How do you summarize India’s journey since 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 state. Our services sector has emerged as a global powerhouse. Yet, we lag behind in manufacturing. Investments are needed to improve our physical infrastructure and 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 AI and blockchain. 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 realize the vision of a New India?

Despite impressive growth, India’s per capita income remains a fraction of our peer countries. China, for example, is at five times India’s per capita income.

So, we need to move towards 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 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 realize 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. Delivering high quality health and education by leveraging technology, complemented by investments in physical infrastructure are key to this vision.

At the same time, structural reforms for the 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 likely to be more profound. Technology has permeated our lives like never before and the pandemic has accelerated this trend, which is likely to persist as mankind continues to make technological advances.

India will be seen at the forefront of this technological revolution. In our lifetime, 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, making India 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 income, firmly establishing India as a global leader.

NITI Aayog gives direction to many policy initiatives and is setting the tone for some industries to develop from scratch. In which sectors can India become a global leader?

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 finalized to unlock the potential in these sectors.

There is also immense potential in domains such as AI, data analytics, blockchain, cybersecurity, cloud computing, and genomics, with applications 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 challenges we need to tackle to become self-reliant?

Recovering from the global pandemic-induced recession is the first economic challenge that we must tackle. Policy action has already been taken in this regard, which has been a mix of fiscal-, monetary-, and reforms-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 sectors.

Modernization of the agriculture sector is a must to drive up productivity. This must also be accompanied by investments across the cold chain, not just cold storages, but 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.

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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 the MSME status.

Monopoly has ended in the 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.

Financial challenges show up in the manufacturing and infrastructure sectors as well. The issues 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 becoming unviable, leading to a pile of non-performing assets. As a result, credit growth to these sectors has remained constrained.

The Reserve Bank of India 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 privatization and the establishment of specialized 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.

Which areas are you focussing on to make this India’s century?

To truly make it 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, AI, and genomics.