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$5 Trillion Economy

1. India is rising steadily towards becoming a global power with a focus on sustainable prosperity, responsible freedom, inclusive growth, peace and mutual respect.

2. This requires a vision to act as a balancing power.

How is India’s foreign policy evolving?

1. India’s foreign policy approach has been undergoing a paradigm shift. Economic and strategic relations are gaining significance.

2. India is making global engagements through the ‘Neighbourhood First’ and ‘Act East’ approach.

3. More focus has been on engaging with SAARC, ASEAN, BIMSTEC and Indian Ocean Region (IOR) in recent years.

4. India’s interest in the regions of the Indian Ocean shows the emerging maritime dimensions of India’s neighborhood policy.

5.  India has also attached itself to the SAGAR (Security and Growth for All in the Region) doctrine, as Indian Ocean island states are the key to India’s strategic geographical security.

What needs to be done to achieve a $5 trillion economy?

1. India targets to achieve a $5 trillion economy by 2024, which will require design, funding, and governance.

2.  According to the Economic Survey, India must have a GDP growth rate of 8% to achieve the target.

3. It states that investment, especially private investment is essential to drive demand, create capacity, increase labor productivity, introduce new technology and to generate jobs.

4. It also suggests an export integrated growth model.

5. Government is also bringing in structural reforms, clarity in policy and processes, efficiency in allocation risks and resources.

Which sectors are focused?

The target requires attention to job creation and skill development.

MSME sector

1. There are 65 million MSMEs that create about 120 million jobs.

2. The Government has undertaken several transformational reforms in MSME sector recently.

3. India has to focus on setting-up machinery that manufactures products like medical imaging devices, nanotechnology integrated circuits, computers, TVs, etc.

4. There is a need to emphasize on flexible labor laws.

Agriculture Sector

1. 60% of India’s population lives in rural areas and is mostly engaged in agriculture.

2. The Government has committed to double farmer’s income by 2022.

3. Many measures towards upgrading agri-logistics, agro-processing and agro-marketing are undertaken. Example- Creation of Gramin Agriculture Markets (GrAM) and linking them with the electronic farmer marketplace and eNAMs.

4. The Government has focussed on the development of sustainable cold-chain infrastructure in India.

Services Sector

1. Services contribute 56.5 % of GDP but create only 30% of jobs.

2. The sector needs to develop expertise in the Internet of Things (IoT), Artificial Intelligence (AI), and Virtual Reality (VR).

3. Travel and tourism, health and professional services need to be focussed.

4. Better delivery of infrastructure, education and essential services would also create a large number of jobs and growth.

Digital India

1. Digital India initiative was launched by Prime Minister in 2015.

2. India can create up to $1 trillion of economic value from the digital economy in 2025.

3. India’s inclusive digital model is narrowing the digital divide within the country and bringing benefits to all segments of people.

Where does India need to focus?

1. The government has set several visions for New India.

2. So, it is essential to work on a framework that provides ease of business and predictability.

3. India should also focus on providing an environment that encourages private sector investments and innovation.