Economic Outlook

After real GDP contracted in FY20/21 due to the COVID-19 pandemic, growth bounced back strongly in FY21/22, supported by accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, in 2022, India emerged as one of the fastest growing economies in the world, despite significant challenges in the global environment – including renewed disruptions of supply lines following the rise in geopolitical tensions, the synchronized tightening of global monetary policies, and inflationary pressures.

In FY22/23, India’s real GDP expanded at an estimated 6.9 percent. Growth was underpinned by robust domestic demand, strong investment activity bolstered by the government’s push for investment in infrastructure, and buoyant private consumption, particularly among higher income earners. The composition of domestic demand also changed, with government consumption being lower due to fiscal consolidation.

Since Q3 FY22/23, however, there have been signs of moderation, although the overall growth momentum remains robust. The persisting headwinds – rising borrowing costs, tightening financial conditions and ongoing inflationary pressures – are expected to weigh on India’s growth in FY23/24. Real GDP growth is likely to moderate to 6.3 percent in FY23/24 from the estimated 6.9 percent in FY22/23.

Both the general government fiscal deficit and public debt to GDP ratio increased sharply in FY20/21 and have been declining gradually since then, with the fiscal deficit falling from over 13 percent in FY20/21 to an estimated 9.4 percent in FY22/23. Public debt has fallen from over 87 percent of GDP to around 83 percent over the same period. The consolidation has largely been driven by an increase in revenues and a gradual withdrawal of pandemic-related stimulus measures. At the same time, the government has remained committed to increasing capital spending, particularly on infrastructure, to boost growth and competitiveness.

⦁ Short Term: The revolution was launched to address India’s hunger crisis during the second Five Year Plan.
⦁ Long Term: The long term objectives included overall agriculture modernization based on rural development, industrial development; infrastructure, raw material etc.
⦁ Employment: To provide employment to both agricultural and industrial workers.
⦁ Scientific Studies: Producing stronger plants which could withstand extreme climates and diseases.
⦁ Globalization of the Agricultural World: By spreading technology to non-industrialized nations and setting up many corporations in major agricultural areas.

TECHNOLOGY :

A smart city relies heavily on the deployment of technology. Different combinations of technological infrastructure interact to form the array of smart city technologies with varying levels of interaction between human and technological systems.

• Digital: A service oriented infrastructure is required to connect individuals and devices in a smart city. These include innovation services and communication infrastructure. Yovanof, G. S. & Hazapis, G. N. define a digital city as "a connected community that combines broadband communications infrastructure; a flexible, service-oriented computing infrastructure based on open industry standards; and, innovative services to meet the needs of governments and their employees, citizens and businesses."
• Intelligent: Cognitive technologies, such as artificial intelligence and machine learning, can be trained on the data generated by connected city devices to identify patterns. The efficacy and impact of particular policy decisions can be quantified by cognitive systems studying the continuous interactions of humans with their urban surroundings.
• Ubiquitous: A ubiquitous city provides access to public services through any connected device. U-city is an extension of the digital city concept because of the facility in terms of accessibility to every infrastructure.
• Wired: The physical components of IT systems are crucial to early-stage smart city development. Wired infrastructure is required to support the IoT and wireless technologies central to more interconnected living. A wired city environment provides general access to continually updated digital and physical infrastructure. The latest in telecommunications, robotics, IoT, and various connected technologies can then be deployed to support human capital and productivity.
• Hybrid: A hybrid city is the combination of a physical conurbation and a virtual city related to the physical space. This relationship can be one of virtual design or the presence of a critical mass of virtual community participants in a physical urban space. Hybrid spaces can serve to actualize future-state projects for smart city services and integration.
• Information city: The multiplicity of interactive devices in a smart city generates a large quantity of data. How that information is interpreted and stored is critical to Smart city growth and security.

POWER, a five-year, multi-stakeholder project initiated in 2013, worked to improve the lives and livelihoods of more than 1.7 million people in rural Indian communities, primarily in the states of Odisha and Jharkhand. Its priorities included expanding access to clean drinking water, household-level toilet and bathing facilities, and hygiene education.

Outcomes of the POWER project have included:

⦁ Community mobilization to reach all households in six districts of Odisha and Jharkand with the program’s products and services
⦁ Formation of village committees and creation of a capital fund
⦁ Training of daily wage earners as masons and plumbers to help build village sanitation infrastructure
⦁ Construction of individual toilets and bathing rooms and a water tank and water distribution system in each village cluster
⦁ The linking of village committees with local government institutions
⦁ Increased capacity of village committees to operate, maintain, and sustain the sanitation infrastructure ⦁ Increased capacity of women and other marginalized groups to take part in village decision-making

POWER achieved its target of raising the average annual household income of 350,000 farming households by 15,000 rupees (US$207) over five years (2014–2019). Seven livelihood initiatives arising from POWER have been scaled up by governments in Odisha and Jharkand. For example, POWER took the agricultural production cluster model piloted by the nonprofit organization PRADAN in Jharkhand and implemented it in a few districts of Odisha, showing the potential of market-oriented farming. Encouraged by the evidence, the government of Odisha scaled this up to 100,000 farmers in 12 districts.

History

Prior to India's Independence, from the period of 1900 to 1947, per capita income in India had either declined or stagnated. Post-Independence, Jawaharal Nehru demonstrated his willingness to compromise socialism for the perceived benefit of the country to provide financial incentives for the expansion of private enterprise. However, after the crisis of 1957, India turned towards import substitution industrialization and introduced foreign exchange. The Nehru-Mahalanobis approach, often referred to as the Second Five Year Plan, emphasized the development of basic and heavy industries as a means of accelerating economic growth. These included steel, copper, petrochemicals, paper, coal, and oil.[10] Mahalanobis strived for India to reach autonomy, ridding any outstanding debts. Critics disagreed with this approach, stating that World Bank's claim of Indian export prospects being low were falsified and due to India's inward-looking strategy, the growth opportunity of the world economy was missed. Nonetheless, over 1950–1965, India's acceleration of per capita income growth had increased an average of 1.7%, a value not exceeded since.
The discourse on the efficacy of the Nehru-Mahalanobis Strategy is commonly contested by economists. A criticism of the approach emphasizes the lack of resource allocation in the agriculture sector. It is argued that the misbalanced weightage towards the machine-making sector contributed to the increase in food-grain prices and thus, perpetuated poverty and malnutrition. Defenders of the strategy claim that it sought to increase agricultural output by increasing the output-capital ratio. This agreeably would have been accomplished through land-reforms, something the strategy did not address, not indicating a problem with the strategy itself.

Agriculture

India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 18.6% of the GDP in 2005, employed 60% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic sector and plays a significant role in the overall socio-economic development of India. Yields per unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since the green revolution

India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population (193 million). It is the second largest producer of wheat, rice, sugar, groundnut and inland fish.[16] It is the third largest producer of tobacco. India accounts for 10% of the world fruit production with first rank in the production of banana and sapota, also known as chiku.
The required level of investment for the development of marketing, storage and cold storage infrastructure is estimated to be huge. The government has implemented various schemes to raise investment in marketing infrastructure. Amongst these schemes are Construction of Rural Go downs, Market Research and Information Network, and Development / Strengthening of Agricultural Marketing Infrastructure, Grading and Standardisation.

Main problems in the agricultural sector, as listed by the World Bank, are:

• India's large agricultural subsidies are hampering productivity-enhancing investment.
• Overregulation of agriculture has increased costs, price risks and uncertainty.
• Government interventions in labour, land, and credit markets.
• Inadequate infrastructure and services.

GDP growth rate

Since the economic liberalisation of 1991, India's GDP has been growing at a higher rate.[26] The following table has been collected from public data archives with data from the World Bank:

GDP growth rate is unequal within India. For the year 2015–16, GDP growth rates of Andhra Pradesh (10.99%), Bihar (10.27%) and Madhya Pradesh (10.16%) were higher than Maharashtra (8%), Odisha (6.16%) and Punjab (5.96%).
India is fifteenth in services output. Service industry employ English-speaking Indian workers on the supply side and on the demand side, has increased demand from foreign consumers interested in India's service exports or those looking to outsource their operations. India's IT industry, despite contributing significantly to its balance of payments, accounts for only about 1% of the total GDP or 1/50th of the total services.

Sector-wise Contribution of GDP in India

 Services sector is the largest sector of India. Gross Value Added (GVA) at current prices for Services sector is estimated at 92.26 lakh crore INR in 2018-19. Services sector accounts for 54.40% of total India's GVA of 169.61 lakh crore Indian rupees.
 With GVA of Rs. 50.43 lakh crore, Industry sector contributes 29.73%. While Agriculture and allied sector shares 15.87%.
 It is worth mentioning that agriculture sector has maximum share by working force at near 53% while services and secondary sectors shares are near 29% and 18% respectively.

Vandhan Gram Ayog believes in the spirit of partnership and has joined hands with community organization, civic bodies, corporate, educational and development institutions, as well as government to strengthen its cause and ameliorate the situation of underprivileged children and youths in India.

The management of Vandhan Gram Ayog is deeply committed to providing the basic requirements of life to every human being, and facilitate the development of overall potential physically, mentally, and spiritually. The holistic development of every person would contribute to the overall health of society and promote social wellbeing.

It is an issue based, strategic educational support organization working in Western India with people’s collectives, NGOs, elected representatives in local governance and the government. Collaborative research, public education, advocacy, direct field level mobilisation and implementation with multiple stakeholders are the key instruments of our work. The interventions span from the grassroot level to policy level environment in ensuring basic rights of citizens. In this, inspiration is drawn from the struggles of the vulnerable and strength from our partners. Presently, all the activities are organised around the following programmecentres.

Presently, all the activities are organised around the following programmecentres:

1. Social Inclusion and Empowerment
2. Civic Leadership Governance and Social Accountability
3. Social Determinants of Disaster Risk Reduction

Policies

Vandhan Gram Ayog is a collaborative platform which aims to synergise Smart city development efforts across ASEAN by facilitating cooperation on smart city development, catalysing bankable projects with the private sector, and securing funding and support from ASEAN's external partners.

The European Union (EU) has devoted constant efforts to devising a strategy for achieving 'smart' urban growth for its metropolitan city-regions. The EU has developed a range of programmes under "Europe's Digital Agenda". In 2010, it highlighted its focus on strengthening innovation and investment in ICT services for the purpose of improving public services and quality of life. Arup estimates that the global market for smart urban services will be $400 billion per annum by 2020.

The Smart Cities Mission is a retrofitting and urban renewal program being spearheaded by the Vandhan Gram Ayog. Vandhan Gram Ayog India has the ambitious vision of developing 100 cities by modernizing existing mid-sized cities.