfortable. India had, at best, around 20 crore people who could genuinely be considered middle class.

CAN 20 CRORE PEOPLE CARRY 125 CRORE OTHERS?

This is the question we must confront honestly. How can a middle class of around 20 crore people sustainably carry the economic burden of uplifting more than 125 crore citizens? No economy can build lasting prosperity if the productive and consuming middle remains too narrow.

THIS EXPLAINS MORE THAN WE REALISE

Why does India still struggle with purchasing power despite being one of the world’s largest economies? Why do many global companies remain cautious about the depth of the Indian consumer market? Why do successful Indian companies increasingly look overseas for their next phase of growth? Why does high GDP growth not always translate into prosperity visible in ordinary households?

Many of these answers lie in one uncomfortable reality: our middle class is simply not large enough.

GDP ALONE WILL NOT MAKE INDIA DEVELOPED

Perhaps we are looking too much at the size of the economy when we should also be looking at the size, strength and spending power of the middle class. India cannot become a developed country simply by making the rich richer or by indefinitely subsidising the poor. The real transformation will happen when hundreds of millions of Indians move decisively into a prosperous, secure and aspirational middle class.

THE METRIC WE SHOULD BE TRACKING

Not just GDP. Not just per-capita income. Not just the number of people lifted above an artificially defined poverty line.

The real question should be: How many Indians are genuinely becoming middle class every year?

A strong middle class creates consumption, entrepreneurship, tax revenues, better education, better healthcare, social stability and a more resilient economy.

WHAT WENT WRONG — AND HOW DO WE COURSE-CORRECT?

My book is now available for free download at www.viksitbharat.org. The data and arguments in it raise questions India urgently needs to confront. What went wrong? Are we measuring the right outcomes? And how do we course-correct before a crucial decade passes?

If our measurements are flawed, our policies will be flawed. And if we keep chasing the wrong numbers, we should not be surprised when we arrive at the wrong destination.

THE REAL VIKSIT BHARAT MISSION

Perhaps the most important economic mission for Viksit Bharat is simple:

Build the world’s largest, strongest and most prosperous middle class.

To achieve Viksit Bharat, we must work hard, set the right goals, and have the courage to implement bold ideas. But the starting point is to measure where we truly stand, and real GDP per capita is the most important measures of that reality.

Sources

1.       IMF, World Economic Outlook, April 2026 — India nominal GDP (~US$4.15 trillion) and GDP per capita (~US$2,813, 2026); Saudi Arabia GDP per capita projections.

2.       Ministry of Statistics and Programme Implementation (MoSPI), Government of India — National Accounts Statistics, FY2024-25: GDP by expenditure component (PFCE 56.3%; GFCE 9.3%; GFCF 33.5%).

3.       MoSPI, Household Consumption Expenditure Survey (HCES) 2023-24, Factsheet & Press Note, December 2024 — MPCE ₹4,122 (rural), ₹6,996 (urban); bottom-5% rural MPCE ₹1,677; top-5% rural MPCE ₹10,137; consumption Gini 0.237 (rural) / 0.284 (urban).

4.       Bharti, Chancel, Piketty & Somanchi, Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj, World Inequality Lab Working Paper 2024/09 — top 1% income share 22.6%; top 1% wealth share 40.1% (2022-23).

5.       World Inequality Lab, World Inequality Report 2026 — India top 10% income share ~58%; bottom 50% income share ~15%; top 10% wealth share ~65%.

6.       World Bank, World Development Indicators — Saudi Arabia GDP per capita (US$24,917, 2024) and GDP per capita PPP (US$62,677, 2024); India GDP per capita series.

Note: Figures in Layers 1–2 of the deduction ladder are illustrative arithmetic applied to official component shares; USD conversions use approximate FY2025-26 exchange rates. HCES figures pertain to survey year 2023-24.

#viksitbharat #economy #gdp #gdppercapita #IndianEconomy #India #bharat #rajendrapratapgupta

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India at Inflection Point for Viksit Bharat


As we get closer to entering 2025, we need to take a step back , reflect and then plan ahead. Let’s look at some data points to chart our future course.

Between 2014 and 2024, India’s national debt has experienced a significant increase. In 2014, the total debt of the Government of India was approximately ₹55.87 lakh crore. By the end of the 2024-2025 fiscal year, this figure is estimated to reach ₹181.68 lakh crore, indicating a more than threefold rise over the decade and despite this high rise in debt, the growth is still hovering around 3% if we consider inflation.

We should also consider the alarming the debt-to-GDP ratio. In 2014, India’s government debt was about 23.9% of GDP. By 2023, this ratio had increased to approximately 81.59%. 

As of the 2024-25 fiscal year, India’s total public debt is projected to be ₹181.68 lakh crore, an increase from ₹168.72 lakh crore in 2023-24. 

At the state level, debt burdens vary significantly, often measured as a percentage of the state’s Gross State Domestic Product (GSDP).

Here is a summary of the debt-to-GSDP ratios for various states based on 2024-25 budget estimates:

StateDebt-to-GSDP Ratio (%)Fiscal Deficit (%)
Punjab44.13.8
Himachal Pradesh42.54.7
Arunachal Pradesh40.86.3
Nagaland38.63.0
Meghalaya37.93.8
West Bengal36.93.6
Rajasthan36.03.9
Bihar35.73.0
Manipur34.53.1
Tripura34.54.0
Kerala34.03.4
Sikkim34.05.4
Andhra Pradesh*33.33.8
Uttar Pradesh32.73.46
Madhya Pradesh32.04.1
Mizoram29.02.8
Telangana27.383.0
Jharkhand27.02.0
Tamil Nadu26.43.4
Haryana26.22.8
Chhattisgarh24.43.7
Uttarakhand24.22.4
Karnataka23.73.0
Assam23.473.5
Goa21.92.5
Maharashtra18.42.6
Gujarat15.31.9
Odisha13.63.5
Delhi3.940.7

*Data for Andhra Pradesh is for the 2023-24 fiscal year.

These figures indicate that states like Punjab, Himachal Pradesh, and Arunachal Pradesh have the highest debt-to-GSDP ratios, reflecting significant debt burdens relative to their economic output. 

The substantial rise in the debt over this period has been an expenditure on programs and projects which have not been able to lift India’s growth to double digits, and this will pose a major challenge in the coming years, and according to my analysis, 2025 would be a tough year. While debts continue to rise, growth continues to be a question mark. We seem to be failing to understand the real problems facing the nation, and more over, we are oblivious to the challenges appearing on the horizon.

Household Savings Continue to Decline

Over the past decade, India’s household savings rate has experienced a notable decline. In the fiscal year 2022-23, net household financial savings dropped to 5.3% of GDP, down from 7.3% in 2021-22, marking the lowest level in 47 years. 

Glaring to note:

  • Increased Household Debt: There has been a significant rise in household borrowing, with annual borrowings reaching 5.8% of GDP in 2022-23, the second-highest level since the 1970s. A substantial portion of this debt comprises non-mortgage loans, including those for consumption purposes such as credit cards and consumer durables. This is alarming for any LMIC!
  • Shift from Financial to Physical Assets: Households have been reallocating their savings from financial instruments to physical assets like real estate and gold. This shift has contributed to the decline in net financial savings, as investments in physical assets are less liquid and not readily available for productive investments in the economy. 
  • High Inflation Rates: Elevated inflation has eroded purchasing power, compelling households to dip into their savings to maintain consumption levels. The Consumer Price Index (CPI) averaged 6.7% in 2022-23, higher than the 10-year average of 5.4%, intensifying the pressure on household finances. 

This decline in household savings poses challenges for the Indian economy, including reduced funds available for investment, potential increases in borrowing costs, and heightened financial vulnerability among households.

HNIs continue to leave

Over the past decade, there has been a notable increase in the number of Indians renouncing their citizenship to settle abroad. According to government data, more than 1.6 million Indians have given up their citizenship since 2011. In 2022, a record 225,620 individuals renounced their Indian citizenship, marking the highest annual figure to date. This trend continued in 2023, with 216,219 Indians surrendering their citizenship. 

High-net-worth individuals (HNWIs) have been a significant segment of this emigrant population. In 2022, approximately 7,500 HNWIs left India, and an estimated 6,500 were projected to do so in 2023. The Henley Private Wealth Migration Report 2024 forecasts a net loss of 4,300 millionaires from India in 2024, indicating a sustained outflow of wealthy individuals. 

The primary destinations for Indian emigrants have been the United States, the United Kingdom, Canada, Australia, and the United Arab Emirates. Factors influencing this migration include the pursuit of better education and employment opportunities, favorable tax regimes, higher standards of living, and enhanced global mobility. For instance, in 2023, the UK reported that Indian nationals accounted for 253,000 non-European Union immigrants, making them the top non-EU nationality for immigration into the UK. 

In summary,over the past decade, there has been a significant increase in the number of Indians, including high-net-worth individuals, emigrating to countries like the United States, the United Kingdom, Canada, Australia, and the United Arab Emirates, driven by various factors such as better opportunities and living standards.

NPAs – Debt Waivers

Over the past decade, Indian banks have written off substantial amounts of non-performing assets (NPAs). Between the financial years 2014-15 and 2023-24, banks wrote off approximately ₹12.3 lakh crore in loans. Notably, public sector banks (PSBs) accounted for ₹6.5 lakh crore of these write-offs during the last five years (FY20-FY24). 

The State Bank of India (SBI), holding nearly 20% of the market share in India’s banking sector, led these write-offs with ₹2 lakh crore during this period, followed by Punjab National Bank (PNB) with ₹94,702 crore. The peak year for write-offs was FY19, with banks writing off ₹2.4 lakh crore.

Inflation continues to be high

Over the past decade, India’s inflation has exhibited variability, influenced by factors such as food prices, global economic conditions, and domestic demand. In 2014, the inflation rate was 6.6%, which decreased to 3.3% in 2017, reflecting effective monetary policies and favorable economic conditions. However, by 2020, inflation rose to 6.6%, driven by supply chain disruptions and increased food prices. In 2022, it further escalated to 6.7%, before slightly declining to 5.6% in 2023. 

A significant contributor to this inflationary trend has been the volatility in food prices, often exacerbated by erratic weather patterns affecting agricultural output. For instance, in July 2023, abnormal monsoon rainfall led to a sharp increase in food prices, notably tomatoes, causing inflation rates to spike. 

The real growth of India may be less than what we see as GDP Growth, as the data on which this is calculated is neither comprehensive not accurate, and the current growth rate is grossly inadequate for India’s sustenance and coming out of the Lower-middle-income country status.

Growth continues to be low

India’s average GDP growth rate over the past decade (2013–2023) has been approximately 5.5%–6.0% per year.

The above analysis presents an overview of the current situation in Bharat, and this is what we need to consider planning for Viksit Bharat.

In 2020, i wrote a detailed analysis about how to Make India a Developed Country in the next 25 years. We need a GDP growth between 13.3 – 16% to achieve the vision of Developed Country by 2047. This book has the Vision, Data and Plan for making India a developed country. This book was released by Dr. Mohan Bhagwat ji in August 2020. Listen to what he spoke about this book https://www.youtube.com/watch?v=ZIgVaN5VLjk&pp=ygUjTW9oYW4gYmhhZ3dhdCByYWplbmRyYSBwcmF0YXAgZ3VwdGE%3D

We stand at a critical juncture on our journey toward becoming a developed nation (Viksit Bharat) by 2047. We need grow at double digit to achieve a developed nation status by 2047 and we just have 22 years.

The current economic model needs a total transformation. We are creating a pathway for Viksit Bharat and will build upon the strategic framework we released in 2021 and 2022. We have so many opportunities to work upon, and I look forward to engaging with you on this important mission mode project.

It is our country, and we have to work together to reverse the situation. I look forward to working with you to fast-track India’s march into Viksit Bharat.

Wish you a great year ahead.

Dr. Rajendra Pratap Gupta, PhD

Founder

Viksit Bharat Abhiyan

http://www.viksitbharat.org

#viksitbharat #developedindia #India #bharat #2025 #HappyNewYear #RajendraPratapGupta #GDP #EconomicGrowth #IndianEconomy #Budget2025 #Indiain2050 #Indiaat100 #Indiain2047 #mohanbhagwat #rss #bjp #manifesto

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Economy post-COVID


Dear Prof. Gupta,


I finished reading your thought-provoking book ‘Tough Choices & Hard Decisions’ today. As usual, it is well written and easy read. It captures your passion for India’s growth and keeps the reader glued to the book. It has a mountain of data – I am amazed you could collect them in nine days and also finish the book.


You have suggested many innovative ideas worth considering. I read them with great interest especially your suggestions on bureaucracy. Many of them are worthy of serious debate by the persons concerned namely the Government and civil servants; and if the debate is constructive, concrete outcomes are possible.Surprisingly, you have left out the damage done by the political class to the general deterioration – maybe, it is too obvious to be discussed. The choice of bureaucratic leadership is generally based on the capability to say yes, rather than on delivery.
Please accept my congratulations on your fascinating book. I do hope that it will bring about some change, although I tend to be pessimistic, given my age.


With warm regards,

Former Home Secretary

Government of India


https://www.amazon.in/Tough-Choices-Hard-Decisions-Rebuilding-ebook/dp/B088DBZM5H/ref=sr_1_3?dchild=1&keywords=rajendra+pratap+gupta&qid=1593398972&sr=8-3

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If only people had acted on time!


For those who think why India lags, here is an example of how bureaucracy stifles implementation of critical projects and programs which can take India decades ahead in terms of being an innovator. Moreover, if India implemented at the pace of ideation, we would have been much better prepared for #COVID-19 #Coronavirus. Read this terse email I wrote to the Babus in North Block for sitting on the file for months. Also, despite follow up from the PMO, this project was never implemented. The total cost was Rs. 340 crore spread over three years. It was about setting up a 1500 seater doctor call center in 16- 22 languages across four zones. Imagine, had this been implemented along with NIN ( National Identification Number ) for all healthcare providers? India would have not only reduced people’s anxiety in times of #COVID but also provided timely interventions and advice, saving lives. Time to reform bureaucracy if we have to make India a world leader. I normally don’t share such communications in the public domain, but this was needed to expose who let India down. When India has all the capabilities, bureaucracy stifled it. Now we are grappling with the problem looking helter-skelter. Those who worked with me would know well that I give enough freedom and also support people who wish to deliver. But, those who find reasons for their laggardness, I am known to be blunt and ruthless to them. Such laggards let our Hon’ble Prime Minister down and kept India behind in terms of preparedness and growth. India does not have a dearth of money or ideas; it is the speed-breaker ( bureaucracy) that is taller than the Great Wall of China, stalling India’s march for development. Rest for you to decide.
Screen Shot 2017-06-14 at 10.26.14 AM
From: “Rajendra P. Gupta (Advisor to Union Health Minister )” <advisor.healthminister@gov.in>
Subject: Meeting on 3rd May, on the ‘Doctor on Call’ project. 
Date: 15 June 2017 at 10:24:45 AM IST
To: daves@, adcost@
Dear Mr.Dave & Mr.Wadhawan,
Good morning !
I read this news ( pic attached ) yesterday, and remembered our meeting at your office on 3rd May wherein we had discussed the proposal of the ‘Doctor on Call’ project ( D/o Expenditure’s OM No. 18(21)/PF.II/2016 dated 18th November, 2016 regarding thedraft SFC Memo for Doctor on Call (D.O.C) circulated by MoHFW vide OM of even number dated 04.10.2016) .  I wanted to write you in detail immediately after the meeting , but somehow , due to meetings and travels , i could not .The news and Pic in Hindustan Times yesterday re-kindled in me the need to write you.  But as they say, “its better late than never”. 
So firstly, i thank you both for giving us time to meet up with your good selves,  and to have a first hand experience of how things are handled in the Department of Expenditure  !  Here is what i have to express ( i am just putting our conversations on record without any addition ) ;
Mr. Rajiv Wadhawan mentioned that he had held the file for four months as he did not feel it appropriate for action . I think, it was no short of a criminal act to withhold the file for four months, and also Rajiv had the audacity to say this in the meeting .  May be, if our service was launched as per plan in Oct/ Nov 2016, the girl in the pic could have been saved ! 
What was discussed on 3rd May could have been done four months earlier !  I guess , you all acted after four months , and that too , as probably , the PMO pulled up information on the project ( if i am correct ,  this project was presented to the group of Secretaries and also to the Hon’ble PM by the new IAS trainee , who had worked on this project , and i was guiding this project all throughout within the Ministry ) . 
Now , coming to your queries Mr. Dave and my responses in the meeting :
Your First query : Health is a state subject , and so , you expressed, that we must leave it to the states to do it :
Let me tell you Mr. Dave,  that about 65+ percent of our 125 crore people stay in rural India and they have challenges in accessing quality healthcare . Also,  if my ministry keeps waiting for states to do it , it might happen in the next decade or may be not.  But , the poor people will die of the treatable illness like diarrhea , fever etc. like the one you see in the pic attached . With ‘Doctor on call’ project , we could have addressed many such cases if you had approved the file with the speed with which my ministry worked.  In three weeks from the ideation of the project, the file was with the Hon’ble Minister who approved it within minutes !!  I give the entire credit to the Hon’ble Health Minister & the team led by an extra-ordinary bureaucrat , Mr. K.B. Agarwal , Additional Secretary , MOHFW. 
Also, in this fight for centre and state subject , we forget that the money belongs to Indian government and is to be used to serve the people of India, whether we pay through centre or the states , it is the money of the Indian Government collected as taxes from the people of this country . Why should poor die because there are insensitive people like Mr. Wadhawan & superiors like your self ,  who have not bothered to check the status of pending files with your team mates ?  It is time we shed our inhibitions and do what is needed for this country as priority, and ‘health and well being’ is a high priority . Also , let us not forget ,today you are in the north block , if by chance you were staying in rural India and your child was suffering from diarrhea and with no medical advice available ! then , you would have realized the importance of this project, and your perspective would have changed and you would not have held the file for four months !!! 
Your second query ; People can die of the medicines prescribed on phone or advice given :
I must state that, this project has a pre-condition to deal with voice calls based on well defined standard treatment guidelines and protocols. Also, we are going to prescribe only OTC ( over the counter) medicines for common ailments , and no one dies of taking an OTC medicines ! Also, for serious cases , the helpline would refer the patient to the appropriate health facility 
Your third query : People in rural India are used to taking an injection for relief and visit quacks as they trust them 
I must say Mr.Dave , that you were bang on this one ! This is absolutely  correct . But do you know that this is a result of the decades of deficiency in our system ? Trust is built on a repetitive behavior based on practice and availability . So far, rural folks have had no access to qualified professionals and they got into the trap of quacks and it became a practice . If this ‘doctor on call’ can give them advice which provides relief , the word will spread based on positive experience , and we will be able to change the practices and behavior when we provide right guidance and relief to people .. So , whereas your statement is correct , but the statement if used as a justification for not approving the project , then it is terribly wrongly placed .
Also, studies have proven that 65-80 % of the time , people do not need to see a doctor face to face . But in absence of right information and preventive / primary care, people in rural and semi-urban areas rush to the district hospital . This not only leads to economic loss but also , floods the district hospitals and eat into the precious time of doctors, when actually people don’t need to see a doctor in most of the cases . It can be handled with such a service like ‘ Doctor on call’. When almost every family has an access to a cell phone and that was the precise reason why i initiated this project 
Please go through the pic i have attached here . It came in yesterday’s Hindustan Times . It pains to see a person is carrying the dead body of his niece who died of diarrhea ( which is a treatable illness, and this is the example i had given coincidently in our meeting ). I feel sorry for this family and for this little girl , who could have grown up and contributed to her family, country and this society, but sadly , she is no more ! 
I have heard umpteen times, that people sitting in the North Block are arrogant to the core and deal high handedly , as if other ministries are coming with a  begging bowl ! Yes, we do , but our intent is to make the lives of people better,  and we intend to use our positions to drive those changes that makes people of this nation  safer , healthier and productive . This is what our Hon’ble PM envisions .  But bureaucrats like you act as speed-breakers who hold files for months without any accountability . 
It is sad, that i had to invest my time in summing up our discussions but if i did not express my anguish, it would have remained pricking me for ever,   .. Apologies in advance if it was inappropriate . Lastly,  It is not an individual issue , it is a systemic problem. 
With best wishes
Rajendra Pratap Gupta

Continue reading “If only people had acted on time!” →

India needs to define its long-term strategy & pursue it


 

  • Despite the best efforts and pressures, USA has not been able to force or impress China to open its virtual world where America wants to dominate

  • On top of it, China’s US dollar reserves are nearing $3.5 trillion and its e-commerce market is now reaching $5 trillion

  • The US needs China to accept some of its terms to keep its head inside China, and China will do all in its ambit to avoid it

India walked out of the Regional Comprehensive Economic Partnership (RCEP) and is exploring a deal with the USA. Let’s go a little back in time. Over the past few months, we have seen bullying and strong posturing from the US about showing China the door, and China has retaliated back equally, giving the world an impression that both are equal for now and there is no fun in trying to bully each other.

For the world, we are made to believe, that the two nations are breaking their trade and going their own way. The arrest of Huawei executive, barring of Chinese companies from the US market, tariffs on Chinese goods—all point to the same direction. However, we need to see the facts underlying the tough posturing of China and the US. When we dig the facts, China seems to have an upper hand and appears a more matured nation with a stronger plan, built over half a century, whereas, USA has been issuing circumstantial threats with knee-jerk reactions.

US-China trade deal will go through; sandwiched between super powers, India must learn to plan, invest to protect its sovereignty

Let us see who depends on whom? Today, the world and the wars, both are driven by wealth (trade). We can see that from the history of wars in the past two decades. The nature and definition of war, warfare, and wealth are changing. Earlier, the wars happened for capturing geography, now it is for capturing and controlling the economy. Earlier, it used to be the land for which people fought, then it was oil, and now it is for the virtual world and its ecosystem (data is the new oil); and finally, we will fight for clean air, water and space.

The definition of wealth is also changing. Look at the BRF (belt and road initiative from China). It is not about controlling trade, it is about controlling trade routes and a new form of building another East India company!

So, why can’t US just rub off China and show it the door? The reasons are not just the current trade dependence, but also the future market for US products and services in China. US still does not have much to do in China’s virtual world, and it desperately needs access to grow the US economy which is floundering. Google, Facebook and Twitter don’t work in China. The Chinese tech gadget market is stronger than the US. Major US brands have been brought by China. Alibaba is another success story for US to worry.

Despite the best efforts and pressures, USA has not been able to force or impress China to open its virtual world, where America wants to dominate and make its next big bang and also to control the world virtually for trade and security reasons. At the top of it all, China’s US dollar reserve are nearing $3.5 trillion and its e-commerce market is now reaching $5 trillion. Besides, China has entered into a ‘controlled slow-down’ to boost its dependence on domestic consumption, and not be overly dependent on exports. This means China is well on its course, and this is a big worry for the USA. It needs to ‘force’ China to accept some of its terms to keep its head inside China, and China will do all in its ambit to avoid it. Despite hectic lobbying and other trade tactics, USA continues to fail in securing its foot in China’s web economy.

China, which used to be an imitator is now an innovator. This has been a big fundamental shift. Be it research or patents, China has left America behind and this is the real cause of worry. China has not only questioned America’s supremacy but also shown it the thumb, and it’s for real for those who have looked at the achievements in education, research and patents in China.

In 2000, the US President, Bill Clinton said, ‘In the new century, liberty will be spread by cellphone and the cable modem’. He was trying to influence and impress China to open its internet market to the USA. But all successive US Presidents have failed to achieve that goal. China has its own, and perhaps better versions of Google, Facebook and Twitter, which are homegrown giants. 5G tech is more advanced in China. All these give reasons to worry for the Global Big Brother, whose supremacy had been unquestioned after the collapse of the USSR. In fact, going by the pace of developments in China, I am of the opinion that we will move towards a new Cold War era between China and the USA, and China will emerge as a new leader post-that second Cold War.

India has lessons to learn, and we are in quite an opportune position. We are sandwiched between two superpowers and India has the wherewithal and the time during this Cold War period to emerge as the winner. But today, America has our ‘controls’. Today, it can shut our payment gateways, social media, tech transfer and we, as a nation, will come to a grinding halt! We know how independent India is after more than seven decades of getting freedom. China can cut off Active Pharmaceutical Ingredients (API) supplies and the death rate due to lack of essential medicines will go up multiple times. India has failed to invest in critical areas and become independent. India should develop its own ecosystem than falling back on shortcuts through international agreements, which puts the future of 1.3 billion at the mercy of two foreign expansionist powers which masquerade as Indian allies.

Given the compulsions with the US, the US-China trade deal will happen, and it has important lessons for India. India achieved freedom in 1947 but not independence! We have a long way to go, and we need to plan and invest for protecting our sovereignty

 

Prof.Rajendra Pratap Gupta @rajendragupta

Link to the original article

https://www.firstpost.com/business/us-china-trade-deal-will-go-through-sandwiched-between-super-powers-india-must-learn-to-plan-invest-to-protect-its-sovereignty-7656381.html

#China #uschinatariffs #tradewar #rcep #uschinatradewar #usa #trump #us #india #USINDIA

Your two minutes can make a big difference to education


Please fill in this survey , It will take less than 2 minutes to fill this important survey on education reforms .

Please do share, and request your friends to fill the same. 🙏. Much indebted for this favour

https://www.surveymonkey.com/r/reformsineducation

 

#futureofourkids #childrensfuture #education #reformsineducation #globaleducation #changethesystem

Economic Slowdown- A terrific opportunity for a radical change


Over the last few weeks, we have been reading about the economy slowing down with companies cutting production and piling up inventory and jobs being lost. Former RBI Governor Bimal Jalan called it a cyclical slowdown and said that it may take 1-2 years to get back to normal.

A few days ago, industry leaders called for Rs one lakh crore stimulus to revive the investment cycle. A few industrialists want an immediate GST cut to revive the auto sector demand while others want it to be implemented later, when BS VI fuel norms kick in.

Several economic indicators point towards a long-term slowdown, which is a result of the policies of the past decades. Finance Minister met the industry during the drafting of the BJP manifesto earlier this year, then again during the vote on account, then before the budget, and now again recently. Despite the unprecedented four meetings in the past six months, the result is the same – the slowdown is aggravating.

Also, we must realise that the sectoral stimulus is not going to solve the issue of the slowdown. It can be at best temporary, though I doubt, that easy money will help much. Our economic problem is akin to stiffness in the joints and economists and industrialists are suggesting giving it a pair of good sneakers to make it run. Well, we need to address the real issue.

Last year, I looked at various data sets. I realised that India was passing through a tough time due to poor policies of the past and so, the issues were basically structural. Now, cyclical issues have added to the problem. With our integration with the global trade, the global trade wars and protectionist policies as well as the impact of climate change have had their influence on the Indian economy. The enforcement agencies going overboard in India too has a dampening effect.

In my book, ‘Your Vote is not Enough’, I looked at all the options to revive the economy with a long-term perspective and the truth is that we don’t have many options on our table. Those who are asking for one lakh crore stimulus are just concerned about one or two sectors, but the money will go waste, if the issue is not addressed holistically and the root cause of the problem not addressed.

For sure it is Prime Minister Narendra Modi’s problem, but not his fault. The person who received the Bharat Ratna recently knows well that wrong and lopsided policies for decades created wealth, but only in a few hands, leading to growth sans jobs. The growth during the past regimes was ‘cyclical’, and so, the current economic slow-down is ‘structural’.

According to my multiple factor analysis, about 15 crores of the total 130+ crore population are middle class with discretionary spending capacity, and these numbers cannot boost demand that the country needs, no matter if we cut the repo rate or give a one lakh crore stimulus.

Also, if we don’t address the structural and cyclical issues soon in a comprehensive manner, ‘reality’ (of a slowdown) and ‘perception’ (things not going to improve), will lead to a ‘negative sentiment’ (people will post-pone investment/ spending decisions). This may happen by Diwali and the numbers will come down further. This does not bode well for the India story as investors will then move in the reverse gear. Right now they have only halted.

So, what do we need to do? According to my analysis, with the critical opportunity being missed in the 2019 budget, we would need Rs 4 lakh crore investments annually till 2022 to re-start the economy and propel it to a high double-digit growth. In fact, massive investment in just the infra-sector would not yield the desired outcome

Most important is, how and where this investment goes. It certainly cannot be in the form of tax cuts. I have delved in my book on how money goes into district-level investments across sectors and if done in a planned manner, this can take our growth to above 12 per cent in the medium term (3-5 years) and also address the issue of creating 1.2 crore jobs a year.

In fact, this slowdown is a fantastic opportunity to re-look at the theoretical economic policies and create a new model of structural (not just cyclical) growth. India has the potential to grow between 12-16 per cent per year reviving critical sectors for a structural growth.

Also, by next year, we will have at least two manufacturing giants relocating their production base to India from China. India will get the much-needed boost in FDI investment. But the lethargic bureaucracy still remains a speed-breaker to leverage the massive opportunity emerging out of the trade war between the United States and China.

With Modi as Prime Minister, India has an able leader at the helm, who is both the face and force for India. I am quite optimistic that the slowdown will serve as an opportunity to not only jump start the economy, but also propel it to the next level of double-digit growth and turn India into a developed economy in the next two decades. The truth is, that It’s a 1991 moment for India, and, it cannot be business as usual. Can we change the reality, perception and the resultant sentiment? What we do in the next 60 days will tell.

(Prof. Rajendra Pratap Gupta is a leading public policy expert and author of the book ‘Your Vote is not Enough’ which focuses on economic revival and job creation. Views expressed are personal.) Follow on Twitter @rajendragupta 

Originally published in Outlook India https://www.outlookindia.com/website/story/business-news-economic-slowdown-is-an-opportunity-for-radical-change/338523

#India #economicslowdown #GDP #Autosales #autosector #recession #Indianeconomy #Globalslowdown #GDPgrowth

 

Your vote is not enough


Book cover

In this timely and comprehensive book, a professional with rare experience in policy making reminds us that merely casting our votes is never sufficient, we must be constantly involved with the decisions which affect us in our daily lives, and the country.

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