Making India a developed economy is a herculean task
Abstract
India’s aspiration to become a developed economy by 2047, when it completes 100 years of independence, is ambitious yet achievable if supported by consistent policy reforms, structural changes, and socio-economic transformation. A developed economy is characterized by high per capita income, low poverty, advanced infrastructure, innovation-driven growth, and a robust social security system. India, while being the fastest-growing large economy in the world with a GDP (Gross Domestic Product) growth rate of 6.7% in FY 2024–25 (IMF, 2025), still faces challenges such as unemployment, poverty, income inequality, overdependence on agriculture, and political populism. This article discusses the key hurdles, draws comparisons with developed economies, and provides a roadmap to achieving the goal.
1. Making India a developed economy by 2047
The Government of India (GoI) has set the target of making India a developed nation by 2047 under the “Amrit Kaal Vision.” Achieving this requires India to sustain annual GDP growth of 7–8% while ensuring inclusive development. According to NITI Aayog, India needs to reach a per capita income of around USD 13,000–15,000 by 2047 (current level: ~USD 2,800, World Bank, 2025).
2. Features of a developed economy
A developed economy is typically marked by:
- High per capita income and purchasing power.
- Low levels of poverty and unemployment.
- Universal access to quality healthcare and education.
- Industrial and technological advancement.
- Social security and welfare mechanisms.
- Strong governance and institutional capacity.
Countries like the United States, Japan, and Germany exemplify these traits.
3. Features of the Indian economy vis-à-vis developed economies
India has several strengths—large domestic market, demographic advantage, digital transformation, and rising middle class. However, when compared to developed economies, major gaps remain:
- Per capita income: USD 2,800 in India vs. USD 40,000+ in developed countries.
- Human Development Index (HDI): India ranks 134 (UNDP, 2024), far behind advanced nations.
- Infrastructure: Despite progress, logistics costs are ~14% of GDP in India compared to 8–9% in developed economies.
- Innovation capacity: India ranks 40th in Global Innovation Index 2024, while developed economies dominate the top 10.
4. Population control and population dividend
India’s population is 1.43 billion (UN, 2025), the largest in the world. The working-age group (15–64 years) constitutes nearly 67% of the population, offering a demographic dividend. However, without proper population control measures and adequate job creation, this dividend may turn into a demographic burden. Developed economies typically have smaller, aging populations with high productivity per worker, whereas India struggles with skill gaps.
5. Disguised unemployment in agriculture
Around 44% of India’s workforce is employed in agriculture (Economic Survey 2024–25), yet the sector contributes only 15% to GDP. This indicates large-scale disguised unemployment, where more people work than actually required, reducing productivity. Transitioning labor from agriculture to manufacturing and services is crucial to emulate developed economies like South Korea or Japan, which shifted their workforce successfully.
6. Unemployment and poverty
Despite economic growth, unemployment remains high at 7.5% (CMIE, 2025), particularly among the educated youth. Poverty, though declining, still affects nearly 11% of the population (World Bank, 2024). In contrast, developed economies have robust social security nets, unemployment benefits, and near-universal healthcare access, which India lacks.
7. Competition in international trade
India’s share in global exports is 2.1% (WTO, 2024) compared to over 10% for China. To become a developed economy, India must enhance its global competitiveness through trade agreements, technology upgrades, and manufacturing strength. Initiatives like “Make in India” and Production Linked Incentives (PLI) are steps in the right direction, but export diversification and value addition remain key.
8. More political slogans like Indira Gandhi gave in 1971
Indian politics has often been shaped by populist slogans and welfare schemes. From Indira Gandhi’s “Garibi Hatao” in 1971 to recent slogans like “Sabka Saath, Sabka Vikas”, such messages mobilize public support but do not necessarily translate into sustainable economic reforms. Developed economies prioritize long-term structural reforms rather than short-term political wins.
9. Roadmap to achieve the target
To realize the 2047 vision, India must:
- Sustain GDP growth of 7–8% for the next two decades.
- Increase investments in infrastructure and logistics efficiency.
- Reform labor and land laws to boost manufacturing.
- Strengthen education and skill development to harness demographic dividend.
- Reduce dependency on agriculture by promoting agro-processing and services.
- Deepen financial inclusion and expand social security coverage.
- Boost R&D (Research and Development) expenditure to at least 2% of GDP (currently 0.7%).
- Ensure political stability and policy continuity.
- International trade must become an engine of growth.
- Geo-Political tensions must be eased so as reduce expenditure on defense.
10. Concluding remarks
Making India a developed economy by 2047 is indeed a herculean task. The nation’s progress is evident in rising GDP, digital penetration, and global recognition, yet challenges like unemployment, poverty, income inequality, and weak infrastructure persist. A balanced approach combining high growth, inclusive policies, institutional reforms, and human capital development is the only way forward. As history shows, countries like South Korea and Singapore transformed within decades through consistent strategies. India too can achieve its vision if politics aligns with economic pragmatism.
Abbreviations used
- CMIE – Centre for Monitoring Indian Economy
- GDP – Gross Domestic Product
- GoI – Government of India
- HDI – Human Development Index
- PLI – Production Linked Incentives
- R&D – Research and Development
- UN – United Nations
- UNDP – United Nations Development Programme
- WTO – World Trade Organization
