The Indian government has been dreaming of the Indian economy becoming a $5 trillion one by 2025. No wonder, it is a very ambitious goal. But, keeping feet on the ground, is it possible and feasible to reach the target?
India’s current GDP is likely to trend around $3 trillion in FY2022. We are targeting to add another $2 trillion to the Indian economy to reach $5 trillion by FY2025 i.e., in another three years. That’s almost an 18% compounded annual growth rate (CAGR). The Asian Development Bank (ADB) forecasts India’s GDP growth to moderate to 7.5% in 2022-23 from an estimated 8.9% in 2021-22 but says that it will pick up to reach 8% in 2023-2024.
RBI’s latest estimate for GDP growth in India in 2022-23 is 7.2%, down from the 7.8% estimated in February. Even more worrying, though, is its inflation projection — an average of 5.7% in 2022-23, up from the 4.5% projected in February. Both estimates assume the average price of oil at $100 a barrel.
Fuel crisis speeds up EV sales
At this moment we see two headwinds for the Indian economy, the fourth wave of the pandemic, and global commerce disrupted by the Ukraine-Russia conflict. Global growth is expected to shrink by 1% per World Bank, and India will not remain insulated from the adverse impacts. The wild swings in oil prices are a major destabilizing factor for the Indian economy. However, one expects this to accelerate the adoption of electric vehicles (EV).
We have already noticed the signs as the electric vehicle industry in India ended the fiscal FY22 on a high note as the total registered EV volumes (all segments) reported strong growth at 4.3 lakh units compared to 1.3 lakh units in FY21. March 2022 saw the highest-ever monthly registered volumes at 77,128 units, an increase of about 43 per cent over February 2022 numbers and a 196 per cent jump over March 2021 volumes.
Global GDP stalling
The war is dislocating supply chains of key manufacturing inputs, including semiconductors. Major shipping and airline routes are also disrupted causing supply chain shocks. The global GDP growth outlook is stalling. Though positive GDP growth is forecast in all countries, the outlook is more uncertain; the 2022 consensus forecast for global GDP growth is currently 3.8%.
Sector-wise share of Indian GDP
In 2020, almost half of India’s GDP was generated by the services sector, a slight and steady increase over the last 10 years. Among the leading services industries in the country are telecommunications, IT, and software.
40% of employment is in agriculture
Nevertheless, agriculture continues to employ the largest share of the population. Although employment figures in IT, and thus in the services sector, are on the rise, most of the Indian workforce is still employed in agriculture, however, the figures show a trend pointing towards a reversal of this distribution. For now, most Indians still do not live in cities – where IT jobs are generated – but urbanization is on the rise as well.
The agriculture sector of India had the highest number of employees amounting to nearly 152 million as of the financial year 2021. Despite the coronavirus pandemic’s negative impact on the country’s GDP, this was the only sector that saw an increase in its employment trend. With a year-on-year growth rate of 4.1%, the sector accounted for almost 40% of employment in India during that year.
The world goes hungry
A 2020 World Bank report found that nearly 690 million people–or 8.9% of the global population–are hungry, up by nearly 60 million in five years. The Global Hunger Index 2020 ranks India at 101 out of 116 countries on the basis of three leading indicators — prevalence of wasting and stunting in children under 5 years, under 5 child mortality rate, and the proportion of undernourished in the population. Per the Nutrition in the World, 2020 report, 189.2 million people are undernourished in India; 14% of the population is undernourished in India. Also, 51.4% of women of reproductive age between 15 to 49 years are anaemic.
40% of food is wasted
On the other hand, it is estimated that nearly one-third of the food produced in the world for human consumption every year gets lost or wasted. Nearly 40% of the food produced in India is wasted every year due to fragmented food systems and inefficient supply chains — a figure estimated by the Food and Agricultural Organization (FAO). This is the loss that occurs even before the food reaches the consumer. Simply by preventing waste the world food crisis can be prevented.
Digital India & agritech
While we continue to discuss the digitization of the manufacturing, and services sector, the biggest impact in terms of addressing the employment challenge, and the food crisis can be achieved through the introduction of technology in agriculture, across the value chain from production, financing, to pricing and marketing – farm to fork! Simultaneously agriculture can be a platform to turn our young farmers into digitally dexterous agricultural agriculturalists – creating the foundation of a digital revolution in India.
The emerging technology known as precision agriculture is ushering in a much-needed paradigm shift in farming and ranching practices that promises many competitive advantages, including maximizing resources, optimizing crop and livestock yields, cutting costs, and preserving the environment.
5G in agriculture
5G will represent around 26% of mobile subscriptions in India at the end of 2026, estimated at about 330 million subscriptions. Powered by high-speed 5G connectivity, precision agriculture enables IoT and robotic devices to perform a wide array of time-and labour-intensive farming and ranching activities in real-time, around the clock, even in harsh conditions. Here are some of the ways that IT-driven devices and equipment interoperability can cost-effectively boost productivity, food security, and traceability through the supply chain, among other benefits:
- Unmanned tractors can autonomously plough rows and rows of farmland using GPS and computer vision for guidance
- Harvesters and offloading systems can use sensors and machine-to-machine communications to cost-efficiently manage farm operations and share data about the volume of crops being harvested
- Devices can gather, track, and share key metrics from the field about conditions like soil health, pests, and crop quality so that remote staff can modify equipment settings and processes to optimize productivity
- Autonomous ground robots can autonomously regulate how and when dairy cows move to and from automated milking machines
- Leveraging machine learning, robots can perform a variety of tasks, such as bruise-free picking and harvesting, and identifying and measuring the ripeness of fruit to minimize fruit decay and spoilage.
- Drones and autonomous driving vehicles can perform tasks that are difficult, dangerous, or impossible for workers to do safely
IoT in agriculture
Current farming is not sustainable largely due to inefficient usage of resources. The information generated by the Internet of Things (IoT) devices on the farms is captured and made available by the LTE and IoT platform infrastructure. Agribusiness experiences an increase in productivity reduced operational costs and optimized allocation of equipment and machinery. There is also the potential to develop innovative use cases with the agriculture ICT ecosystem.
The feasibility of the $5 trillion Indian economy target might be questionable, nevertheless, the government needs to urgently create a digital infrastructure to reach connectivity across the country and enable access to devices. Connecting every school is essential. It must change its curriculum to develop industry-relevant skills, and to create a digitally literate pool of talent.
Urgent steps are needed to create industry-academia linkage to develop future-ready skills. This should start with changing the curriculum and training the teachers to deliver new learning. The future of work will be largely automated. It is therefore essential to develop skills that cannot be performed by machines.
(Abhijit Roy is a technology explainer and business journalist. He has worked with Strait Times of Singapore, Business Today, Economic Times and The Telegraph. Also worked with PwC, IBM, Wipro, Ericsson.)
(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Autofintechs.com. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)