DNA Money Edit: Turning $4-billion dream into reality

India, which has retained the tag of fastest growing economy, is now targeting a big leap. An average annual economic growth of 8% in the next five years will make the country a $4 trillion (Rs 285 lakh crore) economy by 2022-23, up from $2.7 trillion (Rs 192 lakh crore) in 2017-18. 

Niti Aayog's new blueprint for growth, called 'Strategy for New India @75', suggests this growth rate could be achieved through a set of policy initiatives that aim higher export growth and investment rate and liberalisation of the foreign direct investment (FDI) rules. The nation's think-tank suggests that the investment rate should be raised from the present 29% of GDP to 36% by 2022-23, of which half must come from public investment.

The target is to provide every family with a house, water connection, toilet and 24x7 electricity supply, in five years, when the independent India turns 75. It also envisages increasing proportion of formally skilled labour from 5.4% of workforce to 15%. As vice chairman Rajiv Kumar indicated, Niti Aayog hopes to ensure reforms and other government initiatives reach the bottom of the pyramid.

Surely, achieving an 8%-plus growth on a sustained basis is a gigantic challenge for the country unless all sectors report a parallel growth. The government may need to put in place a comprehensive policy framework for raising the investment rate to 36%.