Monday, July 18, 2016

Narendra Modi's Dream - India: 20 Trillion Dollar Economy - Possible by 2035?

January 2015
Narendra Modi stated his dream and asked his countrymen "Can't we dream and achieve?"

$20 Trillion Indian Economy is the Dream.

I immediately analyzed the idea. I found enough support already from various authorities on economic development and came to the conclusion that it is a feasible dream. It is a vision. This blog post is created immediately to provide support to the vision by informing many Indians the opportunity to participate enthusiastically and share the prosperity by first creating it.


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Indian Economy Plans, Programmes and Results

1 June 2016
Key Takeouts From India’s GDP Numbers
http://swarajyamag.com/economy/dont-order-the-champagne-yet-key-takeouts-from-indias-gdp-numbers


27 September 2015

PM Narendra Modi told the audience of  Facebook Townhall meeting that his aim is making India's economy touch $20 trillion in ppp terms.  (PWC 2050 world forecast says that by 2030 India will reach 17.13 trillion dollars.)

http://timesofindia.indiatimes.com/tech/tech-news/India-a-heaven-for-investors-aim-to-make-it-20-trillion-economy-PM-Modi/articleshow/49130230.cms


11 May 2015

 $10 trillion economy by 2034


We need to boost R&D spending to 2.4% of GDP to achieve GDP growth of 9% p.a. for number of years and  become $10 trillion economy by 2034

India's economy would need to increase its research and development (R&D) spending from mere 0.8 per cent of gross domestic product (GDP) in 2013 to 2.4 per cent  similar to developed markets of Korea (3.8 per cent), US (2.7 per cent) and China (1.9 per cent)  to grow its GDP by 9 per cent per annum to become a $10 trillion economy over the next two decades. Minister of state for science & technology and earth sciences, Mr Y.S. Chowdary  stressed the point while inaugurating '3rd Innovation Summit-cum-Excellence Awards: Innovative India@2020,' organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) on 11th May 2015.

Read the PWC Report for the Event
https://www.pwc.in/assets/pdfs/publications/2015/innovation_driven_growth_in_india_final.pdf



Focus on innovation should not  be restricted to new technologies and products but also include innovative distribution and financing processes and business models according to the minister.

http://www.business-standard.com/article/news-cm/need-to-boost-r-d-spending-to-2-4-to-achieve-gdp-growth-of-9-p-a-to-become-10-trillion-economy-by-2034-science-technology-minister-115051200273_1.html




23 March 2015

Former IMF Deputy Managing Director John Lipsky  -  Exim Bank Commencement Day Celebration Lecture

"Viewed from a global perspective, India appears poised to enter a period of powerful progress that could carry widespread and profound benefits,"

This exciting period of "accelerated progress" could encompass many important social, economic and financial aspects. Investor expectations are favourable both because of promises of reforms and because of problems evident in other emerging markets.

"But this highly encouraging outcome can't be taken for granted. It will be realised only if opportunities are seized, including through a combination of reforms and new investment."

The biggest challenge is to improve productivity on a sustained basis. 

"The key challenge will be to boost productivity significantly, and on a sustained basis,"

See the Webcast of the lecture and listen to Dr. Lipsky favourable words on India's potential

http://24framesdigital.com/eximbank/webcast/230315/





1 March 2015

The Economic Times Newspaper carried this item on the front page in its coverage of Central Budget for India presented on 28 February by Finance Minister Arun Jaitley.

"PM Modi dreams of a $20-trillion economy. As the Budget revs up India and makes it competitive globally, the world is agog."


Important Sectors - Contribution in $20 trillion India GDP

Estimated by Narayana Rao  (based on a comparison with current GDP of USA)
Readers are requested to give their opinions through comments.

Government - Central, State and Local Government - 15% - $ 3 trillion

Agriculture and Mining  -   $1 trillion (difficult. USA only $500 billion)

Construction  -    $ 1 trillion

Manufacturing   25%  -  $ 5 trillion
Automobiles - $1 trillion
Air Planes
Chemicals
Defence Equipment
Electrical equipment
Electronic devices
Petroleum - Extraction and Refining
Pharmaceuticals
Power Production
Railway Equipment
Metal refining
Textiles   ($650 billion production planned for 2025)


Services 50% - $ 10 trillion

IT  - $1 trillion
Real Estate - Offices, Hotels, Resorts and Residential Houses - Renting and Leasing - $1.75 trillion
Banking, Mutual Funds and Insurance - $1.5 trillion
Health and Social Care -  $1.5 trillion
Wholesale and Retail Trade - $2.25 trillion
Media -  $0.75 trillion
Entertainment - $0.75 trillion
Education - $0.25 trillion
Transport - $0.25




(Tourism is 7.5% of economy presently.)


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The Dream of $20 Trillion GDP - Dream Declared by PM Modi

$20 Trillion GDP for India - The Dream - PM Narendra Modi


17 January  2015 - The Dream Was Read by Me and My Support Started




Prime Narendra Modi addressing ET Global Business Meet on 16 January 2015

                                 http://pib.nic.in/photo//2015/Jan/l2015011661248.jpg


During his address on 16 January 2015 in ET Global Business Meet, Prime Minister Narendra Modi stated his dream and asked his countrymen "Can't we dream and achieve?"

$20 Trillion GDP Indian Economy is the Dream.


$20 Trillion GDP India - Dream Feasible - Feasibility Analysis


What is required to achieve it?

Presently India is $2 Trillion economy. At 10% per annum growth rate, it will take 25 years to achieve that target in real terms. May be if we take it in nominal terms it may take 20 years as there will be inflation in USA also.

Is 10% growth rate for 25 years possible?

Yes, it is possible if savings rate is 40% and Incremental Capital Output Ratio (ICOR) is 4 on average. It means capital projects must be planned with efficiency. All projects must be subjected to efficiency audits. Industrial Engineering is one discipline with focus on efficiency. In India, the National Institute given responsibility for Industrial Engineering is NITIE situated at Mumbai. The institute must rise to the occasion. I am a professor in NITIE and do my bit to increase the knowledge of the discipline in all engineers and managers by maintaining a blog titled Industrial Engineering Knowledge Center.  In recent years, I am also taking interest in explaining the discipline through company based training programmes.

So two questions are important.

What is ICOR in India and how does it compare with China?

What is savings rate in India and how does it compare with China?



ICOR


ICOR was average 4 in China during the period 1995 to 2008. Then it went above 4 for three years.

In India ICOR was 5 during 1991 to 2000, 4.4 during 2001 to 2010, but it was 3,7 during 2004 to 2008.

We can see that India has achieved ICOR of less than 4 during some years. This gives us the confidence that motivated government administration - Cabinets, Parliament, Assemblies and Panchayats and government employees, public sector management and employees, and private sector management and employees can achieve ICOR of 4 or less. The vision is compelling for all and the emphasis on inclusion announced by Modi should motivate all. The focus is not on fattening the wealth of rich but that of financial unity and inclusion.




http://www.keepeek.com/Digital-Asset-Management/oecd/development/economic-outlook-for-southeast-asia-china-and-india-2014/incremental-capital-output-ratio-icor-in-emerging-asia-1995-2011_saeo-2014-graph93-en#page1

http://www.livemint.com/Money/LWBk77WUpnAs2mr3rIhF0K/Rising-ICOR-and-poor-growth.html

http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=603

Savings and Investment

India’s savings and investment peaked at 36.8% and 38.1% of GDP, respectively, in FY08. In FY13, the overall savings rate dropped to 30.1% of GDP and investment to 34.8% of GDP.
http://archive.financialexpress.com/news/budget-2014-indias-falling-savings-inflation-investments-and-returns/1226932

In China, the savings rate has gone up to 50% also. It seems possible that in India also Investment can be taken up to 40% GDP.


In both the important dimensions, India can reach the target and achieve 10 growth rate for a long period of time and achieve Modi's Dream.



I have circulated this article in social media and got some comments. I replied to some of them and elaborated my analysis.

24 January 2016


Today I cam across a lecture by S. Gurmurty. In December 2014 itself, he talked of $800 billion investment.
https://hinduway.wordpress.com/2014/12/25/greatness-of-the-indian-society-s-gurumurthy/

Narendra Modi's Dream - India: 20 Trillion Dollar Economy - Possible by 2035 through Involvement of All Indians


10% growth rate makes it possible. Innovation and efficiency are required. Government, Public Sector and Private Sector - all have to innovate and all have to improve efficiency.

10% growth was announced by the earlier government also. So it is possible. If the present government is more committed, more determined, and more driven by ideology to make India great and prosperous, 10% growth will be achieved and Modi's dream which will be the dream of all of us will come true. Rs.1,00,000 per month will be the per capital income in the country. Understand the potential and work for it. Believe in yourself first and achieve targets at your level first has to be the aim of many independent producers of goods and services. Remember Gandhi - Be the Change.

Modi's Dream for India - Let us make it Our Dream


Prime Minister Modi has an India Dream 
India is a World Top Team
India has Param Vaibhavam
Indians have great name and fame

Modi wrote a Gandhi Rhyme
There should be calm
Development is what Everybody should proclaim
Swachhata is the aim and health for all is main

20 trillion dollars in Maa Bharati's hands
Enough to fulfill every toiler's desires
Enough to nourish all Bharat residents
Every Indian has to come out and flex his muscles


The dream will be reality
Provided our polity
Nobility and levity
Work with unity

It is  Vivekananda's Dream
It is Gadhiji's Dream
Once again provided to us as Modi's Dream
Let us make it Our Dream

Mother, I am here
To fulfill your desire
I promise to deliver
Period of great grandeur 

Narayana Rao - 18.1.2015 at Thane 4.50 am


Comparison With US GDP


USA's GDP for 2013 17.078.3 trillion dollars.
http://nraousa.blogspot.in/2015/01/gdp-of-usa-2013.html



The Mechanism for Achieving $20 Trillion by 2035 - Increasing GDP 10 times for India

Passenger car industry can be the key industry. Plan to increase the car production 10 times from the present 30,00,000 to 30,000,000  ( from 30 lakhs to 3 crores or 3 million to 30 million)

Voices Supporting Modi's Dream


Estimate of $14 trillion GDP in a Book
See the Page of a Google Book
The End of American World Order
https://books.google.co.in/books?id=zVRxAwAAQBAJ




5 February 2015
Chetan Ahya in the Economic Times dated 5.2.2015 Page 18
Taken together, these important changes in the macro environment, when fully implemented, should have a lasting impact on boosting economic development in India, and will go some way in achieving the ambition of creating a $10-trillion economy by 2030.
http://blogs.economictimes.indiatimes.com/et-commentary/indias-path-to-a-10-trillion-economy/

1 Feb 2015
Indian Stock Market value will touch $10 trillion dollars - BSE Chief Ashish Chauhan
http://www.financialexpress.com/article/markets/indian-markets/indian-markets-can-get-10-trillion-size-with-right-approach-bse-chief-ashish-chauhan/37607/


22 Jan 2015
China has gone ahead. But India can catch up.  Indian Express
http://indianexpress.com/article/opinion/columns/paper-dragon/


24 November 2014
PWC Report on India - Future of India - Winning Leap
Scenario 3: The Winning Leap includes investment in both human and physical capital as per the previous two scenarios but also focuses on investment in R&D and innovation and envisions a 9.0% CAGR for GDP by 2034. This scenario forecasts the most aggressive growth and is the only scenario which will generate the 240 million new jobs India's growing demography needs. This is supported by a massive transformation in the investment outlook and productivity metrics in India, supported through significant investments (domestic and foreign) and research and development.
http://press.pwc.com/global/the-future-of-india/s/3de54e52-d24c-49b4-bd8d-7cc5705bd5e6

Development of R&D Important for $10 Trillion GDP
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Business world

Video - NDTV
http://profit.ndtv.com/videos/news/video-india-to-be-10-trillion-economy-by-2034-346133

February 2014
Finance Minister Chidambaram announced that India will be the third largest economy in the world by 2043. Can it be achieved by Modiji much before?
Policies to make India the third largest economy - Shri Chidambaram
http://guide-india.blogspot.in/2014/12/india-to-be-third-largest-economy-in.html



2010
A book written in 2009

India 2039: An Affluent Society in One Generation 

(Google eBook)

$20 trillion GDP for India mentioned in the book.

Harinder S Kohli, Anil Sood
SAGE Publications India, Jan 20, 2010 - 300 pages


This book paints a bold and inspiring scenario of India becoming an affluent society by 2039, that is, within a generation from now. It makes a persuasive case as to why such a scenario could be plausible. Even more importantly, the book very appropriately and frankly assess the many hurdles – political, social, policy and institutional – that the country must overcome to realize this vision and lift millions of Indians from relative poverty today to enjoy the fruits of a modern and inclusive affluent society within 30 years or so. Its agenda of inter-generational issues is central to India avoiding the middle income trap that so many other countries have fallen into. However, India can successfully tackle this trap only by addressing, and addressing urgently and head on, the various facets of governance highlighted in the book.

Features unique to this study
- unlike other vertical studies that treat a topic in depth but on its own, this book tries to connect the dots between the key issues that could decide the future of Indian society
- it has a longer 30-year perspective, with a corresponding emphasis on challenges that require long gestation to address
- it offers a projection not of what will be but of what India’s potential is.
Preview
https://books.google.co.in/books?id=jfyHAwAAQBAJ



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India - Vision $20 Trillion GDP - The Journey

Tifac is creating Technology Vision 2035 for India
http://www.indiatechvision2035.in/
http://www.tifac.org.in/index.php?option=com_content&view=article&id=835&Itemid=1402



Updates to the Blog Post - $20 Trillion GDP for India


Updated:  21 July 2016, 24 Jan 2016,  1 Nov 2015,  24 March 2015, 16 March 2015, 1 March 2015
Updated   27 Feb 2015, 18 Jan 2015

Started on  17 January  2015


1 comment:

  1. indias plan to grow gdp to 20 trillion - Important key word

    ReplyDelete