Risk of income stagnation if growth below 8%: Report

Mumbai, August 26

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India’s GDP needs to rise annually at 8-8.5% to create opportunities in the post-Covid era, and the country risks a decade of stagnating incomes and quality of life if urgent steps are not taken to spur growth, says a report.

McKinsey Global Institute findings

• India will have to undertake a slew of reform measures over the next 12-18 months with the aim of increasing productivity and creating jobs
• There will be 90 million additional workers in search of non-farm jobs by 2030 and India will have to triple job creation to 12 million jobs per year
• The GDP needs to go up to 8-8.5% per annum for the next decade to create the opportunities, it said.

As per McKinsey Global Institute report, the country will have to undertake a slew of reform measures over the next 12-18 months with the aim of increasing output and creating jobs.

Given the increasing urbanisation and population trends, there will be 90 million additional workers in search of non-farm jobs by 2030 and India will have to triple job creation to 12 million gainful non-farm jobs per year from the 4 million achieved between 2013 and 2018, it said.

The GDP, which is set to contract by over 5% as per some estimates in FY21, needs to go up to 8-8.5% per annum for the next decade to create the opportunities, it said, warning of difficulties if it is not achieved.

On the reforms front, it advocated attention to manufacturing, real estate, agriculture, healthcare, and retail sectors, unlocking land which can reduce prices by up to a fourth, creating “flexible” labour markets, enabling efficient power distribution to reduce tariffs for consumers by over 20% and privatising 30 top state-run enterprises. — PTI