SUMMARY
India’s average annual GDP growth has been 6.1% for the last 15 years. The nearly $4-trillion developing economy wants to be a developed $55 trillion economy by 2047. India’s GDP has to grow at least 8% every year for the next 25 years to reach the desired goal of being a developed economy, according to former chief economic advisor KV Subramanian, who is now an Executive Director at the International Monetary Fund (IMF). Veteran banker Uday Kotak suggests five fundamental changes that India needs to grow at 8% every year sustainably.
1 / 5Spend more on defence: Kotak emphasised that India needs to increase its defence spending as a percentage of GDP. As India aims to be one of the top three nations globally, it must ensure its presence is recognised in defence alongside military, finance, and creativity. These segments, according to Kotak, are key to the United States’ global dominance. FILE PHOTO: Prime Minister Narendra Modi, Spanish Prime Minister Pedro Sanchez, Defence Minister Rajnath Singh, Gujarat CM Bhupendra Patel, Tata Sons Chairman Natarajan Chandrasekaran during inauguration of TATA Aircraft Complex, in Vadodara, Gujarat, Monday, Oct. 28, 2024. (PTI Photo) (PTI10_28_2024_000122B)
2 / 5Embrace free and fair trade: Kotak stressed that India should no longer rely on protectionism to shield domestic businesses. While the US can afford protectionist policies due to its large economy, India cannot. He envisions an India where businesses are competitive in a free and fair trade environment. For India to truly grow, it needs to focus on building businesses that can compete globally rather than just protecting local players.
3 / 5Improve ROTI (Return on Time Invested): India’s growth hinges on improving its efficiency. Kotak stresses for a change in mindset when it comes to time management. In his view, India has just 23 years to become a developed country, and the key to this is improving ROTI—return on time invested. Faster execution, better project management, and efficiency are essential for long-term success.
4 / 5India’s businesses are quick to spot arbitrage opportunities, but Kotak calls for a shift towards building long-term, sustainable product economies. Rather than chasing short-term gains, Indian companies need to think globally and focus on creating globally competitive products. This change in mindset will drive more innovation and help Indian companies scale in international markets.
5 / 5Support innovation in e-commerce: Kotak noted that e-commerce in India is uniquely successful due to local innovation, but he also pointed out that it could face political challenges in the future.
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