Framing India's 2047 goals

Basic policy failures are partly due to distorted incentives related to the way India's democracy functions. But the distortions can be reduced by careful decentralisation of govt

- NIRVIKAR SINGH

THE ANNUAL INDIA Policy Forum (IPF), which recently concluded, brought together academics and policymakers from India and elsewhere. The conference is hosted by the National Council for Applied Economic Research (NCAER) and co-sponsored by the World Bank and NITI Aayog. Implicitly and explicitly, the government's goal of transforming India into a developed nation by its centenary of independence, namely 2047, framed much of the discussion. What follows are my own impressions and opinions, rather than a literal account of any individual analysis or presentation.

One striking feature of the conference was the power of an ambitious target to frame people's thinking. Importantly, 2047 is far enough away to allow for hope, though extrapolation of the recent past and the current situation does not necessarily suggest that the goal is achievable. On the other hand, the goal leads to analysis of why India may fall short. Clearly, India has to accelerate its growth rate, and ultimately, the question is how to do so. If anything leapt out for me from the discussions, it was the need for India to have more firms that grow rapidly. Most firms in India stagnate. Only the top 5% grow at rates comparable to developed countries. Of course, stressing the importance of firms that grow (and must be productive to do so) is just restating what development is, but it shifts the focus to an aspect of the economy that is often neglected in India, for complex reasons.