Operationalising the trade route to growth

The Economic Survey, presented in Parliament on Friday, outlined clearly the growth challenges to India becoming a Viksit Bharat by 2047.

- V S KRISHNAN

It has clearly stated that to achieve this, the economy has to grow at 8 per cent per annum for the next 20 years. This is one and a half percentage points higher than the current trend rate of 6.5 per cent.

The macroeconomic challenge has also to draw lessons from international growth experience in the post-Second World War years. Historical experience shows that no country in the post-Second World War era has consistently grown at more than 7 per cent without clocking 15 per cent plus growth in exports.

It is quite clear that India's growth story cannot rely on domestic demand, which is a puny $500 billion as against the global market of $38 trillion. The role of trade policy is, therefore, central to India's growth story.

Exports of manufactured products in the labour-intensive sectors of textiles/apparel, leather and footwear, toys, and food processing products have to grow. Apart from boosting overall growth, it will create employment. The Budget takes a few steps in this direction.