India Can Become A Developed Nation By 2047 With 7.6% Growth, Says Arvind Panagariya

India can achieve its goal of becoming a developed nation by 2047, with sustained growth of 7.6%, said Arvind Panagariya, chairperson of Finance Commission, pointing to reports projecting an 8% GDP growth for 2024-25.

Panagariya highlighted that Prime Minister Narendra Modi had inherited a very fragile economy from the preceding Congress-led United Progressive Alliance government. "While progress has been made to a 'Viksit Bharat', more must be done," he told NDTV editor-in-chief Sanjay Pugalia in an exclusive interview on Friday.

Panagariya also flagged other "fragilities" in the economic and administrative system inherited by Modi, such as environmental clearances for infra projects "in a way hardly any projects were progressing".

"So, those bottlenecks had to be cleared up and then the PM proceeded to deal with more difficult reforms," he said, pointing to abolition of red tape, GST, and the bankruptcy code.

Attention must also be paid to other infrastructure needs, such as railways and civil aviation and, most importantly, that related to digital payments, Panagariya said.

Despite these challenges, he is confident 'Viksit Bharat' is an achievable dream.

For the last 20 years, if you take 2003-4 to 2022-23, India's GDP growth rate in terms of (current) dollars is 10.2%, Panagariya noted. "People do not realise, that in dollar terms we have grown very rapidly."

"Indeed, even if I take out the GDP deflator for that—which is the US GDP deflator, because we are talking in terms of dollars—India's GDP growth rate in real dollars ends up being 7.9% for this period," he said.

On One Nation, One Elections, Panagariya said that when elections happen repeatedly, it also impacts the government's ability to introduce reforms.

"The current situation actually provides, a good example that May 2024 we had the parliamentary elections and since then we have been having one or another election every six months and that obviously denies the government the ability to bring in major reforms, because they then become the bone of contentions during the elections," he said.

"When these repeated elections happen, they really impact the ability, governance and that has far-reaching implications for economic growth," he said.

If One Nation, One Election actually takes place, the reforms will move faster, Panagariya said.