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A Vision of Viksit Bharat

Arvind Virmani's A Vision of Viksit Bharat outlines a roadmap for India's economic growth, emphasizing innovation, self-reliance, and global competitiveness. His vision focuses on structural reforms, digital transformation, and inclusive development to make India a developed nation by 2047. Know more here- https://www.ipa-india.org/wp-content/uploads/2024/12/Session-1_-Keynote-Address.pdf<br><br><br><br><br><br><br><br><br>

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A Vision of Viksit Bharat

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  1. Dr. Arvind Virmani (@dravirmani) Member, NITI Aayog

  2. Introduction  How are we positioned for the future?  Relative Per capita GDP & PcGdp growth  Employment, Poverty, Income distribution  Opportunity & challenge: Global  Demographic Changes: WAP  De-monopolization of manufactured exports  Services unbundling/fragmentation  Challenges & opportunities: Domestic  Quality of Basic education & skilling  Bureaucratic Socialism legacy  Digital, Phygital, Hybrid, Expert systems, AI  Projected outcomes: Growth, welfare 27thFebruary, 2025 Member(av) 2

  3. Where do we stand?  Growth rate  Employment & wages  Poverty  Social Indicators  Relative to our PCGDP (LMIC) 27thFebruary, 2025 Member(av) 3

  4. India: Accelerating growth 10.0 . India's Per capita GDP growth rate, relative to World and China 5.0 y = 0.034x + 1.897 0.0 1982 1983 1987 1988 1992 1997 2001 2002 2006 2007 2011 2012 2016 2017 2021 2022 1980 1981 1984 1985 1986 1989 1990 1991 1993 1994 1995 1996 1998 1999 2000 2003 2004 2005 2008 2009 2010 2013 2014 2015 2018 2019 2020 2023 R² = 0.2363 -5.0 -10.0 India-World India-china(base) Trend: Ind-Wrld Trend: Ind-Ch -15.0 27thFebruary, 2025 Member(av) 4

  5. Growth of Employment (man-days) & Real Wage rate (ASI) 27thFebruary, 2025 Member(av) 5

  6. Employment, Wages, Skills Employment & Wages AY18 to AY24 Worker Population Ratio (WPR, %) Average growth rate 60 Simple Compound WPR-US WPR-CWS Worker/Population Crnt Wkly Status:CWS Rural female Ususal Status: US Rural female Linear (WPR-US) Linear (WPR-CWS) 58 3.4% 11.7% 3.7% 12.2% Average AY18 to AY23 3.3% 11.2% 3.7% 11.9% 56 54 52 WPR Casual workers Self employed Regular employe Real wages Casual workers Self employed Regular wage worker 0.6% 5.1% 1.5% 0.6% 5.3% 1.5% 50 48 2.8% 0.6% -0.4% 2.8% 0.6% -0.4% 46 44 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 27thFebruary, 2025 Member(av) 6

  7. Poverty & distribution Poverty in India: Head Count ratio (HCR) 2011-12 2022-23 Change Tendulkar BBV(2019-20 In 2011–12 prices $1.9 PPP/day/person All India Rural Urban $3.2 PPP/day/person All India Rural Urban Gini Co-efficient Total Rural Urban Consumption: Top 5%/Bottom 5% Rural Urban Note: International poverty lines as defined in 2011-12 prices & exchange rate Source: Bhalla & Bhasin, Economic & political weekly, July 13, 2024, Vol LIX, No. 28. Calculations of GINI & top5%/bottom5% by author based on HECS 2011-12 & 2022-03 2017-18 prices $2.15 PPP 2.4% 2.7% 1.7% . 12.2% 12.6% 10.7% 2.3% 2.6% 1.4% -9.9% -10.0% -9.3% 2.2% 53.6% 59.7% 40.1% 21.8% 24.0% 15.6% -31.8% -35.7% -24.5% 23.3% 31.4 28.7 36.7 27.0 31.9 -1.7 -4.8 8.6 14.7 7.3 10.0 -1.3 -4.7 27thFebruary, 2025 Member(av) 7

  8. Opportunity, Weakness  Demographics  Basic Ed, Job skills: Quality of teaching/training  Technology, R&D & Innovation  Supply Chain De-risking  Economic risk (PRC manf Duopoly/monopoly)  Domestic security risk (3Cs)  National Security (High Tech, critical minerals)  E-services: Unbundling of Services  Skill for India, Skill for the World  Digital, Blended/Hybrid: Expert systems, AI 27thFebruary, 2025 Member(av) 8

  9. Demography & Comparative advantage Country share of World's 20-59 yr olds (WAP)  World share of Working Age Population (WAP)  Decline from 2020-2050 Change in share(%pt) Share of world WAP (%) . 1 High income countries (HICs) 2 USA 3 W Europe 4 UK 5 Japan 6 S Korea 7 Taiwan 8 Russia 9 Upper middle income countries 10 China -3.4 11 Thailand -0.1 12 Indonesia 0.3 13 Mexico 0.3 14 Lower Middle Income countries (LMICs) 15 Viet nam 0.2 16 India 2.9 2020-1990 2050-2020 1990 2020 2050 12.0 4.2 2.4 0.8 1.5 0.7 0.3 1.9 9.0 3.8 1.8 0.7 0.9 0.4 0.2 1.3 -1.0 -1.4 -0.3 -1.3 -0.2 -0.1 -1.2 -0.5 -0.6 -0.1 -0.6 -0.4 -0.1 -0.7 5.3 3.8 1.2 2.7 1.0 0.4 3.1  HICs: USA, EU, UK, Japan, S Korea, Taiwan; Russia  MICs: China, Thailand, Mexico, Indonesia; Viet Nam  Increase in India(18.6/19.0)  Comparative advantage 27.7 20.1 1.0 3.6 1.6 19.0 12.3 0.6 3.5 1.5 -7.8 -0.4 -0.2 -0.1 23.5 1.1 3.3 1.4  Low skill (~PRC’08); 2024-2030  Med/Semi-skilled (2031-45) -0.2 0.3 1.1 15.4 1.3 18.3 1.1 18.6  High skill intensive 2046+ 27thFebruary, 2025 Member(av) 9

  10. Manufactured Exports, VA Share in World Manf exports (%) Country Share of MVA (% world MVA) 21.5 35 China China USA Japan Germany 19.5 USA 30 Germany Korea, Rep. India 17.5 Japan Poly. (China) 25 15.5 13.5 20 11.5 15 MVA (%) 9.5 10 7.5 5 5.5 Years 3.5 0 2004 2000 2002 2006 2008 2012 2020 2018 2022 2010 2014 2016 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2000 2001 2002 2003 2004 2005 2006 2007 2008 27thFebruary, 2025 Member(av) 10

  11. Monopolization of Manf export China's Merchandise Exports, 2021 (% of World exports) Distribution: China's share of World exports Product China share 67.4% 67.4% 59.0% 57.7% 55.7% 55.4% 53.8% 48.5% 48.5% 48.4% 45.8% 44.0% 43.3% 42.7% 42.7% 42.1% 40.9% 40.8% 40.1% 39.9% 39.0% 25 Pottery Lighting fixtures & fittings, n.e.s. baby carriages, toys, games & sporting goods Household equipment of base metal, n.e.s. Prefabricated building, sanitary, heating and lighting fixtures, n.e.s. Fabrics, woven, of man-made fabrics Knitted or crocheted fabrics, n.e.s. Made-up articles, of texile materials, n.e.s. Trailers & semi-trailers Cotton fabrics, woven Cutlery Automatic data processing machines, n.e.s. Tulles, trimmings, lace, ribbons & other small wares Household type equipment, electrical or not, n.e.s. Medium-skill: Electronics (excluding parts and components) (SITC 775) Clothing accessories, of textile fabrics Women's clothing, of textile, knitted or croacheted Textile yarn and related products Optical instruments & apparatus, n.e.s. Telecommunication equipment, n.e.s. ; & parts, n.e.s. Telecommunication and sound recording apparatus 21.1 19.3 19.3 20 17.5 Relative frequency 15 10.5 10 8.8 5 3.5 0.0 0.0 0 0 to 15 >15-25 >25-30 >30-35 >35-40 >40-50 >50-60 >60-70 >70-100 Export share (% of world total) 27thFebruary, 2025 Member(av) 11

  12. Threat=> Opportunity=Challange  PRC: Socialist market Economy (SME)  ELISID growth model & sREAD technology system  Goal: Monopoly over all important Technologies, manufactured exports, critical materials  3C: Communication, computation & Control: ADP, Telecom, Optical  Military threat & defense supply chain  Industrial policy: Trusted, competitive Supply chains  Joint utilization of comparative advantage of India (manpower), USA(technology), EU+(demand) 27thFebruary, 2025 Member(av) 12

  13. Importance of MNEs/MNCs  MNC anchored supply chains: 60% to 2/3rdof trade  Majority head quartered in US, EU, UK, Japan  Competitive disadvantage(Vietnam, Bangladesh): 12.5%  Anchor investor invests in: Skills, quality, timeliness  Critical for exports & domestic value added in export  ROW : Near classic free trade + Atman Nirbharta w  Export as benchmark: global quality, competitiveness  Exporting firms profits & productivity > domestic  India Manf: 5thin VA, 15thin exports  PLI : Capital subsidy (MES) 27thFebruary, 2025 Member(av) 13

  14. Higher Education (% of pop 25+) Year PcGDP Expected Actual UMIC $12,800 $37,000 HIC India relative to countries at diff pcGdp ppp (2021 int $) School Enrollment Tertiary (% gross) 2023 Educational attainment, at least completed pop25+ yrs, (%) Bachelor's or equivalent 2023 Master's or equivalent 2023 Doctoral's or equivalent 2023 $9,160 34.0 33.1 40.7 61.7 $9,160 $9,160 $9,160 13.0 4.2 0.9 13.2 3.5 3.5 15.6 5.4 1.0 23.9 9.2 1.6 27thFebruary, 2025 Member(av) 14

  15. R&D Indicators Global Innovation Index 2024 GII Countries Rank Lower Middle Income Countries India 39 Viet Nam 44 Upper Middle Income Countries China 11 Thailand 41 Indonesia 54 Mexico 56 High Income Countries United States 3 United Kingdom 5 France 12 Japan 13 Count 133 Source: GII Database, WIPO, 2024 India relative to countries at diff pcGdp Year PcGDP Expected Actual UMIC HIC Input Output Sub-Index ppp (2021 int $) $12,800 $37,000 44 53 33 36 R&D expenditure (% of GDP) 2020 $7,400 0.4 0.6 0.7 1.3 23 41 54 73 7 39 67 52 Researchers in R&D (/Billion) 2020 $7,400 0.7 0.3 1.5 2.9 Patent applications, residents (/Million) 2021 $8,050 33.0 19.0 66.0 141 Firms that spend on R&D (% of firms) 2022 $8,545 19.2 4.3 19.9 21.7 4 5 3 10 14 Technicians in R&D (/Billion) 2018 $7,714 0.2 0.1 0.4 0.8 10 17 12 High-technology export (% of manf exprt) 2023 $9,160 8.3 14.9 10.2 16.0 Source: Authors calculation based on WDI, Dec 2024 27thFebruary, 2025 Member(av) 15

  16. Where do we want to be?  World Bank defn of UMIC & HIC equated to  PcGDPat PPP (in international $ at constant 2021 prices)  Goal: From LMIC($9,200 in 2023) to  UMIC ($13,000) by 2030, HIC ($36,800) by 2050  India: Base proj average GDP growth = 6.0%(2020-49)  (~7% 2020-29, ~6% 2030-39, ~5% 2040-49)  Other countries are based on IMF & OECD  For India this is taken as Pessimistic projection  Social Parameters/Indicators(eg Public Health)  Targets based on Global benchmarks 27thFebruary, 2025 Member(av) 16

  17. Projections: India/China PCGDP PPP in const 2021 int $: India/China (%) GDP PPP in const 2021 int $: India/China (%) 120 95 India(5.7)/chin a(2.8) 110 India(6.3)/china(2.5) 85 100 India(5.4)/chin a India(6)/china(2.5) 90 75 India(4.6)/chin a(2.8) India(5.2)/china(2.5) 80 65 70 60 55 50 45 40 30 35 2039 2039 2048 2033 2036 2033 2036 2030 2042 2045 2048 2030 2042 2045 2024 2024 2027 2027 2021 2021 2006 2000 2000 2006 2009 2009 2003 2003 2015 2015 2018 2018 2012 2012 27thFebruary, 2025 Member(av) 17

  18. Evolution of Economy(1990-2050)  Index of economic power Index of economic power (VIPe)  VIPerelative to USA(= 1)  China 0.69 => 0.99 (blue)  India 0.19 (2 => 0.95 (2050) – red line  EU (incl Germany, France): 0.84 to o.89 (green)  India is level with Japan (fawn) & Germany in 2023.  Will overtake them in crnt USD GDP within 3 years. 1.2 China India EU Japan 1.0 0.8 0.6 0.4 0.2 0.0 1994 1996 2002 2004 2006 2010 2012 2014 2018 2020 2022 2028 2030 2036 2038 2044 2046 2048 1990 1992 1998 2000 2008 2016 2024 2026 2032 2034 2040 2042 2050 27thFebruary, 2025 Member(av) 18

  19. Public Goods Infrastructure  Civic Infrastructure  Drinking water, garbage collection, sanitation, sewage  State Grids for collection, processing, recycling  Roads, footpaths, drainage, utility tunnels; street lights  Parks, lake/river fronts; grassed areas, public toilets  Monuments, iconic buildings/areas, culture centers  Air, water, land pollution abatement/elimination  Shopping, commercial centers, parking, toilets  Public Transport, Land use planning 27thFebruary, 2025 Member(av) 19

  20. Viksit Bharat Swachh Bharat: Viksit Bharat = Swachh Bharat (Child stunting & under weight) 27thFebruary, 2025 Member(av) 20

  21. Conclusion  We are well placed to become a UMIC/HIC  New Opportunities must be grabbed  Demographic Changes: WAP  De-monopolization of manf exports  Services unbundling/fragmentation  Digital=>Phygital: Blended/Hybrid Expert systems/AI  Old challenges to address  Quality of Basic education(FLN) & skilling  Use expert systems, Blended AI  Higher Ed, R&D & Innovation 27thFebruary, 2025 Member(av) 21

  22. Social Indicators improve with PcGdp 90  India’s Life expectancy at birth is now = 67.7 yr(dot) (Female = 69.4)  Target: 2030 UMIC (dot), with LE Total( 71.4 yrs), Female(74.1 yrs)  Target: 2050 HIC(dot), with LE total (77.2 yrs), Female (80 yrs)  Similarly, Public Health, Education, & other social indicators Life expectancy at birth, total (years) 85 80 75 Life Exp, Total (Yrs) y = 5.5269ln(x) + 19.133 R² = 0.7116 70 65 60 55 PcGDP, PPP (const 2021 int$) 50 0 10000 20000 30000 40000 50000 60000 70000 80000 27thFebruary, 2025 Member(av) 22

  23. THANKS 27thFebruary, 2025 Member(av) 23

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