India: Reflections on the Economy, Employment, Budgets and Taxation (3one4 Capital)

Summary

• India's GDP in FY 2018-19 is estimated at INR 190 lakh crores or $2.7tn, against Prime Minister Modi's goal of a $5tn economy by 2025.p.10
• The authors estimate the probability that India reaches the $5tn goal is more than 80%.p.10
• About $50bn capital has entered India's digital ecosystem since 2014, of which less than 10% is estimated to be Indian.p.12
• India has 1bn+ mobile phones, 560mn+ internet connections and 350mn+ additional bank accounts opened since 2014.p.12
• Maharashtra's GDP in 2018-19 is estimated at USD 380 billion, 14% of national GDP, against a vision of USD 1 trillion by 2025.p.14
• India's nominal GDP grew at a CAGR of 11.74% and 7.05% in real terms, from INR 87 lakh crore in 2011-12 to INR 190 lakh crore in 2018-19.p.21
• The world is at 55.3% urbanisation on average, whereas India is at 34%.p.25

Key insights

1. Supply chain costs are 14% of GDP; GST is already reducing them by 2% and costs could come down to 8-9% in the next three years.p.11
2. India needs 15 million jobs a year, but only 11-12 million are counted.p.11
3. India has 18 judges per million population, which the authors say must grow to 50 in 5-6 years.p.12
4. Total lending to GDP is just over 50%, while total deposits to GDP is just over 65%.p.12
5. Under the NDA-I government in 2014-19, GDP grew by INR 78 lakh crore in nominal terms, a growth of 69.2% at a CAGR of 10.9%.p.18
6. Villages connected with roads reached 91%, up from 56% in 2014.p.19
7. In 2017-18 the population-weighted per-capita GSDP of the south was INR 1.93 lakh, 2.5 times that of the north at INR 0.77 lakh.p.21
8. In 2016-17 agriculture accounted for 17.3% of GVA but 42.7% of the workforce.p.26