This new year has seen significant predictions and discussions regarding the Indian economy. How fast will the 5th largest economy in the world become the 3rd largest? How soon will India become a 10 trillion economy? There is great optimism and confidence across the board that the fastest-growing major economy of 2022 will continue to be so in 2023.
While there is a lot of positivity around these big numbers, much less attention has been given to a smaller but more significant number. This number is India’s per capita income which currently stands around $ 2000. While GDP growth signifies progress and expansion of business opportunities, growth in per capita income is the one that will alter lives. The average per capita income of developed nations is around $ 22,000. The discussion that we need to be having today should be around this 11x journey that India needs to undertake. This is the journey that we need to plan for.
It is worth stepping back and understanding the significance of this journey. Here are a few points worth considering
- Trickle-down economics, which might have worked for nations with smaller populations, will certainly not work for one with a population of 1.4 billion.
- This journey has to account for the diversity of India, and ensure that every Indian enjoys the fruits of progress.
- We need to adopt sustainable means of traversing this journey
- We must stay true to our democratic and liberal values on this journey.
There are no guides or case studies that we can refer to simply because a transformation of this scale has never been imagined in history.
The only thing we can be sure of is that this transformation cannot be brought about just by governments – however committed they are – or by large businesses – however enlightened they are. This transformation can only come about through the active participation of average Indians across the length and breadth of the country. India needs to usher in the ‘Age of the Entrepreneur’ at an ‘India’ scale. This goes much beyond start-ups and unicorns. We need to instill an entrepreneurial culture in India. We need to create vast armies of entrepreneurs who can create products and deliver services of real value.
India already has a large MSME sector – estimated to be around 634 lakhs – contributing around 30% of the GDP. This sector will have to be the real engine of the Indian transformation. And they can if they have access to the right resources. If they can use modern tools of business planning, scope out emerging opportunities and adopt a scientific, data-driven approach to decision-making.
We at The Strategy School hope in some small way to contribute to this transformation.