{"id":38275,"date":"2025-03-01T18:59:27","date_gmt":"2025-03-01T13:29:27","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=38275"},"modified":"2025-04-16T12:22:31","modified_gmt":"2025-04-16T06:52:31","slug":"india-tariff-cuts-investments-wb","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/01-03-2025\/india-tariff-cuts-investments-wb","title":{"rendered":"India Needs Tariff Cuts, Reforms to Boost Investments: WB"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As per the World Bank\u2019s report (India Country Economic Memorandum), India will need to accelerate reforms to achieve an <strong>average annual growth rate of 7.8%<\/strong> for becoming a<strong> <a href=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/16-09-2024\/indias-path-to-2047-key-parameters-and-challenges\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/16-09-2024\/indias-path-to-2047-key-parameters-and-challenges\">high-income economy by 2047<\/a>.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>From 2000 in real terms,<\/strong> the economy has grown <strong>nearly four-fold,<\/strong> and <strong>GDP per capita has almost tripled.&nbsp;<\/strong><\/li>\n\n\n\n<li>I<strong>ndia grew faster than the rest of the world,<\/strong> its share in the global economy has doubled from <strong>1.6% in 2000 to 3.4% in 2023.&nbsp;<\/strong><\/li>\n\n\n\n<li>India has become the <strong>world&#8217;s fifth largest economy.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Points from the India Country Economic Memorandum:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Target of High-Income Status by 2047: <\/strong>Achievable with ambitious reforms, building on India&#8217;s past growth (6.3% from 2000-2024).<\/li>\n\n\n\n<li><strong>Global Examples:<\/strong> Countries like Chile, Korea, and Poland succeeded in transitioning to high-income by integrating deeper into the global economy.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Growth Scenarios for 2047:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Achieve faster, inclusive growth across states.<\/li>\n\n\n\n<li><strong>Increase total investment<\/strong> from 33.5% to 40% of GDP by 2035.<\/li>\n\n\n\n<li><strong>Raise labor force participation<\/strong> from 56.4% to above 65%.\n<ul class=\"wp-block-list\">\n<li>Overall labour force participation rates have remained low in India compared to countries like Vietnam (73%) and Philippines (60%).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Accelerate productivity growth.<\/li>\n\n\n\n<li>India\u2019s <strong>GNI<\/strong> (gross national income) per capita <strong>must increase nearly 8 times, <\/strong>requiring accelerated growth.<\/li>\n\n\n\n<li><strong>Demographic Dividend: <\/strong>Invest in human capital, create better jobs, and raise female labor force participation from<strong> 35.6% to 50% by 2047.<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Critical Areas for Policy Action:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increase Investment:<\/strong> Strengthen financial sector regulations, ease MSME credit access, and simplify FDI policies.<\/li>\n\n\n\n<li><strong>Create More Jobs: <\/strong>Target job-rich sectors (e.g., agro-processing, hospitality), invest in skills, and foster an innovation-driven economy.<\/li>\n\n\n\n<li><strong>Promote Structural Transformation:<\/strong> Shift labor and resources to higher productivity sectors like manufacturing and services, improve infrastructure, and streamline labor market regulations.<\/li>\n\n\n\n<li><strong>Enable Faster State Growth:<\/strong> Tailor policies for less developed states (focus on fundamentals) and more developed states (focus on advanced reforms and GVC participation).<\/li>\n\n\n\n<li><strong>Federal Support:<\/strong> Incentivize low-income states with federal programs like the Urban Challenge Fund to improve public expenditure, efficiency and accelerate growth.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Classification of Countries by World Bank<\/strong><br>&#8211; The World Bank creates a <strong>yearly classification of countries by income,<\/strong> for all <strong>countries with populations over 30,000.<\/strong><br>1. This classification stays the same throughout the fiscal year (from July 1 to June 30) even if the income data for a country changes.<br>&#8211; <strong>Low-income countries <\/strong>are those with a gross national income (GNI) per capita of <strong>$1,145 or less in 2023<\/strong>.<br>&#8211; <strong>Lower-middle-income countries<\/strong> are those with a<strong> GNI per capita between $1,146 and $4,515 in 2023.<\/strong><br>&#8211; <strong>Upper-middle-income countries<\/strong> are those with a <strong>GNI per capita between $4,516 and $14,005 in 2023.<\/strong><br>&#8211; <strong>High-income countries <\/strong>are those with a <strong>GNI per capita of more than $14,005 in 2023.<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/economy\/accelerated-reforms-india-high-income-status-world-bank-report-9861860\/https:\/\/indianexpress.com\/article\/business\/economy\/accelerated-reforms-india-high-income-status-world-bank-report-9861860\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As per the World Bank\u2019s report (India Country Economic Memorandum), India will need to accelerate reforms to achieve an average annual growth rate of 7.8% for becoming a high-income economy by 2047.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-38275","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/38275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=38275"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/38275\/revisions"}],"predecessor-version":[{"id":41270,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/38275\/revisions\/41270"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=38275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=38275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=38275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}