At the recent Leadership Dialogues series titled Realising India’s Economic Dividend: Distribution of Opportunity, Niranjan Hiranandani, Founder & Chairman of Hiranandani Group, stressed the immense potential of India, highlighting the need for policies that facilitate ease of doing business, assess the technical feasibility of projects, and create training opportunities for the workforce. Organized by Mint in partnership with JSA Advocates & Solicitors, the Mumbai chapter of this event addressed key challenges and opportunities in India’s growth story, particularly in manufacturing, financial innovation, infrastructure, and workforce upskilling.
India’s Economic Potential: Opportunities and Obstacles
India continues to grow at a robust pace, despite global challenges, according to the World Bank’s India Development Update. However, experts pointed out that while the country has set ambitious targets, such as becoming a $30 trillion economy by 2047 and achieving net-zero emissions by 2070, several issues still hinder progress. These include the fading opportunities of the China +1 strategy, an affordable housing crisis, high unemployment, and ineffective corporate dispute resolution mechanisms.
The panellists identified the hybrid growth model of services and manufacturing as a viable path forward for India. Inclusive growth, which incorporates rural regions more effectively into the economic framework, was also emphasized. Currently, agriculture accounts for only 17% of GDP while employing 65% of the workforce, indicating a significant imbalance. Shifting rural youth toward skilled employment in industries outside of agriculture could have transformative effects.
Skilling, Infrastructure, and Investment
The importance of skilling was echoed by Amit Kumar Sinha of Mahindra Lifespaces, who suggested expanding India’s JAM (Jan Dhan Yojana, Aadhaar, and mobile number) framework to include ‘S’ for skilling. This, he argued, would help skilled laborers find employment more efficiently and earn better wages. Additionally, improving infrastructure and reducing India’s logistics costs, which currently stand at 13-14% of GDP (compared to 8% in developed countries), was deemed crucial.
Infrastructure delays, as highlighted by Umesh Revankar of Shriram Finance, continue to be a major impediment. The protracted timeline of projects, such as the delayed Delhi-Mumbai freight corridor, diminishes their intended impact. Addressing this requires better planning, execution, and capital allocation.
India’s capital, while abundant, needs to be channelled wisely. Pension and insurance funds, valued at ₹40 trillion and ₹50 trillion respectively, could be leveraged for infrastructure development. Foreign Direct Investment (FDI) remains strong due to political stability, yet capital must extend beyond major cities to states like Uttar Pradesh, Bihar, and Odisha for grassroots development.
Corporate Dispute Resolution: A Bottleneck for Investors
One critical deterrent to foreign investment is India’s inefficient corporate dispute resolution system. Venkatesh Raman Prasad of JSA Advocates & Solicitors pointed out that the judiciary lacks the necessary expertise to handle complex economic cases swiftly, leading to delays and investor hesitancy. This is particularly evident in sectors like telecom, aviation, and infrastructure. Strengthening legal capacity and integrating technology could significantly improve this area.
India’s Path to Viksit Bharat
The consensus among the panellists was clear: India needs to increase its per capita income fivefold and GDP eight- to tenfold to achieve its goal of becoming a developed nation by 2047. A strategic focus on R&D and innovation, particularly in industries where India has untapped potential, such as solar energy and semiconductors, could drive future growth. This requires a mindset shift, as highlighted by Kapil Modi of Carlyle, towards viewing investments not just domestically but as global opportunities.
In conclusion, while India has significant growth potential, realising the vision of a Viksit Bharat will require addressing deep-rooted structural challenges, including improving infrastructure, creating an efficient dispute resolution system, skilling the workforce, and fostering innovation. With the right focus, India can capitalise on its demographic dividend and entrepreneurial spirit to drive sustained economic development.
