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Unrealistic to assume India will record sustained growth of 8%: Montek Singh Ahluwalia
Aug-18-2022

Expressing some cautiousness over the country’s growth, former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia has said it would be unrealistic to assume that India would record a sustained growth of 8 per cent, which is needed to become a ‘developed nation’ by 2047. He added India's annual per capita income is around $2,000 and it is unlikely that it would increase to $12,000 by 2047 to become a high-income country as per the World Bank's definition. According to him, those who think India's growth projections in the near future are 7 - 7.5 per cent should recognise that the country cannot maintain that pace for such a long time. He added that ‘so 6 per cent average economic growth rate (for India) is not unreasonable’.

He further said in the strong policy scenario, India's annual per capita income will be about $9,600 by 2047, and in the central scenario, the country would get to $7,500. Noting that those are significant improvements from the present level, he said ‘but I think we need to be a little realistic on what exactly can be achieved in this period, given the growth rates that are possible’. India, which is the world's sixth largest economy with a GDP of $2.7 trillion, is currently classified as a developing nation.

He said ‘now of course it is quite possible that somebody projects that India can grow at 8 per cent, then maybe the target would become feasible’, but added that he is not sure about these projections. India was classified as a 'third-world' country at the time of Independence from British rule in 1947. But over the past seven decades, its GDP has grown from just Rs 2.7 lakh crore to Rs 150 lakh crore. He also said climate change could be the biggest threat to growth and prosperity, especially for countries in the tropics and India could be one of the worst affected. He added the single most important thing India has to do is to de-carbonise the generation of power.

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