India’s $10 Billion Economy Dream Risks Turning Into Nightmare

According to the Center for Economics and Business Research, Modi's economy will be among the three biggest within 15 years.

The headlines generated by the London-based predictions couldn't be better for Modi. India will leapfrog to the top three globally if it grows about 6.5% annually over the next 10 years, according to the argument made by CEBR.

India will rise from fifth place on the World Economic League Table in 2022 to third in the global rankings by 2037. We predicted that India would become the third $10 trillion economy by 2035. There are political factors that may hold India back.

Political factors anddemographics could make things difficult. India's per capita income should not be affected by the rate of GDP growth.

India has ademographic dividend. With more than half the population under 25 and a national median age of 28.4, India's swelling labor force is an asset as workers in Japan, China and South Korea get greyer and greyer. If Modi's government picks up the pace of job creation, it will be an asset.

There aren't many signs that Modi has a plan to increase economic efficiency, cut red tape, increase productivity and invest in improved education and training. These micro economic upgrades are hard for any Asian leader to pull off in the best of times, even though global inflation and major central banks are hiking interest rates.

Modi prioritized macroeconomic success over efforts to level India's playing fields. The Modi era has generated decent top-line growth but lags where it really matters: ensuring all Indians enjoy the fruits of fast economic growth.

India hitting $10 billion is exciting, but it misses the point that it doesn't need to grow faster. He believes that even regional patterns could turn India's demographic dividend into a permanent demographic divide.

He has experience in many areas. He was an Indian minister of state for external affairs, a minister of human resource development, and a National Congress parliament member. While India's northern states have already Stabilized, in some states, likeKerala in the south and Nagaland in the northeast, the population has already begun to Shrink. Baby booms may occur in parts of India while other regions deal with aging populations.

There are both opportunities and challenges to population growth. The population is expected to grow to 1.7 billion over the next four decades before falling to 1.1 billion by the end of the century. Mortality and fertility are expected to decline. India has a small window of opportunity to harness the growth of its productive labor force to boost economic development.

It is not saying if Modi has a plan to make up for lost time to do that. The author of "China in India's Post-Cold War Engagement with Southeast Asia" asks if the rhetoric of India's foreign policy aspires match the reality of the country's domestic reform.

It's not much when you consider the barriers that keep wealth concentrated. Despite the government projecting a more investor-friendly image, the country's historically protectionist and conservative economic policies remain well entrenched.

The pro-business Modi era is included. Modi made some structural changes on the board. Aviation, defense and insurance are open to increased foreign investment. A national goods-and-service tax was passed by his government.

There are bigger and riskier moves to alter power dynamics in sectors such as labor, land, taxation and corruption. Efforts to get bad loans off the balance sheets of state banks must be stepped up. Modi has yet to unleash a regulatory big bang that would allow entrepreneurs to grow, flourish and disrupt the economy.

India is moving closer to top-three economy status along with the US and China. It doesn't matter if the majority of Indians are left behind. If Modi doesn't speed up reforms, future generations will be left behind.