7.6% annual real GDP growth needed for 25 yrs to be 'developed' India

India must rebalance its economic structure by strengthening its industrial sector so that its share in GDP rises from the current level of 25.6 per cent to 35 per cent by fiscal 2047-48, the article by Harendra Behera, Dhanya V, Kunal Priyadarshi and Sapna Goel said.

Agriculture and services activity would have to grow at 4.9 per cent and 13 per cent per annum respectively in the next 25 years with their sectoral shares in GDP at 5 per cent and 60 per cent respectively in fiscal 2047-48, it said.

A sustained improvement in the quality of public spending through a higher share of productive expenditure can play a conducive role in supporting growth, another article by Ipsita Padhi, Ranjeeta Mishra, Samir Ranjan Behera and Deba Prasad Rath noted.

The article deployed a dynamic factor model to obtain a composite index of the quality of government expenditure for 14 major Indian states between fiscals 2005-06 and 2019-20 and examines its relationship with gross state domestic product (GSDP) growth in a pooled ordinary least squares framework.

With states accounting for 60 per cent of general government expenditure and 70 per cent of general government capital outlay (adjusted for defence spending), they have an important role to play in India’s growth story, the second article noted.

Empirical findings suggest that an improvement in the expenditure quality of states leads to higher GSDP growth, highlighting the pivotal role of states’ expenditure quality in fostering growth, it added.

Fibre2Fashion News Desk (DS)