How do you summarise India’s journey so far in nearly three quarters of a century of Independence and where do we stand globally?

After being freed from the shackles of colonialism, India has established itself as a leader at the global stage. However first, India had to play catch-up. We have gone from a food deficit nation to a food surplus one. Our service sector has emerged as a global powerhouse. Yet, we lag behind in manufacturing. Investments are needed to improve our physical infrastructure and improve our human development outcomes. So, there is significant room for improvement. Despite having jumped up 79 places in the World Bank’s ease of doing business rankings in five years, India can still make substantial improvements in its business environment. Today, India is at the forefront and has the potential to guide the world in some areas. Our digital payments ecosystem provides seamless access and security. India can guide the world in applications of technologies such as artificial intelligence (AI) and blockchain among others. The digital transformation India is undertaking will ensure that the benefits of technology reach the doorsteps of all citizens, transforming their lives and solidifying India’s status as a leader of nations.

What is the pathway to realise the vision of a “New India”?

Despite impressive growth, India’s per capita incomes remain a fraction of our peer countries. China for example, is at 5 times India’s per-capita incomes. So we need to converge to global per-capita income levels. Gaps exist within India as well. Some areas are much richer than others. This is the second gap we must overcome. As the honourable Prime Minister wrote in his foreword to the ‘Strategy for New India @ 75’ document, the objective of a New India is to create an ecosystem that enables each and every Indian to reach their full potential. To realise this vision, a single-minded pursuit of growth, reforms and resilience is necessary. We must ensure that this growth is inclusive, sustainable, and regionally balanced. High quality health and education delivered leveraging technology and complemented by investments in physical infrastructure are the key to this vision. At the same time, structural reforms for private sector-led wealth creation are critical as well. The government and the private sector must work as partners to make this vision a reality.

Where do you see India in the next 70 years?

If we look back at 1947, the India we see now is vastly different. The change between now and the next 70 years is likelier to be more profound. Technology has permeated our lives like never before, and the pandemic has accelerated this trend. This trend is likely to persist as humankind continues to make technological advances. India will be seen at the forefront of this technological revolution. In our lifetimes, artificial intelligence (AI) is expected to be the largest technological opportunity. The economic benefits will not be uniform across the globe, and leading early adopters could capture an additional 20-25% in net economic benefits, compared to late starters. We are already taking steps in the application of AI across social and commercial fields, enabling India to solve for the world, making it the leader in technologies not just now, but setting it up to reign the global technological landscape in the next 70 years. India will also have the largest English speaking workforce, becoming a labour market for the world. Sustained growth will see India among the top three countries in terms of per-capita incomes, firmly establishing India as a global leader.

NITI Aayog gives direction to many policy initiatives and is setting the tone for newer industries to develop from the scratch. Which are the sectors where India can be a leader globally?

We are looking at several areas where India has the potential to be a global leader. Electric vehicles and battery storage manufacturing is one area. The future of mobility is clean, connected, and shared, and India must be at the forefront of this revolution. Recently, the central government allowed electric vehicles to be sold without batteries, enabling cost reductions and creation of a battery swapping ecosystem. India can emerge as a leader in areas such as food processing, mobile manufacturing, networking products, pharmaceuticals, medical devices and solar photovoltaic system manufacturing. Several production linked incentive schemes are already underway, with many more being finalised to unlock the potential in these sectors. There is also immense potential in the domains such as AI, data analytics, blockchain, cybersecurity, cloud computing and genomics, with applications all across India in both commercial and social aspects. We must create an enabling environment for these technologies to thrive, ensuring India will be a leader in these technologies, solving for both India and the world.

What are the economic and financial challenges we need to tackle to become self-reliant?

Recovering from the global pandemic induced recession is the first economic challenge we must tackle. Policy action has already been taken in this regard, which has been a mix of fiscal, monetary and reform-based stimulus. The government stands committed to ensuring a quick recovery from this slowdown. In the long run, the economic challenges to becoming self-reliant are primarily related to our agriculture, manufacturing, and infrastructure sector. Modernisation of the agriculture sector is a must to drive up productivity. This must also be accompanied with investments across the cold chain, not just cold storages, and investments in the food processing industry, turning India into the food basket of the world. Globally, countries have enabled the creation of global giants in different sectors, and we must learn from them. These countries nurtured their local industry with a focus on cost competitiveness, quality, size and scale. They have also adopted next-generation technologies to help global expansion. India can and must do the same. The binding constraint in the manufacturing sector is that of scale. We need to enable size and scale in this sector, to raise the competitiveness of our products. Cost of logistics will reduce with a thriving infrastructure sector, which is what the ‘national infrastructure pipeline’ aims at. The change in the definition of micro, small and medium enterprises (MSMEs) announced earlier this year will enable them to undertake further investments, without having to give up the benefits that come with MSME status. Monopoly has ended in coal sector which is now open for private sector investment. These moves will enable greater competitiveness in key industries. We must continue to attract foreign direct investment through continued reforms and an enabling business climate. We also need reforms in land and labour to unleash large scale manufacturing and job creation. Labour laws need to be drafted balancing the interests of both the employer and the employee. It is in the manufacturing and infrastructure sectors where the financial challenges show up as well. The problem can be traced back to an asset-liability mismatch. Short term funds were used to finance long term projects. As the cost of funds escalated, these projects started to become unviable, leading to a pile of non-performing assets. As a result, credit growth to these sectors has remained constrained. The RBI and the government have taken several steps to ease credit flow, especially in the light of the pandemic. Governance reforms in public sector banks along with privatisation and specialised development finance institutions are needed to revive credit flow to healthy levels. Insurance penetration needs to increase to provide another pool of loanable funds to long term projects.

What are the areas India needs to focus on to make this India’s century?

To truly make this century India’s century, we must focus on technology adoption across all sectors. We must get into sunrise areas of growth such as electric mobility, battery storage, artificial intelligence and genomics. Manufacturing is likely to be tech driven in the future and we must ensure that we are prepared. We must enable technological interventions across all sectors, which will drive India’s transformation in the coming decades.