India needs to grow at eight percent to become a $52-55 trillion economy by 2047, with nominal growth averaging around 12-12.5 percent, said KV Subramanian, executive director, International Monetary Fund at the launch of his book India @100: Envisioning Tomorrow’s Economic Powerhouse, organised by FICCI on August 7.
The states need to place onus on factor markets reforms for the country to grow faster, Subramanian, who is also a former chief economic advisor of India, said at the event.
Arvind Panagariya, chairman of the 16th Finance Commission, called for an open economy and privatisation of public sector banks and greater participation from private sector.
"India missed the bus on manufacturing because we did not reform factor markets. A lot more work needs to be done in this regard," said Subramanian at the FICCI event.
Subramanian noted that industry and media needs to push states for further reforms.
On the other hand, Panagariya highlighted that India historically has invested more on capital but not on labour, which was and still remains the primary resource.
“India's abundant factor was labour, but we focused on heavy industries and machinery. We don't use our labour effectively at all,” Panagariya said.
If the bulk of labour doesn't get capital, they are not going to acquire skills, Panagariya pointed out.
Panagariya also noted that there was a need to focus on skilling by industry.
Subramanian noted that India has not had an economic model that caters its economic advantage.
On the issue of AI, he said that there was a need to avoid fearmongering, but the country cannot afford to be complacent either.
The author of the book India@100 also noted the need to invest in more resources for adaptation.
"I would invest more resources in adaptation. Global warming is here; vulnerability from natural events is there," Panagariya said, meanwhile.
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