This theme paper was prepared against the backdrop of the CII Annual Session 2019 held from 4-5 April 2019 at New Delhi. It was created around the theme - 5.0: India@75 and Beyond. The salient features of this Paper are -
INDIA: THE PHASES
The various phases India has passed through can be broadly defined as under.
India 1.0 - Before 1947 - Pre-independence
India 2.0 - 1947 – 1991 - Post-independence: laying the foundation
India 3.0 - 1991 - 2014 - Liberalisation: moving to a market economy
India 4.0 - 2014 – 2022 - Digital India: leveraging technology
India 5.0 - 2022 - 2047 - Convergence of India and Bharat: creating an inclusive and developed country
India 1.0 - Before 1947
Colonial India was characterised by de-industrialisation: India’s share in the world economy plummeted from around 24.5% in 1700 to 4.2% in 1950. India shifted from being an exporter of processed goods to an exporter of commodities and importer of manufactured goods. Agriculture – the dominant sector by far – operated at subsistence level. Overall, the economy grew at around 0.6% per annum between 1870 to 1950, with this growth being largely set-off against population increase. In effect, income growth, during this period, was negligible.
India 2.0 - 1947 - 1991
Post-independence India adopted the socialist economic model, with a few elements of capitalism. Centralised planning, nationalisation and a high degree of state intervention across fields defined this period. Consequently, there was extensive public sector ownership and the private sector was subject to severe restrictions giving rise to terms such as license raj and rent-seeking. This, coupled with heavy subsidies for low-skilled industries, resulted in India growing at the infamous ‘Hindu rate of growth’ for most part of this era. At a growth rate of around 3.5% per annum (on a very small base), it took the country 40 years, from 1950 – 51 (Rs 7,114) to 1990 – 91 (Rs 14,330), to double its real per capita GDP.
India 3.0 - 1991 - 2014
1991, a watershed year in Indian economic history, witnessed big-bang reforms: the ‘liberalisation, privatisation and globalisation’ of India. License raj was done away with, foreign investment restrictions eased drastically and the public sector was curtailed. The message: India is open to the world for business. As the reforms began to impact the economy, growth shifted out of the ‘Hindu rate’ to a higher gear. During the latter decade of this period, India established its presence in the global space, taking a leadership position in sectors such as IT / technology and becoming a key player in sectors such automotive.
India 4.0 - 2014 - 2022
As India marches towards its 75th year (2022), the country continues to cement its position as an important player in the global business context. This, complemented with India being amongst the largest consumer markets (actual or potential, depending on the sector) makes the country a formidable economic force.
Leveraging its leadership and prowess in the technology space, India is rapidly embracing the Digital Economy. The ‘Digital economy’ broadly refers to economic processes and activities that are based on digital technologies, i.e. delivering services to consumers and businesses by juxtaposing communication infrastructure and devices with technologies of automation, artificial intelligence, data analytics, software platforms and cloud computing. Public services too have adopted this paradigm, with e-governance continuing to transform traditional systems and processes.
India has emerged as the fastest growing major economy and the sixth largest economy in the world. However, a few challenges persist. India remains a ‘lower middle income’ country, as per the World Bank definition, with an estimated 270 million Indians, that is, 22% of the population, living below the poverty line. Our social indicators need to be improved: India ranks 131 out of 181 countries on the Human Development Index, putting the country alongside Congo, Namibia and Pakistan. Despite India making significant progress in increasing literacy (the literacy rate has risen from low of 18.3% in 1951 to 74.0% in 2011), the country is home to 35% of the world’s illiterate population. The more critical issue, though, is the quality of literacy.
India 5.0 - 2022 - 2047
India@100 (2047) will be very different from the India of 1947. Confident in its demonstrated success, it will emerge as a driver, rather than adopter, of global trends.
India should aim to become an ‘innovation and technology driven, inclusive, socially conscious nation’.
 The Madison Project historical database
 The Madison Project historical database
 Central Statistical Organization: MoSPI
 The Economic Survey of India, 2017-18; Census of India 2011
 ‘266 million adults can’t read, 12 million children out of school: UNESCO’, Mint, 5 December 2017. Based on UNESCO’s Global Education Monitoring report 2017-18