The size of the Indian economy stands at USD 2.7 trillion as of September 2019. “Aim is to take the economy to $10 trillion by 2030,” says the ambitious Prime Minister, Narendra Modi for the Indian economy. The goal is to stand at USD 5 trillion by 2024 and eventually double it up by 2030. Do you think its a far fetched dream given the swinging state of the economy? Let’s find out.
Catalyst for Growth
At a recent annual session of the Society of Indian Defence Manufacturers, the Defence Minister Rajnath Singh said, “Amongst several sectors of the economy which are set to contribute to this growth, the defence has been identified as one of the most prominent sectors under the ‘Make in India’ initiative.”
Rajnath Singh believes that the defence sector will be instrumental and will be the catalyst for growth in contributing to India’s growth in becoming a $10 trillion economy by 2030. It can be the catalyst for the growth of the Indian economy. India imports 60% of its defence weapons from foreign markets even after getting the fifth-largest defence budget in the world. The government wants to ascertain self-reliance in every sector and focuses on “Make in India”.
What does this imply?
This implies that the production in the country has to grow by about 15% YOY for the defence industry to achieve that level. The defence industry stands at a production of nearly Rs 80,000 crore in 2018-2019 and the private sector’s contribution was about Rs 16,000 crore. About 40 percent of the production activities have been outsourced to private players.
The Defence Production Policy states that a yield of $26 billion in aerospace and defence goods & services by 2025 is the goal of the government. This will require a $10 billion investment and employment of about 3 million people.
The defence sector has effects on India’s attempts to promote and encourage R&D, innovation and it will have major implications & give spin-off advantages for the economy.
The annual meet at the Society of Indian Defence Manufacturers threw light on the growth measures taken by the defence sector and brought in a new angle to the economic revival.
The defence minister also elucidated on the steps like easing the industrial licensing process, hiking the FDI cap and other measures taken by the government to promote products in the defence sector by the private players.
We can only wait and watch to see how the economy takes a swing in the next 5 to 10 years and achieve the goals set. The government is focusing on nurturing India's defence industry with a strong mission. This is why it is at the heart of the "Make in India" program to propel the economic goals of the country.