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The 4-Point Plan to Accelerate India to a 10 Trillion Dollar Economy

Feb 12, 2019

Tanushree Banerjee, Editor, The 5 Minute Wrapup

How soon do you think India's GDP could touch US$ 10 trillion?

If you were the Prime Minister of India, what would you do to accelerate the GDP's race to 10 trillion dollars?

These are two questions I have been eagerly waiting to ask you ever since Budget 2019 was announced.

For the first time ever, India's fiscal planning went beyond taxes and referred to a plan to get India to a 10 trillion-dollar economy. I wondered if my readers thought the plan was plausible or would require some twists.

Well, I will eagerly await your replies.

Narayana Murthy, the doyen of India's IT industry and co-founder of Infosys, was asked these very questions in a recent interview.

His replies were so succinct and thought provoking that anyone who wishes to see India's GDP race to 10 trillion dollars, should take note of them.

In his trademark style, Mr. Murthy laid down the steps India must take to quadruple its GDP, as a 4-point plan.

Cultural Transformation

India's economic transformation may not be possible without a cultural transformation. Indian leaders, be it in the government or civil society, must strive to make honesty, hard work, discipline, courtesy, trust, and social justice deeply ingrained in their culture.

Most developed economies have adopted these cultural aspects in their everyday lives. Without these changes, it may not be possible for Indian government, bureaucrats, and corporates to achieve the targets that they have set out for a 10 trillion-dollar economy.

I completely agree with Mr. Murthy on this. A government with corrupt officers and companies with corporate governance loopholes can be the biggest leakages to economic growth.

Growth of Exports

Being the flagbearer of one of India's biggest export sectors, it is understandable that Mr. Murthy believes in sharp growth in export revenues. According to him, without it India cannot achieve the kind of success that Japan or China did.

However, given India's growing consumption demand and lesser dependence on imports in future, export revenues may not be critical.

Quality of Education

Mr. Murthy recounted how college graduates in India lack independent thinking and the ability to apply their technical knowledge. This is why the employability of even engineering graduates in India is extremely poor.

For India to truly capitalise on its demographic dividend, improving the quality of education and employability of educated youth, are non-negotiable.

Corporates looking to create jobs could, partner with government and private sector educational bodies to create the desired work force.

Aggressive Job Creation

The aggressiveness with which American bureaucrats approach Indian IT companies to create jobs seemed lacking to Mr. Murthy, amongst Indian politicians.

For India, given the limited ability of PSUs to create jobs, the focus should be on ensuring ease of business for private sector, especially startups. Availability of capital, quality workforce, and limited red tape could fuel the kind of job creation that India needs.

Now, for investors looking to buy stocks that will ride the GDP's accelerated growth to US$ 10 trillion, the focus must be on companies that are adapting to the social needs.

That means they should have a disciplined and honest work culture at the core. They should focus on building and hiring quality workforce. They must ensure their capacity expansion creates sufficient number of jobs.

I kept all these in mind while recommending the 7 Stocks that are Set to Benefit from Rebirth of India.

Chart of the Day

As you may already know, I call the transformation of Indian economy from a 2.9 trillion dollar to a 10 trillion-dollar economy, the Rebirth if India.

And one of the key elements of the Rebirth of India is financialisation.

India's financialisation and financial inclusion literally started with Jandhan.

On 28th August 2014, the Indian Prime Minister launched an ambitious financial inclusion programme called the Pradhan Mantri Jan-Dhan Yojana (PMJDY).

The aim of this programme was to bring 7.5 crore low-income households under the banking net. So far, the programme has already got around 34 crore accounts.

Nearly 34 Crore Accounts Opened Under Jandhan

More importantly, the Jandhan data shows, the balance in Jandhan accounts is set to touch Rs 90,000 crores!

Well, the Rebirth of India truly cannot be possible without millions of poor Indians having access to debit cards, loans, insurance, and even pension.

And Jandhan has opened up new avenues for them that didn't exist before.

Warm regards,

Tanushree Banerjee
Tanushree Banerjee (Research Analyst)
Editor, The 5 Minute WrapUp

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9 Responses to "The 4-Point Plan to Accelerate India to a 10 Trillion Dollar Economy"

S SREE RAMA MURTHY and M Narayana Charyulu

Apr 7, 2019

We are group of 1500 professionals working since 2006. Through a 6-stage plan targets to lead the country to a yearly earning of Rs.35 Trillion for about 15 crore rural families in 10 years starting from 2017. The 6 stages in phases harness the historical wealth of India in 5 years , build participation of people 7 years , set a reforms and reflation process in 8 th years , create a tax and debt free nation in 10 years, restore Rural India to its past glory with most modern facilities. The macro vision of Creating 30 lac rural startups, 5 crore rural employment opportunities and 63000 service centres across 29 States and 7 Ut's, This under Gramodaya Mission provide 80 services needed by every human being needed from birth to death. The services are grouped under 19 categories under 30 Corporate entities. The micro implementation process of 11 villages with 1500 to 2750 families under one service centre on Hub and Spoke model is in progress in 4 sates covering 2805 villages and 255 service centres .

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Madhav Mavalankar

Feb 13, 2019

1. Set up farmers cooperative societies for selling their produce to market directly.
2. Have three slabs of GST 4%, 8% and 12%
3. Any donation for education will be 75% deductible from taxable income, for individual and corporations. All CSR spends/donations to be deductible up to 5 % of income.
4. Reduce GST to 4% on real estate where stamp duty is paid.
5. Zero capital gain tax on long term capital gains on equity and MFs, sold after 24 months. Abolish div distribution tax
6. No IT for income up to 3 lakhs, then have slabs of 5%up to 5 lakhs, 15% up to 20 lakhs, 25% up to 35 lakhs, 35% above 50 lakhs
7. Reintroduce wealth tax and estate duty, above 10 to 15 crore.
8. Incentives for exports and, foreign exchange brought in.
9. Increase penalty on tax evasion or income non declaration.
10. Set up PPP projects for infra development.
11. privatise all GOVT HELD COMPANIES. Progressively 10 to 15 years
12. Increase allocation for MNREGA
13. Pension of 3000 to 6000 for all poor above 60, by DBT

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Vinod Parsawala

Feb 12, 2019

Implementing all India river connectivity project.It will maximize irrigation and help developing water ways.
Maximize use of natural resources and generate huge employment.Agricultural production will multiply and increase income of farmers.Also huge losses caused due to floods will be restricted.

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rajeev_aroray@yahoo.com

Feb 12, 2019

Narayan Murty is correct in pointing all this out - a lot of us know that these are major issues facing the country - this has been wishful thinking for a long time - the root of the problem is lack of leadership - this country can do without most of the current crop of politicians ...

Like (1)

Ajay kumar

Feb 12, 2019

You written in the mail 4 key
According to 1 factors According Cultural Transformation
Indian leaders, be it in the government or civil society, must strive to make honesty, hard work, discipline, courtesy, trust, and social justice deeply ingrained in their culture.These thing never ever do Indians . If we are doing these thing perfectly India will be called developed economy but still India called developing nation because of these thing where as china followed these thing that's why china moving forward.
According to Quality of Education
Actually Quality of Education should be provided by the Governments but India is quite different .In fact ,now in India quality education is provided by the private sectors so private peoples gave bribes to the governments .All countries followed one system but Indians followed different systems .For example in Finland education is provided by government ,indeed Indians are also going to Finland for education that is other thing .If we want see perfect nation ,government should perfect other wise we could not see the US and China kind of nations.
Finally Aggressive Job Creation
Again back to government policies ,in India government policies are useful for politicians not for country and common peoples, where as china has creates full jobs because of good infrastructure facilities and good tax exemptions .First India has no infrastructure facilities and no tax relief facilities , how India will create good jobs . China started infrastructure facilities in 1950 but India does not have much facilities still so if we will provide infrastructure facilities and tax rebates then defiantly India will crated jobs because of new companies establishing.
Thanks for giving chance to write

Like (1)

BISWANATH DEY

Feb 12, 2019

If first is the prerequisite, it is never going to happen. It is easier said than done

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Pravin V Morankar

Feb 12, 2019

I believe, Until and unless honesty is inculcates in every Indian citizen irrespective of gender, age ,post etc. Indian Economy can not accelerate towards targeted 10 Trillion Dollar.Every citizen should work and behave with integrity.
E.g. I work in Mumbai and every day travel in local train. I pay timely and regularly my income tax to government.I purchase First Class ticket for my comfort which is 4 times costlier than the regular ticket.But, still I am deprived of my comfort because there is no rigorous check from government to stop illegal travelers.
This situation compels me to think every day that where I am wrong?

Like (1)

D.S.Chatha

Feb 12, 2019

9970924012

Insia should follow S.Korean model about treating big corporate offenders.This will make India No.1 economy in the world.

Like (1)

kulendra kapinjal

Feb 12, 2019

1.Maximise return on your existing investment in education and social spending: link agri institutes to what farmers need in that region and make them responsible for outcome. Make technical research focused to solve India's problem priority issues: Let them jointly focus to create technologies and programmes to solve water, municipal waste, post harvest logistics and storage, healthcare and medicine, low cost transportation, etc. etc. Set target outcome and make ones responsible for specific outcomes
2. Make defence and agriculture the nuclei of our knowledge and export and from its investment, let us target to derive our development goals and engineering and technical skills and niche knowlegde- like Israel
3. Make secondary education job oriented and abolish so many educational institutions focused on humanities which are merely producing graduates of no outcome.
4. Create separate promotion board within each embassy and consul offices, which will be manned by private sector, for foreign export, supported by a more efficient exim bank

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