A roadmap to a $5 trillion economy – Vinit Goenka, Trisha Shreyashi

From the ninth to the sixth world economy: today, the formerly colonial state space is the site of a complex set of official practices of representation and regulation that can profoundly modify the spatio-temporal coordinates of global financial practice. India has now emerged as the world’s digital capability hub with around 75% of the world’s digital talent in the country.

India’s spectacular rise is attributed to vast investments in technology, both in communications technology and information technology (IT). The proliferation of tech-savvy consumers and the second-generation digital revolution across the economic spectrum has catapulted India into Asia’s third-largest economy. This epic Indian digital revolution is reminiscent of the American industrial revolution of the 19th century. This new era of the second digital revolution is called the “information age” driven by technology and well-oiled markets.

India aims to become a $5 trillion economy by 2025. The International Monetary Fund (IMF) in its World Economic Report confirms that India’s vision of becoming a $5 trillion economy will be realized d 2026 – 2027. One of the most fascinating events has been the rebound of the Indian economy from the setback of COVID-19 while the rest of the world still revolves around losses. However, this return depends on maniacs, panics and accidents.

The Russian invasion of Ukraine in 2022, the panic caused in the European IT services industry by Brexit 2020 and the crash triggered by COVID-19 – all this has led to strong growth in the IT services sector (ITeS ) in India. Additionally, the infusion of technology into the financial sector under the regulatory sandbox regime has spurred retail investment, foreign investment, and institutional investment. This led to a massive movement of cash within the economy.

Ukraine was one of the main hubs for offshore and nearshore third-party services in engineering and IT services. Europe has so far been a strategic service delivery partner for Ukraine. However, after the invasion, there was a major shift of service points from Europe to India. Brexit-triggered sanctions and restrictions on free movement across Europe have also forced service companies to look for an alternative. Furthermore, the pandemic outbreak and subsequent conspiracy theories alleging China as a threat have also pushed companies towards India. Moreover, large multinational corporations (MNCs) also prefer India over other jurisdictions. For example, Amazon, CISCO, Google, Microsoft, etc. have significant activities from India. Countries such as the Philippines, Malaysia, Indonesia, Sri Lanka, Bangladesh and Vietnam have been left behind with competitive tax policies introduced by the Indian government, many changes made to the ease of making policies trade, rapid infrastructure growth, connecting Tier 2 and Tier 3 cities to major cities through good connectivity of roads, railways and air transport. India has given a strong message to the world that India is synonymous with business.

One can also see the benefits of a vibrant youth who make up half of the country’s population and our fascination with creating an innovative technology-driven economy. Hence, the government has offered various incentives in order to promote innovation through flagship programs such as Startup India, Digital India, Atmanirbhar Bharat, etc. age.

One of the landmarks in the creation of the digital ecosystem in India has been the JAM trinity (Jan Dhan – Aadhar – Mobile). It promoted financial inclusion by providing ubiquitous access to banking services and stimulating the direct transfer of benefits which increased the spending capacity of the abject poor, thereby increasing the standard of living. Additionally, the removal of duplicate beneficiary database through identity authentication has further boosted economic growth.

Consumers can be seen moving from the vicious circle of debt-spending-imports to the virtuous cycle of saving-investing-exporting to transform India into a $5 trillion economy. Thanks to these factors, India has grown by more than 8% in the fiscal year 2021-22 and is expected to exceed the current growth rate in the next two fiscal years.

This development can be further accelerated by establishing centers of excellence in identified technologies, accelerating smart city projects, investing in digital infrastructure and providing a robust data protection regime. From traditional industrial practices to automation, the fourth industrial revolution taking place in the Indian subcontinent relies on the legs and limbs of knowledge and technology.

Goenka is a member – CRIS Board, Ministry of Railways, Government of India; Member – Task Force (IT), Ministries of Shipping, Roads, Transport and Highways, Government of India and Former National IT Cell Co-Organizer, BJP

Shreyashi is a legal professional and columnist. She is also a panelist at the Harvard Business Review Advisory Council.

Disclaimer: The views expressed in the above article are those of the authors and do not necessarily represent or reflect the views of this publishing house. Unless otherwise indicated, the author writes in a personal capacity. They are not intended and should not be taken to represent the official ideas, attitudes or policies of any agency or institution.

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