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India to contribute 30% of global GDP by 2040; focus on ‘champion states’ growing at 11% per annum: Amitabh Kant


Highlighting India's pivotal economic reforms and its promising near-term economic forecast, Amitabh Kant, India's G20 Sherpa, asserted earlier today that it is accurate to predict that 30 percent of the world's gross domestic product (GDP) will be attributed to India between 2035 and 2040. Kant anticipates that by 2027, India's economic growth will surpass that of Germany and Japan.

 

During his speech at the Confederation of Indian Industry (CII) Business Summit 2024 held in New Delhi on Saturday, May 18, Kant, who previously served as the CEO of the government's think-tank NITI Aayog, emphasized the need for collaboration between the government and states to foster the development of 12-13 'champion states' growing at an annual rate of 10-11 percent.

 

Kant noted that India has implemented significant structural reforms, transitioning from the 'fragile five' to the 'top five', with a growth rate of approximately 8.4 percent over the past three quarters. He encouraged Indian companies to adopt a global mindset to penetrate international markets more effectively for accelerated growth. He stated, "They should also focus on quality…CII, in the next five years, needs to work closely with the states to make things easier at the state level. If states grow, India grows."

 

In a conversation with Jamshyd Godrej at the CII Summit, the former NITI Aayog CEO remarked that "this was India’s century" and "we cannot afford to squander it away." According to Kant, this would necessitate the private sector in India to focus on:

 

- Expanding the size and scale of manufacturing;

- Becoming leaders in emerging areas of growth;

- Aiming to export and penetrate international markets;

- Implementing artificial intelligence (AI) across various sectors;

- Transitioning to clean energy;

- Concentrating on quality and research & development (R&D).

 

Kant highlighted the critical role of state governments as facilitators and catalysts. The next five years are vital for sustaining and boosting India’s economic trajectory, he said. Kant also discussed the importance of rapidly adopting electric vehicles (EVs) in India, pointing out both government initiatives and the private sector's role in this transformation.

 

"A lot of action is underway in the coming five years," Kant acknowledged, referring to the significant changes occurring in the automotive industry due to the global move towards sustainable transportation.

 

"There is a huge disruption taking place and it's important that we accelerate the pace of EVs both in two-wheelers and three-wheelers which account for about 75 percent of our vehicles and the government has already allocated ₹57,613 crore for procuring 10,000 electric buses," Kant stated.

 

He outlined the expected benefits of these investments, predicting a surge in the manufacturing of electric two-wheelers, three-wheelers, and buses. Highlighting the role of the Production Linked Incentive (PLI) scheme, Kant added, "So once that gets accelerated, you'll see two-wheelers, three-wheeler manufacturing, buses manufacturing."

 

"I think the next big ticket thing will be the battery manufacturing for which the PLI scheme has been bid out, and you will see many companies manufacturing batteries from Tata to Reliance to Maruti to Exide," Kant concluded.


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