Future of India - The Winning Leap
13 May 2015
By Shashank Tripathi, Partner and Strategy Leader, PwC India
While India has been applauded for its vibrant democracy, it has also been evident that it has lost opportunities on the economic front. Now that a new government with a clear mandate for development has taken over, the time has come for India to examine what it would take to grow in leaps and bounds. With a large youth population, this is a once-in-a-lifetime opportunity for the country to develop, both economically and socially.
Who will take the lead in this growth - the government, the corporate sector or the entrepreneurial sector? PwC’s “Future of India – The Winning Leap” report launched in November last year emphasizes that for India to take the Winning Leap and grow its GDP by 9% per annum to become a US$ 10 trillion economy, a concerted effort from Corporate India, supported by a vibrant entrepreneurial ecosystem and a constructive partnership with the government will play a critical role.
Without a radically higher growth rate, the Indian economy will not be able to create the 10-12 million jobs that are needed to cope with the projected population growth in the next two decades. In a young democracy, with rising digital empowerment, this could lead to a significant social rift. Challenges on the security of energy, scarcity of food scarcity, and environmental degradation are also significant. This is why the envisaged growth must not just be rapid; it will require all the ingenuity and innovation India can muster.
To realize the Winning Leap vision, India needs to view its many economic and social challenges as opportunities for growth and renewal. With this perspective in mind, the report investigates performance in ten sectors that, together, constitute more than 70% of India’s GDP. The report benchmarks its sector targets with countries such as the US, UK and Korea. For instance, in the retail sector, India should aim to achieve 50% penetration of organized retail, taking cues from developed markets such as UK where the organized retail penetration is 80%.
The issues confronting India are enormous, both in complexity, scale, and the high expectations from citizens, as well as the lack of resources that the economy is currently facing. This growth will need to be thought through and approached in a way that is sustainable, both economically and environmentally. It will require a wider consensus that is open to new solutions and approaches. It will also demand a renewed focus on innovation, and for companies to invest in building capabilities that can cope with an economic situation and global competition worthy of a significantly larger economy than the US$2 trillion mark that India is approaching. The entrepreneurial sector will play a valuable role since job creation and spreading wealth beyond the prosperous top layer is only possible via setting up and nurturing enterprises throughout the nation.
A significant inflow of foreign capital – FDI of up to 15 times by 2034 compared to what it receives today - and know-how is needed for India’s growth. This provides an immense opportunity for countries such as the UK which have strong strategic ties with India to mutually benefit in this winning leap. Recent visits by the British Prime Minister David Cameron in 2013, and earlier this year in February by the chief executive of UK Trade and Investment Dominic Jermey, are witness to the growing need for collaboration across sectors such as energy, healthcare, manufacturing, financial services and infrastructure.
This once-in-a-lifetime opportunity will not be available to the coming generations. If India is able to marshal its resources to create widespread prosperity, the coming generations will applaud this effort and reap the benefits of living in this nation. This provides exciting opportunities, not only for the nation but also for foreign countries such as the UK to partner with India and use it as a blueprint for partnership with other growth markets.