Education, manufacturing transformation key to India becoming developed: NITI Aayog chief executive

New Delhi: India needs to transform its education, energy capacity and manufacturing and achieve a larger scale of urbanisation in order to become a $30 trillion economy by 2047, NITI Aayog chief executive officer B. V. R. Subrahmanyam said on Friday.

Speaking at the annual summit of the Confederation of Indian Industry, Subrahmanyam said that every state and Union territory will have its tailored development road map for 2047 by the end of the year.

To become a developed nation, given the population India will have at that time, it needs to be a $30 trillion economy, and it is hoped that the manufacturing sector should be about 25% of that, he said.

“That means, $7.5 trillion is the goal for manufacturing,” Subrahmanyam added. 

Required growth rate

Subrahmanyam said reaching that level of economic development will require an annual growth rate of 7.5%. In FY24, the economic growth rate was good, he said, referring to the 9.2% growth reported. In FY25, the economy is estimated to have grown by 6.5% as per the second advance estimates released in February. Subrahmanyam said that, to bump up this growth rate, transformation in some key sectors was required. 

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“The first transformation needed is from rural to urban. The level of our urbanisation is very, very low. We are one-third urbanised. We need it to be 50% plus for us to be a developed nation, which means our cities will grow. They will become much larger, modern and many more cities and urban areas will have to come up. That is a challenge,” Subramanyam said.

Urbanisation improving to 50% from 30% will add 20-30 crore more people to the urban areas, which is more than the urban population today, the chief executive said, emphasising the need for planning. 

Transforming energy

“The second transition we need is an energy transition. We have to have an energy transition on a massive scale. That is, we need to enhance our energy capacity. Secondly, make that energy actually carbon-neutral. The third transformation we need to do is the transformation of our education system. Individuals will benefit from growth only if they have education,” said Subrahmanyam.

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He said the rural-to-urban transformation is largely dependent on a change in manufacturing, when people move from agriculture to manufacturing on a large scale.

“It is a big challenge. Manufacturing is around 17% of GDP in India. We need a manufacturing transformation which will take people out of agriculture, move them to manufacturing, which is closely linked to the transformation in education,” Subrahmanyam said. Manufacturing and skilling go together, he said.

The National Manufacturing Mission announced in the budget will probably be announced in about a month, he said. “It will not disturb what existing departments are doing…I think it should be an overarching body, which has the power to give directions, control and ensure things are done,” said Subrahmanyam.

NITI Aayog is working closely with state governments and Union territories, enabling them to develop their individual road maps that will become part of India’s overall development strategy.