If India wants to be 'Viksit' by 2047...: Govt think-tank reveals which sector needs to contribute more to GDP

Economic Times

3 days ago

ANI Niti Aayog chief BVR Subrahmanyam
India's manufacturing sector needs to achieve a growth rate of 15 per cent annually to elevate its contribution to the GDP to at least 25 per cent by 2047, according to BVR Subrahmanyam, CEO of NITI Aayog.
Speaking at a Confederation of Indian Industry (CII) event, Subrahmanyam noted that manufacturing currently represents approximately 17 per cent of India's GDP. He said, "Manufacturing sector should be growing at 15 per cent at least. That's the only way to rise from its current share of 17 per cent to 25 per cent.'
With projections indicating that India's GDP could reach $30 trillion as it evolves into a developed nation by 2047, the manufacturing sector is expected to contribute $7.5 trillion. To reach this GDP target, Subrahmanyam emphasized the necessity of increasing the average annual GDP growth rate from around 6.5 per cent to 7.5 per cent. 'We must bump up our annual GDP by another 1 percentage point to 7.5 per cent,' he said.To achieve this growth, he highlighted the importance of several transformations, starting with urbanization. He pointed out that India's urbanization level is "very very low" at about 30 per cent, and it should exceed 50 per cent. "Many more cities and urban areas have to come up," he suggested. Additionally, he advocated for an increase in energy capacity and making these sources carbon neutral.
Subrahmanyam also noted a positive trend in India's manufacturing landscape, mentioning that the country is transitioning from being a net importer to a net exporter of mobile phones. The defence sector is another area where India is seeing success. However, he raised concerns about India's limited presence in the global value chain. He observed, "We have not managed to crack it...Look at China, systematically over the past 30 years, it has placed itself at the heart of global value chains. Some or the other parts come from China, and there is a critical dependence on China. Shouldn't we be at the heart of global value chain?"
He also addressed regional imbalances in manufacturing, and said, "There are five or six states in India accounting for 90 per cent of whatever is happening, be it domestic investment, manufacturing or foreign investment. What about the rest of India? We can't be on a two-speed track; everybody has to grow."In the context of this growth vision, Prime Minister Narendra Modi has urged states to develop their vision documents, leading to individual roadmaps that align with the 'Viksit Bharat' initiative. Subrahmanyam indicated that by the end of 2025, all states and Union Territories will have their vision documents and roadmaps for 2047. He concluded, "India is an aggregation of individual visions of small states. You cannot have a national vision where states work in different directions. 17 states have either complete or are on the verge of completion of their vision documents."
(With ANI inputs)