By removing frictions exposed by the Covid-19 crisis and using this ‘transformative’ moment to fast-track key activities over the next three years, India can reach its ‘full potential’ growth rate of 9%, consultancy firm PwC India said in a report.
“If we can increase our average growth rate to 9% from the pre-Covid-19 five-year average of 6.8%, and by deepening and widening our economy make the growth more inclusive, we can create three additional Indias with a cumulative additional GDP of $10 trillion, in a decade post-recovery,” according PwC’s ‘Full Potential Revival & Growth – Charting India’s medium term journey’ report.
The report is based on interviews with business, public sector and citizen leaders, sectoral analysis, and a country-wide survey. It concludes that over a three-year time frame by removing frictions that have been highlighted, and through joint action, a fast revival and subsequent higher growth can take place.
The report analyses nine key sectors that make up 75% of our pre-pandemic GDP and MSME segment. It said investing in physical infrastructure, in the semi-urban and rural centres, will give an immediate targeted boost to the economy and create widespread employment. Activating the over `100-lakh-crore spending earmarked under the National Infrastructure Pipeline is critical for building infrastructure in the next five years.
Digital support can engage more people, make connections to markets, and make supply chains and finance more effective. The focus should be more on improving digital infrastructure, not merely in metropolitan and urban centres where internet penetration is well developed, but also in smaller towns and districts, the report noted.
Improved healthcare and pharmaceuticals will likely have their own ‘Y2K’ moment, it said. The Indian IT industry benefitted from the threat posed to computers by the 2000 date change. Indian pharma companies that are already supplying generics to a significant portion of the global population can leverage key shifts resulting from the pandemic to upgrade, become self-reliant and support both an Indian and a global health revival process.
MSMEs ecosystem creation will be vital for employment in the revival and growth phase given their employment-generating potential, it added.
“As we reconstruct our economy, it is imperative that we remove frictions that have hampered growth historically. While each sector must grow on its own, increasing flow of data and convergence between sectors and across institutions will be key,” said Shashank Tripathi, government strategy, PwC India.