New York: India has to generate 8 million jobs per year at least for the next 10-12 years and raise the share of manufacturing in GDP as it strives to achieve the vision of becoming a developed country by 2047, Chief Economic Advisor to the Government of India V Anantha Nageswaran said.
“We have a vision to achieve a developed India by 2047. The biggest challenge, apart from India’s size, is that the external environment is not going to be so benign for the next 10-20 years as one might have had in the last 30 years, starting from 1990 or so,” Nageswaran said here Saturday.
“But within this context – that’s a given, you can’t choose your external environment beyond a point – we have to generate 8 million jobs per year at least for the next 10 to 12 years…And raise the manufacturing share of GDP, in the context of China having achieved such a tremendous manufacturing dominance, especially post-COVID,” he said.
Nageswaran said India faces unique developmental hurdles that current developed economies did not, especially with the rise of artificial intelligence and automation.
“Artificial intelligence, technology, and robotics are challenges that some of the developed countries of today do not have to face in their developmental journey,” he said. “But India, with its size, has to navigate this huge, complex challenge, and there are no easy answers. If you look at the number of jobs we need to create, it’s about 8 million jobs a year. And Artificial Intelligence may have a big role in taking away entry-level jobs, or low IT-enabled services jobs may come under threat,” he warned.
Nageswaran also highlighted the importance of policy decisions in managing this technological disruption.
“It is one thing to prepare the population for a world dominated by AI, but it is another thing to ensure that we find the right balance between labour-centric policies and technology, because technology at the end of the day is not just a choice to be made by technologists. It has to be made by public policymakers,” he said.
As part of the ‘Viksit Bharat’ 2047 vision, Nageswaran emphasised the need to strengthen manufacturing and integrate Indian businesses with global value chains, alongside building a robust small and medium enterprise (SME) sector.
“Countries that became manufacturing powerhouses did not do so without having a viable small and medium enterprise sector,” he said.
He further noted that India must either boost investment rates or extract more value from current investments, especially in light of ongoing geopolitical tensions that are impacting global capital flows.
“It is not that external trade is not going to matter. It will matter and we need to focus on that because external competitiveness is also a way to boost domestic innovation, domestic potential growth,” Nageswaran said.
However, he warned that India cannot rely on exports to fuel growth in the same way as it did in the early 2000s.
“Every year, exports contributed 40% to GDP growth in the first decade, especially pre-crisis. In the second decade, that contribution came down to 20%, and in the third decade it might be even lower,” he said.
Nageswaran underlined the need to improve quality, invest in R&D, and upgrade logistics and last-mile connectivity to enhance export competitiveness.
“It has to be the driving force. One has to get up one’s game on quality, R&D, and internally on logistics and last-mile connectivity. But from a policy perspective, it will make sense to assume that it will not be so easily possible to extract growth out of exports as we used to do before,” he noted.
He added that while India’s post-COVID economic performance has been strong, with GDP growth averaging over 8 percent in the last three years, sustaining such high growth will be difficult.
“Obviously, in the current environment, sustaining an 8% growth rate is going to be a very tall order. But if we can maintain growth rates of even 6.5 per cent on a sustainable basis over the next decade or two and look to opportunistically increase it to over 7 per cent by focusing on domestic deregulation, that will be the way to go,” he said.
Last week, the United Nations Conference on Trade and Development (UNCTAD) projected India’s growth at 6.5 percent in 2025, driven by strong public spending and ongoing monetary easing, even as global economic prospects dim amid rising trade tensions and geopolitical uncertainties.
“The task ahead for India is quite immense in a difficult and challenging global environment,” Nageswaran concluded, “but I think the policy determination and identification of priorities, as we have done with emphasis on deregulation, can enable us to maintain the growth advantage even in this difficult environment.”
