In its recent economic outlook of India’s economy the World Bank has expressed its satisfaction and projected high economic growth in the near future. No doubt it has been a matter of satisfaction, particularly, to the ruling government. A few days ago Subhas Chandra Garg, IAS, Secretary, Department of Economic Affairs, Government of India, mentioned that at present, a lot of industries are having excess capacity. Output gaps are closing in steel & cement, making investment more profitable. The NPA problem of the banks is also a thing of the past. Therefore unless excess capacity is not lowered new investment is hard to come. But according to him there are some industries where capacity utilization is as high as 80-85%.
India would be $ 10 trillion economy by 2030, said Garg. At present, Indian economy is $ 2 trillion. This is USD 12 trillion China. The biggest economy is the US, which accounts for US 18 trillion per year. The world economy is growing at 3.9%, currently at $ 82 trillion, with Chinese economy stationed at 6% and Indian economy at 7%+. “China has contributed a lot to the global economy, now it is India’s turn,” he said.
Garg said that the Indian economy should be able to grow at 8–9%. Longer term confidence is increasing with steady macro economic parameters. The task ahead for the Govt. is to enhance the growth rate from 6% to 8%. Certain fundamental reforms had created the foundation for a much higher growth rate. Introduction of GST and IBC must have a very big economic implication. Garg felt that the huge digital economy with the growth of start-ups would be an enabler of growth.
Another sector was energy, which Garg pointed out as a special case. The mandate of generation of 175 GW of renewable energy by 2022 was very much achievable and that sector would change the ways of doing business. With generation becoming highly decentralized with power fed into grid that would transform the vehicular system. He categorically emphasized that there would be no petrol/diesel cars after 8–10 years.
In the case of GST there have been expectations that the tax burden would be less and the consumer will get the benefit of lower prices. At the same time the general price level would be lowered. But what have not all these been happening? Garg told BE that these are happening to an extent and more would happen in due course. On another query on poor human resource quality of the people in India, Garg replied to the reporter that currently opportunity of providing suitable jobs to our people is not satisfactory. As a result even our quality human resources are not employed in proper places. This is challenge in the coming days. In spite of all this, Garg was very optimistic about the future of the Indian economy.