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$5 Trillion economy UPSC NOTE

 India $5 trillion Economy by 2028

  • India aims to become a $5 trillion economy by 2028. 

  • This ambitious goal will require sustained growth of around 8% per year. 

The government has identified several key drivers of growth, 

  1. Infrastructure development: Investing in roads, railways, ports, and airports will improve connectivity and reduce costs for businesses.

  2. Manufacturing: Promoting manufacturing growth through initiatives such as Make in India will create jobs and increase exports.

  1. Digital economy: Encouraging the adoption of digital technologies will boost productivity and innovation.

  2. Skill development: Ensuring that the workforce has the skills needed for the jobs of the future is crucial for sustaining growth.

  • The government has also taken steps to improve the ease of doing business in India

  • This includes simplifying tax laws, reducing regulatory burdens, and streamlining administrative processes.

  • Achieving the $5 trillion target will require a concerted effort from the government, businesses, and citizens

  • If India can successfully implement its growth strategy, it will become a major economic power in the 21st century.

Specific steps that India is taking to achieve its $5 trillion economy,

  1. The government has launched several ambitious infrastructure projects, including the National Infrastructure Pipeline, which aims to invest ₹111 trillion ($1.4 trillion) in infrastructure over the next five years.

  2. The Make in India initiative aims to attract foreign investment in manufacturing and boost India's share of global manufacturing output from 12% to 25% by 2025.

  • The government is promoting the adoption of digital technologies through initiatives such as Digital India, which aims to connect every village in India to the internet and provide digital literacy to all citizens.

  • The government has launched the Skill India initiative to train 400 million people in skills by 2022.

  • Achieving the $5 trillion economy goal will be a challenge, but India has the potential to succeed.

  • The country has a large and growing population, a young and entrepreneurial workforce, and a strong track record of economic growth. 

Economic prosperity doesn't guarantee the well-being of all citizens
  • Japan is the third largest economy by GDP in the world. 

  • In Japan, there is reportedly a death by suicide every 20 minutes

  • About 15 lakh Japanese have not left their homes for years, a form of severe social withdrawal known as hikikomori

  • Old parents rent actresses who come in on Sunday to call them ‘Mom’ and ‘Pop’ because their own daughters don’t visit any more. 

  • Every day, dead people are discovered in tiny apartments days or weeks after they died.

  • These are called kodokushi or lonely deaths.

  • Japan’s climb to the third position economy-wise has not lifted all boats equally.

  •  It has tossed the weak to the margins where they languish because economic growth on steroids has unpicked the safety catch of family and community ties.

  • For 40 years, Japan was the world’s second largest economy, powered by manufacturing and exports. 

  • But after the 2008 world financial crisis, the wheels came off the Japanese economy. 

  • Japan’s population started spending less, exports shrank, and government incentives dried up

  • On the other hand, China enjoyed a manufacturing boom and dislodged Japan to become the world’s second-largest economy by GDP.

  • On losing rank, however, Japan displayed remarkable ego-free economic diplomacy. 

  • Even if this statement was made partially to save face, the two economies intertwined immediately. 

  • Today, China is Japan’s largest trading partner, proving that in the world political economy it pays to embrace your main competitor.

  • This ego-free ‘activism’ has ensured that Japan has held on to the third position in world GDP rankings for the last 14 years.

  • But let us return to the parallel story in Japan. 

  • The strength of personal and professional relationships withered and the multi-generational family and social structure became atomised. 

  • This was a perfect storm in the lives of the traditional, semi-skilled workforce. 

  • Workers moved from the countryside and satellite towns to cities expecting ‘salaryman’ jobs, but many discovered that they were not trained for the technological tsunami sweeping the high-growth sectors. 

Concerns about the potential impact of India's economic growth

  • India is one of the fastest growing economies in the world, and this growth is expected to continue in the coming years. 

  • However, there are concerns about the potential impact of this growth on the country's population.

  • One concern is that the benefits of economic growth may not be shared evenly. 

  • The rich are likely to benefit more from economic growth than the poor, which could lead to an increase in inequality. 

  • This could exacerbate social tensions and make it more difficult to address poverty and other challenges.

  • Another concern is that economic growth could put a strain on India's resources. 

  • India is already a water-scarce country, and climate change is expected to make this problem worse

  • Economic growth could also lead to increased pollution and environmental degradation.

  • In addition, economic growth could lead to a loss of traditional culture and values

  • As India becomes more integrated into the global economy, its culture is likely to be influenced by Western values and customs. 

  • Finally, some people worry that economic growth could lead to social unrest

  • As the gap between rich and poor widens, there is a risk of social unrest and violence. 

  • This could destabilize the country and make it difficult to address other challenges.

  • Despite these concerns, there are also many potential benefits of economic growth for India's population

  • Economic growth can lead to higher incomes, better living standards, and more opportunities for education and healthcare

  • It can also create jobs and reduce poverty.

India's economic growth is currently driven by?

  • Today, the Government of India claims that the country is on the cusp of an economic tsunami.

  • India’s economic growth pivots on capital, productivity and labour, and data show that for over four-fifth of Indians, the $5 trillion economy is a bridge too far.

  • In 2021, 1% of the population owned about 41% of the nation’s wealth, while 50% owned 3% of its wealth, according to Oxfam

  • In such an environment, the dash towards a $5 trillion economic trophy lies in the grip of the resource-rich power brokers who will seize the initiative. 

  • But ironically, it is the low-resource citizens who are funding the investment for the proposed $5 trillion economy.

  • At the same time, the contribution of labour, the other driver of growth, is hamstrung due to dubious educational and skill attainments and halting digital literacy. 

  • Productivity is just beginning to get a boost through the creation of digital and physical infrastructure.

  • The government is aware that the rich are moving into pole position to deliver the $5 trillion target just before the 2029 general election


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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: $5 Trillion economy UPSC NOTE
$5 Trillion economy UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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