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Introduction

Since the LPG reforms of 1991, India’s GDP has surged from approximately $270 billion to over $3.9 trillion (2024-25). However, this “growth-first” paradigm has faced criticism for creating “jobless growth” and widening the prosperity gap between urban service hubs and the rural hinterland, necessitating a recalibration toward vision 2047.

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Structural Limitations of the Post-1991 Model

• Service-Led Skewness: Growth has been primarily driven by high-skill service sectors (IT/Finance) which contribute significantly to GDP but employ only a fraction of the workforce.
  Eg: The services sector contributes >50% to GDP but employs <30% of the total labor force.
• Missing Middle (Manufacturing): The model bypassed traditional large-scale manufacturing, leaving a vast semi-skilled population stuck in low-productivity agriculture.
  Eg: Manufacturing’s share in GDP has stagnated ~14-17% for decades, failing to replicate the “East Asian miracle” of mass employment.
• Regional Growth Concentration: Liberalization favored states with existing coastal advantages or industrial bases, deepening the “Great Divide” between the South/West and the North/East.
  Eg: Five states (Maharashtra, Tamil Nadu, Karnataka, Gujarat, UP) contribute ~half of India’s GDP, while Bihar’s per capita income remains below 50% of the national average.
• Jobless Growth Trajectory: Capital-intensive industrialization and automation have ensured that even when industry grows, employment elasticity remains poor.
• Informality and Vulnerability: Reforms expanded the private sector but led to “informalization of the formal,” where most new jobs lack social security or long-term contracts.
  Eg: ~90% of India’s workforce remains in the informal sector, lacking the safety nets critical during shocks like the pandemic.
• Ecological Externalities: The Western consumption-led model ignores India’s specific resource constraints, leading to severe land degradation and water stress.

Need for a New Economic Model (Viksit Bharat 2047)

• Labor-Intensive Industrialization: Shifting focus toward MSMEs and “Plug-and-Play” industrial parks to create mass employment for the semi-skilled youth.
  Eg: The PLI Scheme (Production Linked Incentive) across 14 sectors aims to integrate India into Global Value Chains (GVCs) while creating 6 million jobs.
• Rural-Centric Growth: Transforming the rural economy from “subsistence agriculture” to “agri-business hubs” to prevent distressed urban migration.
  Eg: The Agriculture Infrastructure Fund (AIF) is designed to provide debt financing for post-harvest management, turning farmers into “knowledge workers”.
• Balanced Regional Devolution: Moving beyond the “trickle-down” theory to “bottom-up” development through targeted infrastructure in lagging regions.
  Eg: The PM Gati Shakti National Master Plan aims to synchronize logistics infrastructure across the hinterland to reduce regional disparity.
• Human Capital Investment: A shift from “low-cost labor” to “high-value talent” by revolutionizing primary health and vocational education.
  Eg: The National Education Policy (NEP) 2020 focuses on skill-based learning to fix the “employability gap.”
• Sustainability-Linked Economy: Adopting a “Circular Economy” model that decouples growth from resource depletion to meet Net Zero targets.
  Eg: India’s Green Hydrogen Mission represents a strategic shift toward energy independence and green job creation.
• Digital Public Infrastructure (DPI): Leveraging India’s “Tech-Stack” to formalize the economy and ensure direct social justice through saturation of services.

Conclusion

India’s journey toward 2047 must transition from “growth at any cost” to “inclusive and resilient prosperity.” By blending technological innovation with a rural-centric, resource-sensitive approach, India can create a unique “Homegrown Model” that ensures the demographic dividend is not lost to jobless growth but is harnessed for a truly Viksit Bharat.

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