A new report from the World Bank says that India’s economy will be “in a far better shape” by 2030 than it was under former Prime Minister Manmohan Singh.
The report says that the economy would expand by around 5 per cent annually, which is the fastest rate in the world.
However, this is in spite of a huge shortfall in spending on infrastructure.
It also says that spending on basic services, including education and health, will remain at about the same level as it is now.
The World Bank said it is not only the infrastructure that has to improve.
There is also a need for a radical rethink on how much the country should spend.
It says India’s “modernisation” programme, which began under Mr Singh, has failed to achieve much.
This is partly because it has not been able to focus on the “very large and critical” investments that have to be made to get the economy out of the “slowly deteriorating” situation it is in.
India’s GDP is projected to grow at just 2 per cent in 2030.
“The slow decline in investment activity, and a lack of political will to reform the way India is run, have caused the slowdown to accelerate.
The slow-growth trajectory is not sustainable for the long term,” the report says.
“India’s economy must be modernised in order to become a fully-fledged global economy.”
The World Development Report says that “India has one of the world’s largest and most rapidly growing populations, yet its economy has been in a steady decline since 2000.”
India has also not been very open to investment.
The government has not allowed foreign direct investment (FDI) since 2001.
And it has made a habit of allowing foreign firms to do business in the country only if they are doing so for a profit.
“This is a recipe for a slow decline,” the World Development report says, adding that the government has “failed to address the problem of corruption, lack of accountability and lack of investment”.
“It has created a situation in which investors, despite the government’s best efforts, have not found opportunities to invest,” the document says.
The Government of India has a big debt load.
Its total debt is now about $7.6 trillion.
The country’s gross national product (GNP) is estimated to be around $5.3 trillion.
In 2019, the Reserve Bank of India (RBI) forecast a gross domestic product ( GDP) growth rate of 5.8 per cent.
However the World Economic Forum said that growth will likely be below 6 per cent this year and next.
“There are two problems with the economy: low investment and corruption.
Both of these are contributing to the country’s low growth prospects,” said the report.