Can India achieve a $ 5 trillion economy by 2024 ?
Prime Minister Modi believes India can

Lakshmana Venkat Kuchi *

Positive motivational speakers have always held that thinking big always has its advantages. So, if one aimed for the moon, as an American businessman and an advocate of positive mental attitude, William Clement Stone stated, one may miss the target, but one may hit a star.

Prime Minister Narendra Modi falls in this category of positive thinkers who believes in setting high and seemingly impossible targets. His latest articulation on the state of the economy in an interview to the Economic Times, a leading financial and business daily, in which he focused on the positive aspects of the Covid-hit economy and declared that $5 trillion economy by 2024 was eminently possible.

Detractors wasted no time in criticising the idea, especially given the steep estimated negative growth in the economy, as assessed by a plethora of global rating agencies and multilateral bodies, like the IMF, that indicate very tough times in the short term for the country.

The IMF had in its recent World Economic Outlook, October 2020, predicted that the Indian economy is expected to grow at minus 10.3 per cent in 2020, a sharper contraction compared to the global growth estimated at minus 4.4 per cent.

It will be a very difficult and slow ascent for India, the IMF believed based on a recovery it sees around the corner in next year. The beginning of a recovery, that is.

A section of Indian economists paint a much more pessimistic picture, given the all-round contract in economic activity, disruption in supply lines for domestic manufacturers, difficult foreign trade environment and depressed demand due to the collapse of demand in the economy, largely due to the pandemic effect. Now, the economy is re-starting and shows few flashes of revival in a few sectors.

It is going to be a long haul, but not impossible, Prime Minister Modi asserts as he takes full charge of the recovery process. Broadly, his positive thinking stems from his conversations with world business leaders, who bet big on India. He cites the five-fold rise in investment growth in India as an indicator of the shape of things to come.

Efforts to finetune policies and programmes to maximise investment and overhaul the archaic agricultural policies that will free the farming community like industries sector was unshackled in the New Economic Policy of 1991 that ushered in radical economic reforms in one stroke.

From the Government side, Prime Minister Modi says, efforts are to promote entrepreneurship, build a robust and vibrant start-up ecosystem that will further, improve investment conditions. He appears clear in his mind that the goal of $ 5 trillion economy will be achieved without any problem.

What he seems to base his forceful assertion is on his belief in his own track record and the power of the youth. If one aimed at the target as a dream with full commitment and drive, India will achieve the goal in four years.

Successively, every trillion dollars was added to the economy is a lesser number of years and this pace is what makes the Prime Minister sure of his target setting. All this is well, but the actual situation on the ground is somewhat different critics would aver. Agricultural reforms, labour reforms are all well but is the timing right question economists citing that there were other important aspects to be addressed right now than spark of farmers’ protests all across the Nation.

Already, non-BJP Governments are passing their own resolutions in Assemblies opposing the Agriculture Bills passed by the Parliament. Kickstarted by Punjab, the other non-BJP Governments like Rajasthan, Chhattisgarh are following suit with resolutions on agriculture, which is a State subject. For sure, this will spark a confrontation between the Centre and States that the Nation can ill-afford.

For the sake of the citizenry and the farming community, the ruling party and the Opposition should meet up halfway with each other and in a spirit of give and take to resolve the issue. For the present though the Nation is in an election mode, well, even if it is only an Assembly election in Bihar and a string of by-elections in Madhya Pradesh, the outcome of these will be crucial and could shape the National politics in the near and long term.

As far as the opinion polls and pre-election trends go, they indicate a good showing for the BJP. But a late surge by the challenger in Bihar has the potential to upset the BJP calculations, if the crowds that young leader, Tejaswi Yadav, son of jailed Laloo Prasad Yadav, end up voting for him.

But the Prime Minister is not the one who would let electioneering come in the way of his policy initiatives. Though he is the star campaigner and crowd puller and primary vote catcher of the Nitish Kumar led NDA Government in Bihar, Prime Minister Modi focuses on the key reforms initiated by his Government – agriculture and labour, that has been in the pipeline for several years.

He has bitten the bullet, as he only can – by plunging headlong into a reformist mode, without bothering about the political fallout. For his firm belief is that it would yield economic benefit for the country and enable the country to beat back Covid-19 and its negative impact.

But he is a realist enough to understand that the Centre alone could not do it – the States must also begin to show that they care, and they can. If States compete to attract foreign investment, which is quite possible given the global scenario in the light of developments relating to China and companies wanting to shift out of the Communist country, it will accelerate the development and growth in the country.

He might well succeed in nudging the States to do to this, given the fact that most of the States are ruled by his party. And the non-BJP States will have to do it for their survival. But then, we may still find the journey a much tougher one, as the task is that much more challenging.

In fact, it is the Covid-19 and its handling that has come under questioning. Would it have been possible to give some time for the Nation to prepare for a total lockdown ? This is a question that on hindsight appears to be very well justified. But at that time, in the assessment of the Government, if the draconian lockdown was not imposed, India would have paid a much bigger price in terms of spread and intensity of Coronavirus.

Despite huge numbers, India’s mortality rate due to Covid-19 is amongst the lowest in the world. To be fair to Prime Minister Modi, he is the first and only PM so far to face such a pandemic, about which no one knew anything. Slowly, the world is discovering about the disease and how to counter and contain it.

Luckily, in India, fewer deaths have been recorded and the recovery rate is a very healthy high in the 90s now. Let us hope this luck stays with India for longer and help the country’s economic revival too.