India needs to push growth in medium and small scale industries and develop a few smart cities to raise its per-capita income by 60% in next five years. “The way to push growth is to lay emphasis on medium and small scale industries. develop few and select smart cities, encourage religious tourism as it is a low lying fruit, and encourage public-private partnership,” says Charan Singh, chief executive of EGROW Foundation.
“This is certainly feasible as it implies a growth rate of around 9% per annum,” chief executive of a Delhi based economic think tank, the foundation for economic growth and welfare, Mr Singh told FE online.
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According to the latest official data given by the government in parliament this August this year, the per capita income grew by average 5.85% between 2013-14 to 2016-17. To achieve this target, Indian economy needs to grow at a rate of 9% per annum.
Niti Ayog, India’s apex planning body for devising strategies to propel India on a higher growth path, has set out an ambitious target of increasing per-captia income from $1,900 to $3,000 by 2022-23.
Mr Singh said the government should focus on low lying fruits and encourage public-private partnerships.
India’s medium and small scale enterprises have a network of 30 million units and employ more than 70 million people. As per the official data, medium and small scale industries account for 45% output to the manufacturing sector and contribute 40% of the country’s export.
Given the importance of SME sector in job creation, the government has recently asked RBI to ensure availability of adequate credit to MSME sector through policy interventions.
While setting the target, Niti Ayog has also said: “It is also necessary to ensure that growth is inclusive, sustained, clean and formalized,” underscoring the need to devise a strategy that leads to creation of more jobs rather than concentrating wealth into the hands of few people.
The apex planning body has clarified that it’s a vision document recommending the policy action to achieve higher growth and the projections made by it were not a forecast.