India needs 7.3% annual growth to be a developed country by 2047: CSEP

Time of India

22-04-2025

India will require an
average annual growth rate
of 7.3% between 2024 and 2047 to realise the goal of emerging as a developed nation by the centenary of its independence, according to a paper by the Centre for Social and Economic Progress (CSEP).
This requires states to be the dominant partners in reforms now, unlike in recent decades when the country's growth story was shaped mainly by the central government initiatives, it reckons.
'This is because the next-generation of reforms must focus on factor markets such as land, labour, and capital, coupled with human capital like education and health, where States have a crucial role,' economists Shishir Gupta and Rishita Sachdeva have contended in the paper.
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Indian average per capita growth was 4.9% between 1994 and 2020, the paper said, indicating the enormity of the task at hand.
Of the nine identified growth attributes, six are in the state domain (crime, fiscal deficit, healthcare, transmission and distribution losses, labour reforms, and land policies), the paper says, highlighting their pivotal role in boosting national growth.
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The four crucial reforms driven by the Union government since the 1990s were de-licensing, opening up the economy to the world, de-reservation, and devaluation. These helped the
per capita GDP growth
to rise from an average of 3.1% between 1981 and 1994 to 4.9% in the next two-and-a-half decades.
India is estimated to have recorded a growth rate of 6.5% in FY25. The Economic Survey has projected growth to be in the 6.3-6.8% range in the next fiscal.
No uniform strategy
Given the heterogeneity among states, in terms of their per capita income, growth attributes and other aspects, a 'one-size-fits-all strategy' for them would be imprudent, the paper argues.
The paper focusses on states' performance on two critical aspects—their growth attributes and key economic centres (KECs).
It says Gujarat, Karnataka, Himachal Pradesh, Uttarakhand, and the combined Andhra Pradesh are strong on both the axes and need to work towards removing all potential obstacles to their key economic centres to become even more globally competitive, akin to Shanghai and Beijing.
Maharashtra, Tamil Nadu, and Punjab need to step up focus on further bolstering their KECs, which are growing at a slower pace than the double-digit expansion in Uttarakhand and Gujarat, it says.
Rajasthan, Bihar, Jharkhand, and Jammu & Kashmir could focus on improving their overall growth attributes. While Haryana and Uttar Pradesh are witnessing 'spill-over gains' from their proximity with Delhi, they would be better off improving their growth attributes, the paper suggests.