India’s GDP needs to grow annually at 8-8.5% to create opportunities in the post COVID-19 era, and the country risks a decade of stagnating incomes and quality of life if urgent steps are not taken to spur growth, says McKinsey Global Institute (MGI).India will have to undertake a slew of reforms over the next 12-18 months with the aim of increasing productivity and creating jobs, MGI said in a report.Urbanisation trendGiven the increasing urbanisation and population trends, there will be 90 million additional workers in search of non-farm jobs by 2030 and India will have to triple job creation to 12 million gainful non-farm jobs per year from the 4 million achieved between 2013 to 2018, it said.
The GDP, which is set to contract by over 5% in FY21 as per some estimates, needs to grow at 8-8.5% per annum for the next decade to create the opportunities, it said, warning of difficulties if it is not achieved. On the reforms front, it advocated attention to manufacturing, real estate, agriculture, healthcare, and retail sectors, unlocking land which can reduce prices by up to a fourth, creating flexible labour markets, enabling efficient power distribution to reduce tariffs for consumers by over 20% and privatising 30 top state-run enterprises.Financial sector reformsFrom a financial sector perspective, it said reforms and streamlining fiscal resources can deliver $2.4 trillion in investment while boosting entrepreneurship by lowering the cost of capital for enterprises by about 3.5 percentage points and also pushed for creation of a ‘bad bank’ to take care of dud assets.
A bulk 60% of the reforms will have to be undertaken by the States and the remaining 40% by the Centre, it added.MGI pointed out that the manufacturing and the construction sectors offer the most opportunities for economic growth and also for higher employment.
You have reached your limit for free articles this month.
To get full access, please subscribe.
Already have an account ? Sign in
Show Less Plan
Subscription Benefits Include
Today’s Paper
Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.
Faster pages
Move smoothly between articles as our pages load instantly.
Unlimited Access
Enjoy reading as many articles as you wish without any limitations.
Dashboard
A one-stop-shop for seeing the latest updates, and managing your preferences.
Personalised recommendations
A select list of articles that match your interests and tastes.
Briefing
We brief you on the latest and most important developments, three times a day.
*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.
A letter from the Editor
Dear subscriber,Thank you!Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.Suresh Nambath
