Can India become a developed country by 2047?

As Indian Prime Minister Narendra Modi celebrated 75 years of India's independence in August 2022, he declared that India will achieve developed country status by 2047, and he also called on the nation to "dominate the world." 

His announcement didn't stand out at the time as it's familiar to hear ambitious plans and grand visions in annual Independence Day addresses. However, more than one year later, the phrase "Viksit Bharat 2047" (Developed India 2047) has become a major part of Modi's economic vision to win a third term in India's national general election that began on April 19 and will run through June 1. 

Bloomberg reported that the phrase has cropped up in at least 23 of the 29 official speeches Modi has made since March.

Experts say India does have great economic potential given its large population and impressive economic performance since Modi took office in 2014, but the country faces a wide range of challenges to meet its goals, including shoddy infrastructure, patchy education and a lack of skilled workforce. 

In addition, the country also faces a number of obstacles to escaping the shackles of its economic past, including bureaucratic friction, the grip of caste, chronic protection of local business magnates and import tariffs that are among the world's highest.

According to Oxford Economics, India's gross domestic product (GDP) needs to grow by at least 8 percent annually from 2023 for the country to become developed by 2047, while data shows the country has never achieved this rate. India's GDP accelerated to 7.7 percent in 2023 from 6.5 percent in 2022. 

"India is indeed the fastest growing country in terms of GDP in recent years. But by 2047, Modi will be nearly 100 years old. His pledge is purely campaign advertising as the election is coming near," Liu Xiaoxue, deputy director of the Center for South Asian Studies at the Chinese Academy of Social Sciences (CASS), told CGTN, adding that based on its current growth rate, India still needs 80 to 90 years to catch up with China. 

Liu said one of the deficiencies of India's economy is that despite its fastest-growing pace, it has failed to generate enough jobs for its large and expanding young population as the country's economy is capital-intensive. "How to develop labor-intensive industries like manufacturing and how to create more job opportunities are critical for India," Liu said.

India's agriculture sector employs 45 percent of the country's workforce, but it generates less GDP than the service and manufacturing sectors. And though the service sector is the main driver of India's economic growth, it simply doesn't create enough jobs and generally recruits from the educated labor pool, whereas it takes time for the manufacturing sector to boost employment. 

India's national data shows that despite years of efforts to boost manufacturing, it still only accounted for about 15.8 percent of India's GDP output in 2023. 

"The chasm among the sectors holds back India's employment. India's domestic unemployment rate has remained above 7 percent for many years and the urban youth unemployment rate has exceeded 20 percent. When more unemployed people are thrown into the market, the poverty level will be further aggravated," said Zhang Rui, an economic expert and columnist who wrote six books on finance and economics.

A UN report in 2022 showed that India has 780 million people below the poverty line and 228 million people living in absolute poverty, the most in the world. 

What's more, though India has one of the largest working-age populations in the world – over 65 percent of the total population, it has one of the lowest labor force participation rates (LFPR), the share of the working-age population that's actually working or looking for a job. 

According to the International Economic Association, India's LFPR in 2022 was 55.4 percent, below the global average (60 percent), and the figure was even lower for women. Only 24.6 percent of Indian women (aged 15-64) were part of the labor force.

Besides, many of India's working forces are poorly educated or even illiterate. Official data shows that India's literacy rate for 2022 was 76.32 percent, only about 14 percent of the existing labor force has received vocational training, and the proportion of formally skilled workers in the total labor force is as low as 3 percent, highlighting the huge disparities existing in education levels of the country's rich and poor.

"The low quality of the overall labor force is bound to affect the pace of innovation and the improvement of labor productivity," said Zhang, adding that as India's total fertility rate plummeted from nearly 6.2 in 1950 to just under 2 in 2021 and the proportion of seniors is projected to rise to 14.9 percent, India can face the same problems as many other countries in the near future: the rising dependency ratio and the ageing pressure.

Economists also voiced concern over India's business environment as Modi's government has been very protective of local industries. 

In 2020, Modi proposed the "self-sufficient India" initiative, hoping to develop its domestic market. It has continuously raised tariffs on imported products and even tried to restrict imports of laptops, tablets, personal computers and other electronic items last year, but quickly reversed the decision following strong criticism.

Xu Qiyuan, deputy director of the Institute of World Economics and Politics at CASS, said in a recent journal that raising import tariffs to subsidize relatively backward domestic production has proved to be a failed development strategy for Latin American countries. He compared India with East Asian countries, saying the rise of East Asian countries is due to their export-oriented national strategies which encourage local enterprises to participate in international competition and improve their international competitiveness.

Xu believed that India has great economic potential in the long run but it's hard for it to change its restrictive development conditions, such as red tape and lagging infrastructure. He mentioned three main global manufacturing networks: Europe, North America and East Asia, saying India is far away from any of the networks, and though India is closer to East Asia, the transport cost is much higher. "I'm afraid that it's difficult for India to become the world's fourth-largest production network on its own."