New Delhi: While the world is awaiting world’s largest democracy to announce its annual union budget, the question really is what kind of budget should India focus on. Should the conservative or the progressive approach govern India’s growth?
A progressive budget prioritising infrastructure, hydropower, and the development of expansive community spaces will not only strengthen the backbone of our sector but also propel India toward inclusive and environmentally sustainable growth.
Additionally, we look forward to reforms that address liquidity concerns, streamline project execution through regulatory simplifications, and incentivise technological advancements in construction. A strong emphasis on sustainability initiatives, such as promoting green building materials, energy-efficient infrastructure, and eco-friendly development, would further enhance India’s position as a global leader in sustainable progress.”
However, it is important to note that there have been countries that have delivered high growth fuelled by high borrowings, only to witness sharp slowdowns and/or restructuring in the future. Countries that run current account deficits are more vulnerable as debt-fuelled growth, even in local currency terms, is likely to eventually lead to rising foreign currency indebtedness, which in certain situations can lead to painful outcomes.
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” These words of Albert Einstein apply not just to investments but to economic growth as well. A six per cent real growth for 20 years should conservatively increase India’s GDP per capita to $10,000 from $2,650 by 2045. A majority of Indians should live to see that day given that 63 per cent of the population is below 50 years of age. Even a 5.5 per cent real growth rate will take us there, but in 22 years. Whether it happens by 2045 or 2047 makes little difference in a nation’s journey. The key is to get there. The key is to grow for extended periods with low risk. (Assumptions in both cases of this exercise: 5 per cent India inflation, 2 per cent US inflation, 3 per cent INR depreciation and 1 per cent population growth, all per annum).
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