However, the world of uncertainty continues – a Covid-19 wave in China, the Russia-Ukraine war, protectionism and retreat from globalisation in more advanced countries, question marks about multilateralism, the dreaded spectre of recession in some countries, spliced with inflation and an energy crisis, high and volatile commodity prices, and unpredictable cross-border flows of capital.

India is not insulated from global developments. Capital and forex markets confront volatility, and the real sector bears the brunt. Almost 32 years ago, in 1991, India introduced economic reforms. At that time, in a relatively insular India, the trade to Gross Domestic Product (GDP) ratio was 17%. In 2021, exports plus imports, as a share of GDP, were 45%. Historically, 10 years earlier, the ratio was 56%.

Compared to that relatively closed economy, India exports more and imports more today. India should export and import even more. The export-driven growth model worked in the 1970s, 1980s and 1990s, when the global environment was kinder. In a more difficult environment, India should export more – regional trade agreements (RTAs) help that effort — but prospects for exports don’t look that bright. But this also depends on the timeline. Is the timeframe 2023-24, the next five years, or, since there is an Amrit Kaal (the 25-year period till the 100th year of Independence) template, years that lead up to 2047?

While we may not know what the world will look like in 2047, no one should expect the present basket of uncertainty to continue. At best, there will be a different set of uncertainties. In passing, when all the ailments spread, Pandora’s box was left with hope. The Greek word is “Elpis”, which means spirit or expectation of hope. But it can also mean the opposite, the expectation of fear.

As far as India is concerned, there shouldn’t be any reason for fear. Recovery from Covid-19 and the lockdown has been robust. Yes, Covid-19 left a toll, not only in terms of mortality, but also morbidity and loss in learning outcomes. Yes, Covid-19 meant India lost two years along the development path. But unlike countries that depend excessively on exports to drive growth, India has other sources of growth too, endogenous and internal. Expressed through the national income identity, those are consumption, private investments and government expenditure. Four engines are preferable to two, or one. And these three have ensured the post-Covid-19 recovery.

As we neared the end of 2022-23, there was near-consensus on real growth. Within the government and outside, the cited figure was between 6.8 and 7%. There is less consensus for 2023-24 and the medium-term. An optimist will say 6.5%, a pessimist 5.5%. An enthusiastic optimist will place it at 7%, a dire pessimist at 5%. While that’s a fairly broad band, irrespective of the figure, there is no denying the Indian economy’s growth resilience. What should one do to accelerate growth further? The reform agenda is known and can be sliced in different ways.

First, an all-India growth is an aggregate of growth in states. If states accelerate, so will India. Second, acceleration occurs through efficient land, labour and capital markets and productivity. These are described as factor markets and are generally state-government domains. More than one state has set a $1-trillion Gross State Domestic Product (GSDP) aspiration. If one adds these up, one can see how $5 trillion can be achieved. Third, one can break down sectorally – agriculture, industry and services. Fourth, one shouldn’t forget efficiency in government revenue (read tax reforms) and expenditure. In the aftermath of Covid-19, India’s macro management was superior to that in many advanced countries, because the focus was on capital expenditure, not revenue expenditure or reducing taxes. India scored because it did not heed to expert advice emanating from the West.

This leaves the last qualifier, inclusivity. Inclusion can be interpreted in different ways, though inclusion does suggest a reduction in inequality. Inequality in what is the question. In a just society, no one should be deprived of access to inputs – physical and social infrastructure, transport, toilets, sanitation, sewage treatment, electricity, gas, tap water, financial products, credit, information, markets. This is best understood as reducing inequity, as opposed to reducing inequality.

This message of empowerment has been at the core of the Union government’s initiatives since 2014. Its success is vindicated in government dashboards, surveys like the National Family Health Survey-5, and third-party audits. Indeed, the poor didn’t suffer much more because of Covid-19, thanks to welfare schemes, their portability, and the use of digital tools.

Splice this idea with subsidies to those objectively identified as deprived through a census (read the Socio-Economic and Caste Census). If this empowerment happens, one doesn’t need doles. Indeed, once empowerment happens, able-bodied people in working age-groups don’t need subsidies either. Improvements in aspirational districts are an indirect validation of such initiatives. This is not meant to imply that such welfare schemes have attained perfection. But their refinement is the route to make growth more inclusive.

Bibek Debroy is chairman, EAC-PM

The views expressed are personal