If Narendra Modi returns to power for the straight third term as prime minister after the general elections, Modinomics 3.0 will be all about global leadership, according to Jayant Sinha, chairperson of the Parliamentary Standing Committee on Finance.
Speaking at Moneycontrol's Policy Next summit, 'India's $10 trillion run', on January 18 from his Lok Sabha constituency of Hazaribagh, Sinha said that with India not far from becoming a $5-trillion economy, the time was ripe to step up the focus on the longer-term picture, which is reaching a GDP of $10 trillion.
"Modinomics 1.0 was really about strengthening the economy and preparing the economy. The second phase, Modinomics 2.0, which is now ending, is really the phase that is characterised by atmanirbharta and I think of it as resilience – building a resilient economy," Sinha said.
"And what's really exciting about Modinomics 3.0 and the run to $10 trillion is that the next phase coming up – and we are already seeing the foreshadowing of it – is going to be about leadership, particularly global leadership," he added.
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According to Sinha, who expects the Indian economy to grow by more than 7 percent in 2024, the pillars of Modinomics 3.0 would be digitisation, decarbonisation, inclusion, urbanisation, and innovation.
"There are new ways in which we can digitise other sectors like electric charging. So, continued digitisation of the economy is going to be a very major driver," the Parliamentarian said.
Resilience in an uncertain world
Sinha's comments come at a time when the economic conditions for the world remain uncertain, with the World Bank warning earlier this month in January that the global economic outlook is "dark" with growth expected to slow down for a third year in a row in 2024.
In this world, rife with geopolitical risks and volatile commodity prices, Sinha sees decarbonisation as a key policy as it would make India resilient to fossil fuel prices as well as climate change.
Sinha added that some geopolitical risks could be favourable for India because of the 'China+1' view. "As the world looks to build more resilient supply chains, India becomes a natural production platform for people. So, some of these geopolitical risks have both downside surprises but also upside surprises. So, as long as we are resilient, as long as we are flexible, and we have dynamic policymaking, we can actually take advantage of some of these geopolitical risks as well as climate change," he said.
Sinha also highlighted the population changes that were likely to take place in key economic powerhouses in the next 75 years to underline India's demographic dividend opportunity.
"By 2100, India's population is going to be 1.6 billion... China's population, on the other hand, is going to go down form 1.4 billion to 800 million… And that in the US is going to grow slowly," he said. "However, to take full advantage of this incredible demographic windfall that we're getting relative to the rest of the world, we absolutely have to invest massively… in our training."
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