This assessment study looks at how various economic and demographic parameters are evolving. It predicts conditions in India by 2020 if these trends continue to move in the 2010s the same manner as they have been over the 2000s. This is not a general equilibrium analysis and takes a sector by sector and area by area approach. However, without making any strong assumptions about the future, we are fairly confident that conditions by 2020 will not be very different from that revealed in the following pages.
Trend Growth: Economic Growth in the 2010s
Economic Structure: An even more of a services economy
Expenditure of Households: Food
Expenditure of Households: Services
Consumer Durables Penetration Rates (%)
Consumption of Agriculture Commodities
Additional Employment Generation (millions)
Fastest Growing Non-Agri Occupations in the 2010s (millions)
Comparison of Standard of Living – States and Countries
The trends of the 2000s will continue – but growth will be much faster – Agriculture investment will finally resume after many decades of relative sparseness, but this sector could well grow much faster than the expected 3.4% - a rural road network has been built up, high agri commodity prices would improve terms of trade towards this sector, rural human capital has improved tremendously in the 2000s, new technologies are about to enter on a mass scale, agri reforms such as the APMC acts are being overhauled. However, we would need to wait till the 2020s for the full impact of these changes to be felt – for the time being agriculture (including forestry and fishing) would barely sustain its 3.4% growth. Manufacturing opportunities would improve on account of rapidly growing domestic market as well as international markets – however energy and wage price inflation will play a role. The labour problem has not been solved yet, and expect a resurgence in labour unrest in 2010s. Transport, storage and communications will be the driving force of growth in the country in the 2010s – A large road network is going to be operational, ports are rapidly improving, air transport infrastructure is being overhauled, and most important, a strong ecosystem has been created for the telecom sector.
Overall GDP growth will be around 9.6% annually, even if the government does not do anything. It would be higher if agriculture and electricity, gas and water supply are able to break through theior long term institutional constraints. It would be lower if inflation eats into macro-economic stability and law and order conditions get out of hand.