Shaktikanta Das, Principal Secretary-2 to the Prime Minister of India, announced that the country is on the verge of achieving 8% GDP growth, attributing this resilience to comprehensive reforms and strategic initiatives aimed at sustainable development.
New Delhi: In a significant address at the Kautilya Economic Conclave on Sunday, Shaktikanta Das, Principal Secretary-2 to the Prime Minister of India, conveyed that India is nearing an impressive 8% gross domestic product (GDP) growth. He asserted that this growth trajectory is not a result of chance but stems from a series of broad, mutually reinforcing reforms intended to transform India into a developed nation by the year 2047.
Key Areas of Economic Focus
Das identified five pivotal areas that are expected to catalyze economic activity: artificial intelligence (AI), deepening the financial sector, fostering strategic self-reliance (atmanirbharta), promoting sustainable development, and enhancing human capital. He highlighted that these sectors are instrumental in navigating the current global economic landscape, which is rife with uncertainties.
Global Economic Context
According to Das, the prevailing global economic environment is characterized by geopolitical tensions, including wars and conflicts, fragmentation, unilateralism, energy price volatility, and rising inflation. He cautioned that these factors could severely stifle global economic growth and prompt central banks around the world to adopt restrictive monetary policies. A critical concern he raised was the high levels of public debt in many developed economies, which are leading to increasing bond yields and diminishing fiscal space, thereby reducing these countries’ ability to respond to ongoing and future economic shocks.
India’s Economic Performance
In stark contrast to these global challenges, India has exhibited remarkable resilience, with a reported real GDP growth of 7.8% in the first quarter of the fiscal year 2027. This growth has been primarily driven by robust domestic demand and favorable investment conditions. Das attributed this resilience to three fundamental factors: strengthening governance and state capacity, building macroeconomic stability, and making investments in long-term productive capacity.
He stated, “A distinguishing feature of India’s development journey in the last twelve years has been the gradual creation of governance foundations before the crisis actually emerged.” This includes implementing flexible inflation targeting, adhering to fiscal prudence, instituting tax reforms, and improving the quality of government expenditure, all of which have contributed to enhancing macroeconomic stability.
Infrastructure Development and Citizen Engagement
Over the past decade, significant advancements in public infrastructure, financial inclusion, housing, sanitation, digital services, and welfare delivery have fostered stronger engagement between citizens and the state. Das argued that when citizens experience tangible improvements in their lives, their confidence in government institutions increases, which is crucial for facilitating necessary reforms. He noted that a vital aspect of India’s recent development has been its success in extending governance and economic opportunities to regions previously marginalized by left-wing extremism and terrorism.
Stability in Fiscal and External Sectors
Das emphasized that the adoption of Flexible Inflation Targeting (FIT) in 2016 has been essential for India in navigating a series of shocks, including the COVID-19 pandemic and geopolitical conflicts in Ukraine and West Asia. He noted the government’s sustained commitment to fiscal consolidation, balancing the reduction of the fiscal deficit without compromising on growth-inducing expenditures. He explained, “India’s external sector indicators have remained broadly resilient due to a mix of factors like the ongoing diversification of exports, the conclusion of free trade agreements (FTAs), sustained surplus in services trade, and steady inward remittances.”
Addressing Current Economic Shocks
When asked whether additional measures were necessary to address current economic shocks, Das acknowledged the ongoing need for improvement, stressing the government’s focus on enhancing domestic capabilities, particularly in areas where India remains significantly import-dependent, such as energy and fertilizers. He cited the government’s initiative to develop domestic capacity in rare earth permanent magnets as a critical response to reduce reliance on imports, particularly from China, which dominates global supply chains for these essential components.
Future Directions for Growth
In his address, Das outlined the government’s strategic approach to maintaining reform momentum as India progresses toward its goal of becoming a developed nation by 2047. He emphasized the importance of harnessing artificial intelligence, securing long-term finance, fostering strategic self-reliance, and pursuing sustainable development. “Atmanirbharta does not imply isolation,” he clarified. “Rather, it stands for building stronger domestic capabilities while remaining integrated with global markets.”
Das underscored the necessity for India to enhance its presence in global supply chains, expand strategic manufacturing, and cultivate critical technologies domestically. He outlined that the next phase of growth will be driven by initiatives such as the National Green Hydrogen Mission, electric mobility projects, energy-efficient infrastructure, sustainable agricultural practices, and embracing circular economy principles.
In conclusion, Das’s insights reflect an optimistic outlook for India’s economy, underscoring the importance of sustained reform efforts and proactive measures to navigate both domestic and international challenges. The commitment to fostering resilience and sustainable growth positions India favorably on its path toward achieving its long-term developmental goals.
