The golden era of Indian economy

The Border Security Force Camel Band parades on Republic Day at Rajpath, New Delhi, India, Jan. 26, 2015. (Wikimedia Commons)
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Updated 25 January 2023
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The golden era of Indian economy

  • The India of 2023 is very different from the India of 1947, and the India of 2047 will be different from the India of 2023
  • There is certainly much that is uncertain in the world, but there is also much of which we can be certain; within that band of certainty, it is impossible to dispute India’s inexorable economic rise

India recently celebrated 75 years of independence. The idea of “Amrit Kaal” builds on this with a road map for the next 25 years, taking us to 2047 when India will celebrate 100 years of independence.

The India of 2023 is, of course, very different from the India of 1947, and the India of 2047 in turn will be different from the India of 2023 in ways few can anticipate and project; if one casts one’s mind back, how many would have guessed the changes wrought in India over the past 25 years?

The world is an uncertain place, and in the long term even more so. While the future is always uncertain, the current state of the world has been permeated with an additional dose of uncertainty as a result of factors such as the COVID-19 pandemic, geopolitical tensions, the collapse of the multilateral system and regionalism, the retreat of advanced countries from globalization, and the dreaded warnings of “recession” in some of those countries.

These are external shocks that have been thrust on India, as they have on many emerging market economies, and underline the collapse of institutions that provide global public good, the Bretton Woods institutions included.

Global governance has yet to accept the rise of economies such as India. Lord Keynes is often quoted, usually out of context, as sharing the cliche: “In the long run we are all dead.” If one reads the complete text (“The Tract on Monetary Reform,” 1923), one will find his intention was not quite what this out-of-context quote might convey.

There is certainly much that is uncertain in the world, at present and for the long term. But there is also much of which we can be certain. Within that band of certainty, it is impossible to dispute India’s inexorable economic rise.

Much was made of the Goldman Sachs report “Dreaming with BRICS: The path to 2050,” when it was published in 2003. BRICS refers to the leading emerging economies of Brazil, Russia, India, China and South Africa.

It predicted an average real rate of gross domestic product growth in India of about 5.5 percent, with the rise in aggregate GDP and per capita GDP by 2050 explained by the nature of the exponential function.

The report did not include a projected figure for 2047 specifically but did give one for 2045: It predicted that India’s aggregate GDP would be $18.8 trillion, with per capita GDP of just over $12,000.

None of the reasons behind these optimistic projections have been nullified by the current global uncertainty — increase in savings/investment rates as a result of demographic transition and income growth, growth drivers in more efficient land, labor and capital markets and productivity enhancement.

To use an economist’s expression, India is still within the production possibility frontier, not on it. To put it another way, aggregate growth for India is a summation of growth in states, and states are within their respective frontiers, providing plenty of endogenous slack for growth.

Had events in the external world been more benign, India might have grown at 9 percent. Typically, one tends to extrapolate the gloominess of the present into the future. It is by no means obvious that global conditions will continue to be difficult for the next 25 years. But even if that were to be the case, India still might not grow at 9 percent. What growth rate seems reasonable, therefore?

The answer depends on the person making the projection and the assumptions that are made. A nominal figure depends on assumptions about inflation, which is why projections are often presented in real terms, in today’s dollars. A dollar figure also depends on assumptions about the dollar/rupee exchange rate, which is why projections are often based on the current exchange rate (the Goldman Sachs report assumed appreciation of the rupee vis-a-vis the dollar.) A prediction based on purchasing power parity is, naturally, different.

With inflation and exchange rate fluctuations out of the way, then, what trajectory of real growth in India sounds reasonable? The pessimistic forecaster will point to domestic inefficiencies and the state of the wider world and opt for 5.5 percent. The optimistic forecaster will point to empowerment through easier living and the provision of basic necessities, greater ease of doing business, supply-side reforms, and the government’s capital expenditure and opt for 7.5 percent.

That is the rough range of growth to consider, with recognition that as an economy grows, growth rates slow. As one moves up the development ladder, it becomes more difficult to grow as quickly, with the caveat that different states are at different levels of development and so there is plenty of slack.

To return to long-term uncertainty, one can plug in one’s own assumptions about real growth, say something like 6.5 percent, midway between the extremes of 5.5 percent and 7.5 percent. Based on that, India’s per capita income in 2047 would be something like $10,000 and the total size of the economy will approach $20 trillion.

These figures are broadly in the same range as the Goldman Sachs predictions, in which the role of exchange rate appreciation was relatively greater. In such projections, the role of real growth is relatively more.

If reforms succeed in driving economic growth higher than 6.5 percent — and such a “citius, altius, fortius” (faster, higher, stronger) possibility cannot be ruled out — the corresponding numbers will be higher.

Even with the relatively conservative figures, however, India would be the third-largest economy in the world, after the US and China, and this will naturally be reflected in India’s global clout. In a purchasing power parity ranking, India would be second-largest after China.

India’s annual rate of population growth has slowed and is now less than 1 percent. Nevertheless, in 2047, it will be the most populous country in the world, with a population of about 1.6 billion.

Expressions such as “developed country” are rarely used these days and the term no longer has a specific definition. The World Bank instead uses terms such as “middle-income.” India is currently classified as a lower-middle-income economy. By 2047, it will have moved to upper-middle-income classification.

When a country approaches a per capita income of $13,000, its status shifts to high-income. That will be when India can be said to be “developed.” In 2047, India will still fall short of this but the face of poverty in the country, as we know it, will have been completely transformed.

The measurement of poverty is based on the notion of a “poverty line” and, by using a multi-dimensional poverty index, the UN Development Program recently documented a sharp drop in the number of people in India categorized as “poor.”

As economies develop, the position of a poverty line of course shifts upward, beyond merely a subsistence level of consumption. Officially, however, the poverty line that continues to be used in India is still the Tendulkar poverty line. Unfortunately, consumption expenditure data, which is used to measure poverty, does not exist beyond 2011/12. Therefore different analysts now use different assumptions to measure poverty.

If, for example, one uses periodic labor force survey data and the Tendulkar poverty line, the poverty ratio (the percentage of the population below the poverty line) is currently about 17 percent. By 2047, it is forecast that this will have fallen to about 5 percent.

Sustainable Development Goal reports, among other analyses, have documented pockets of deprivation in specific geographical regions, which have been targeted by the government through its Aspirational Districts Program. India is a heterogeneous society and so despite the provision of basic necessities — such as physical and social infrastructure, financial inclusion, access to markets, technology and digital access — and an overall message of empowerment, there will continue to be pockets of poverty in the country, even in 2047.

But the nature of that poverty will be very different compared with today. India will have achieved universal literacy, or be pretty close to it. UNDP uses the Human Development Index, an aggregate measure, to gauge the development of people beyond poverty ratios. Currently, India is in the medium category of human development, based on HDI. By 2047, it will rank in the high category of human development.

There are five transitions underway and these will be even more pronounced by 2047. Firstly, there is a rural-to-urban shift, and urbanization correlates with development. By 2047, almost 60 percent of India’s population will be urbanized. It is predicted that Delhi and Kolkata will have populations of about 35 million, and Mumbai more than 40 million. The mind boggles at such figures and government programs are being developed with the aim of ensuring urbanization is better managed.

Secondly, there will be greater formalization of the economy. Such formalization is another factor that correlates with growth and development. Employees will have formal job contracts. Micro, small and medium enterprises will be legally registered. Indian companies will become larger, more efficient, and fully integrated into global supply chains.

Thirdly, the percentage of the population that earns a living from agriculture will decline. Agriculture’s share in gross domestic product will decline to something like 5 percent, and the percentage of the population earning a living from agriculture will not be more than 20 percent. Fourthly, there will be a shift in agriculture toward commercialization, diversification and larger farms.

Fifthly, there will be greater participation of citizens in governance, in keeping with the theme of “sabka prayas” (everyone’s effort). For years, there was a colonial chip on the nation’s shoulder. But present-day India is a proud India, a resilient India, an aspiring India. Amrit Kaal reflects that, and the country is making great strides on economic fronts, with greater confidence and entrepreneurship.

  • Bibek Debroy is the chairman of the Economic Advisory Council to the Prime Minister in the Government of India.

Russia says it downed hundreds of Ukrainian drones, briefly halts Moscow airports

Updated 54 min ago
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Russia says it downed hundreds of Ukrainian drones, briefly halts Moscow airports

  • Russia’s Defense Ministry said on Telegram that at least 262 Ukrainian drones were intercepted or destroyed
  • Most were over Russia’s western regions bordering Ukraine and central Russia

MOSCOW: Russia said on Wednesday that its air defenses shot down more than 260 Ukrainian drones including some approaching Moscow, and the capital’s airports were briefly shut down to ensure the safety of flights.

There were no reports of casualties.

As Russia, Ukraine, the United States and European powers discuss ways to end the more than three-year-old conflict in Ukraine, fighting has intensified on some parts of the front and drone warfare has continued.

In a series of announcements, Russia’s Defense Ministry said on Telegram that at least 262 Ukrainian drones were intercepted or destroyed on Wednesday. Most were over Russia’s western regions bordering Ukraine and central Russia.

But some approached the Moscow region where 21 million people live. The three major airports in the region halted flights briefly then resumed operations.

Ukraine’s military said its drones hit the Bolkhovsky Semiconductor Devices Plant, a supplier in the Oryol region to Russian fighter jet and missile makers.

The war in Ukraine, which has killed hundreds of thousands of people, has become a crucible of drone innovation as both sides send the unmanned vehicles far behind the front lines.

Moscow and Kyiv have sought to buy and develop new drones, deploy them innovatively and devise new methods to disable and destroy them, from farmers’ shotguns to electronic jamming.

Russia’s Defense Ministry said its forces were advancing at key points along the front, and pro-Russian war bloggers said Russia had pierced the Ukrainian lines between Pokrovsk and Kostiantynivka in the Donetsk region of eastern Ukraine.

Ukrainian President Volodymyr Zelensky said in his nightly video address the heaviest frontline battles were around Pokrovsk and made no reference to any Russian advances.

Zelensky said Ukrainian forces remained active in two Russian regions along the border — Kursk and Belgorod.

Reuters could not independently verify battlefield accounts from either side.


Irish rapper charged over Hezbollah flag at London concert: police

Updated 21 May 2025
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Irish rapper charged over Hezbollah flag at London concert: police

  • Liam O’Hanna, 27, known by his stage name Mo Chara, is accused of showing support for a proscribed group

LONDON: A member of Irish rap group Kneecap has been charged with a terror offense for allegedly displaying a Hezbollah flag at a London concert, police said on Wednesday.
Liam O’Hanna, 27, known by his stage name Mo Chara, is accused of showing support for a proscribed group during a performance on November 21.
London’s Metropolitan Police said officers from its Counter Terrorism Command launched an investigation after a video of the event surfaced online in April.

Early in May, the British counter-terrorism police launched an investigation into online videos of Irish rappers Kneecap after the band denied supporting Hamas and Hezbollah or inciting violence against UK politicians.

The announcement came as nearly 40 other groups and artists, among them Pulp, Paul Weller and Primal Scream, rallied around the band amid an escalating row about political messaging at its concerts.


Japan flexes defense ambitions at arms show

Updated 21 May 2025
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Japan flexes defense ambitions at arms show

  • Japan has been gradually stepping back from the pacifism that was the cornerstone of decades of defense planning after the country’s defeat in World War Two

TOKYO: Japan opened one of its largest-ever arms shows on Wednesday in a display that Defense Minister Gen Nakatani said marked the pacifist nation’s deepening push for overseas defence cooperation and weapons exports.

The DSEI Japan exhibition near Tokyo showcased Japanese missiles, warships and research into lasers and electromagnetic railguns. 

The event, double the size of the 2023 show, drew 471 firms from 33 countries, including 169 from Japan — twice as many as two years ago, according to organizer Clarion Defense & Security.

“I sincerely hope that this exhibition will provide a new opportunity for cooperation and exchange between national delegations and companies, help sustain defense industry development, drive innovation and promote peace and stability,” Nakatani said during a speech at the event.

Japan has been gradually stepping back from the pacifism that was the cornerstone of decades of defense planning after the country’s defeat in World War Two.

It lifted a military export ban in 2014, and is taking its first steps into global defense cooperation encouraged by the United States and European partners eager to share development costs and tap Japan’s industrial base.

“Strength comes from expanding and elevating the alliance’s capabilities and capacity, which means leveraging our respective skills and our specialties in co-development, co-production, and co-sustainment,” US Ambassador to Japan George Glass said as he opened the DSEI US pavilion.


Putin visited Russia’s Kursk region for first time since Moscow said it drove out Ukrainian forces

Updated 21 May 2025
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Putin visited Russia’s Kursk region for first time since Moscow said it drove out Ukrainian forces

  • Putin’s unannounced visit appeared to be an effort to show Russia is in control of the conflict
  • Video broadcast by Russian state media showed that Putin visited Kursk Nuclear Power Plant-2

MOSCOW: President Vladimir Putin visited Russia’s Kursk region for the first time since Moscow claimed that it drove Ukrainian forces out of the area last month, the Kremlin said Wednesday.

Putin visited the region bordering Ukraine the previous day, according to the Kremlin.

Ukrainian forces made a surprise incursion into Kursk in August 2024 in one of their biggest battlefield successes in the more than three-year war. The incursion was the first time Russian territory was occupied by an invader since World War II and dealt a humiliating blow to the Kremlin.

Since the end of 2023, Russia has mostly had the advantage on the battlefield, with the exception of Kursk.


Putin has effectively rejected recent US and European proposals for a ceasefire. Russian Foreign Minister Sergey Lavrov on Wednesday accused Kyiv’s allies of seeking a truce “so that they can calmly arm Ukraine, so that Ukraine can strengthen its defensive positions.”

North Korea sent up to 12,000 troops to help the Russian army take back control of Kursk, according to Ukraine, the US and South Korea. Russia announced on April 26 that its forces had pushed out the Ukrainian army. Kyiv officials denied the claim.

Ukraine says it stopped Russian attacks in Kursk

The Ukrainian Army General Staff said Wednesday that its forces repelled 13 Russian assaults in Kursk. Its map of military activity showed Ukrainian troops holding a thin line of land hard against the border but still inside Russia.

Putin’s unannounced visit appeared to be an effort to show Russia is in control of the conflict, even though its full-scale invasion of its neighbor has been slow and costly in terms of casualties and equipment.

Video broadcast by Russian state media showed that Putin visited Kursk Nuclear Power Plant-2, which is still under construction, and met with selected volunteers.

Many of the volunteers wore clothes emblazoned with the Russian flag, some had the Latin letters “V” on them, one of the symbols of Russia’s invasion of Ukraine.

“What you are doing now during this difficult situation for this region, for this area, and for the country, will remain with you for the rest of your life as, perhaps, the most meaningful thing with which you were ever involved,” Putin said as he drank tea with the volunteers.

Ukraine’s surprise thrust into Kursk and its ability to hold land there was a logistical feat, carried out in secrecy, that countered months of gloomy news from the front about Ukrainian forces being pushed backward by the bigger Russian army.

Kyiv’s strategy aimed to show that Russia has weaknesses and that the war isn’t lost. It also sought to distract Russian forces from their onslaught in the eastern Donetsk region of Ukraine.

The move was fraught with risk. Analysts noted that it could backfire and open a door for Russian advances in Ukraine by further stretching Ukrainian forces that are short-handed along the roughly 1,000-kilometer (620-mile) front line.

The incursion didn’t significantly change the dynamics of the war.

Putin told acting Kursk Gov. Alexander Khinshtein that the Kremlin supported the idea of continuing monthly payments to displaced families that still couldn’t return to their homes.

Putin said that he would back a proposal to build a museum in the region to celebrate what acting Gov. Alexander Khinshtein described as “the heroism of our defenders and the heroism of the region’s residents.”

Disgruntled residents had previously shown their disapproval over a lack of compensation in rare organized protests.

Putin last visited the Kursk region in March, when Ukrainian troops still controlled some parts of the area. He wore military fatigues – a rarely seen sight for the Russian leader, who usually wears a suit – and visited the area’s military headquarters where he was filmed with top generals.

Russia and Ukraine continue deep strikes with drones

Russia’s Ministry of Defense on Wednesday repeatedly reported its air defenses shot down dozens of drones over multiple Russian regions. In total, between 8 p.m. on Tuesday and 6 p.m. on Wednesday, the ministry said 262 drones were shot down.

Moscow Mayor Sergei Sobyanin reported a total of 16 drones downed on their way toward Moscow, and during the day flights were briefly halted in and out of Moscow’s Domodedovo, Sheremetyevo and Zhukosky airports, according to Russia’s civil aviation authority Rosaviatsiya. Flights were also temporarily grounded in the cities of Ivanovo, Kaluga, Kostroma, Vladimir and Yaroslavl.

Local authorities in the regions of Tula, Lipetsk and Vladimir also announced blocking cell phone Internet in the wake of the drone attacks.

In Ukraine, Russian drone attacks killed two people and wounded five others in the northern Sumy region, the regional administration said.

In the Kyiv region, four members of a family were injured when debris from a downed drone hit their home, according to the regional administration.

Russia launched 76 Shahed and decoy drones overnight at Ukraine, the Ukrainian air force said.

The Ukrainian army said that its drones struck a semiconductor plant overnight in Russia’s Oryol region, about 150 kilometers (90 miles) northeast of Ukraine. According to the General Staff, 10 drones hit the Bolkhov Semiconductor Devices Plant, one of Russia’s key producers of microelectronics for the military-industrial complex.

It wasn’t possible to independently verify the claim.


Trump plays video in Ramaphosa meeting to back ‘genocide’ claims

Updated 21 min 25 sec ago
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Trump plays video in Ramaphosa meeting to back ‘genocide’ claims

  • Julius Malema was shown singing ‘Kill the Boer, kill the farmer’ — an infamous chant dating back to the apartheid-era fight against white-minority rule
  • Another clip showed former South African president Jacob Zuma singing an anti-apartheid song that threatens white people

WASHINGTON: US President Donald Trump surprised his South African counterpart Cyril Ramaphosa during a White House meeting Wednesday by playing him a video designed to back baseless claims of a white “genocide.”

Trump asked staff members to play a video on a screen set up in the Oval Office showing Ramaphosa — and the gathered global media, golfers Ernie Els, Retief Goosen and businessman Johann Rupert — what he said were clips of black South Africans talking about the issue, including images of what the US president called “burial sites.”

In the video, firebrand far-left opposition lawmaker Julius Malema was shown singing “Kill the Boer, kill the farmer” — an infamous chant dating back to the apartheid-era fight against white-minority rule.

The chant is highly controversial in South Africa and was banned by a court in 2010.

However a court in 2022 said that it did not constitute hate speech and should be considered in its historical context.

In 2024 the Supreme Court of Appeal, seized by a right-wing Afrikaner lobby group, ruled that Malema should be allowed to continue to use the song.

“Mr Malema was not actually calling for farmers, or white South Africans of Afrikaans descent, to be shot,” it said.

He “was using a historic struggle song as provocative means of advancing his party’s political agenda,” the ruling said.

Malema has been a loud and radical voice in South African politics for several years, but his Economic Freedom Fighters (EFF) party came only fourth in last year’s elections with less than 10 percent of the vote.

The 4:30-minute video aired in the White House showed clips of Malema telling dancing supporters that “we are cutting the throat of whiteness,” and “to shoot to kill.”

“We have not called for the killing of white people, at least for now,” Malema said in one archival clip.

Another clip showed former South African president Jacob Zuma singing an anti-apartheid song that threatens white people with being shot by a machine gun.

The video finished with images of a 2020 protest in South Africa where white crosses were placed along a rural roadside to honor a couple who were murdered on their farm in the east of the country.

Viral social media posts, some included in the video, have falsely claimed that dozens of white farmers are killed every day.

But figures from groups representing farmers and Afrikaner interests show that around 50 people of all races are killed on farms every year.

Overall, about 75 people are murdered every single day in South Africa, most of whom are young black men in urban areas, according to police figures.