Raghuram Rajan stresses need for over seven percent growth rate for India’s development by 2047
Former Reserve Bank of India (RBI) governor Raghuram Rajan has asserted that India must achieve an annual growth rate exceeding seven percent to realize its ambition of becoming a developed country by 2047. Speaking at the launch of his co-authored book, ‘Breaking the Mould: Reimagining India’s Economic Future,’ in Kolkata, Rajan highlighted the significance of sustained growth for India’s economic transformation.
Rajan, along with economist Rohit Lamba, outlined the projection that at a growth rate of seven percent, India’s per capita income would surge from the current $2,400 to $10,000 by 2047, placing the nation in the low middle-income bracket. To achieve this, he underscored the crucial roles of education and healthcare, emphasizing that India has maintained an impressive average growth rate of six percent over the past 25 years.
The former RBI governor emphasized the need for comprehensive governance reforms alongside a dedicated focus on education and healthcare to lay a robust foundation for sustained growth. Rajan stressed the urgency of determining the trajectory for India’s growth, particularly as the demographic dividend the country presently enjoys is anticipated to diminish post-2050.
Addressing the audience, Rajan called for a balanced approach to growth, highlighting the necessity of ensuring that consumption growth benefits all sections of society, not just the upper income levels. Both Rajan and Lamba emphasized the importance of India’s focus on producing high-value products and investing in research to support entrepreneurs in capturing the high-end of the value creation spectrum.
Rajan had previously warned that if India’s potential growth rate remains at six percent annually without an increase in population by 2047, the country would still be classified as a lower-middle-income economy. He emphasized the risk of dealing with an aging population if India does not achieve faster economic growth.