Shaktikanta Das On India’s Growth, Resilience & Roadmap To Viksit Bharat 2047

0:00 It's a special feeling to be back at the Kotella economic conclave 2026. Since its inception in 2022, I have been participating in almost all the additions of the Kotella economic conclave either as a speaker and last year as a moderator. This conclave has emerged as a forum for rigorous intellectual discussion and strategic thinking. It's fitting that this conclave bears the name of Kotillia, one of the greatest scholars and strategists of ancient India. Through his state craft, diplomacy and administrative vision, Kotilia helped lay the foundation of one

0:46 of the first great panindia empires, the Morian Empire, bringing large parts of the Indian subcontinent under a unified political authority. His ideas on economic management, national security and governance articulated in his immortal treaties the Arthur Sastastra continue to be relevant even today. The Arthurastra was a highly scholarly and intellectually rigorous work. Yeah. Thank you. The Arthur Sastastra was a highly scholarly and intellectually rigorous work. One aspect that stands out is

1:31 Coutilia's critical examination of the thoughts of his earlier authorities. This method of citing, comparing, and evaluating preceding scholars reflects a sophisticated academic approach and evidence-based decision making. And that was about two millennia years ago. At a broader level, Coutellia's timeless principles intersect with the vision of a resurgent India through several core domains. The economic vitality that we see in India today aligns with Kautilia's concept of yoga shea which prioritizes welfare which prioritizes welfare of

2:18 which prioritizes welfare of the people. Kotilia advocated for an economy where the state creates public infrastructure and actively encourages private enterprise and trade. Does it sound familiar? Yes. I am referring here to India's big thrust on infrastructure spending and structural reforms over the last decade or so. Cautilia also emphasized that a state must build its treasury that is the kosha without passing the without passing on catastrophic dread debts to its future generations. India's policy emphasis on fiscal consolidation and sustainable debt may be seen in this context. There are indeed many more learnings

3:04 from Cautilia's thoughts. Thoughts which are very relevant for the current global economy characterized as it is by wars, fragmentations unilateralism technological blockades, energy price volatility and rising inflation. The interplay of these forces is creating uncertainty across the world and would perhaps and would stifle global growth. What is likely to follow is restrictive monetary policies from central banks. Even more critical is the exceptionally high public debt levels in many advanced economies averaging close to 110% of their GDP and resulting in rising bond yields, lower

3:50 fiscal space and the and their ability and the ability of the countries to counter current and future shocks. Despite such a global environment, India's real GDP grew by an impressive 7.8% in the first quarter of the current financial year with strong dom domestic demand and investment conditions. This quarterly growth has come on top of 7.9% average annual GDP growth recorded during the postcoid period of 5 years that is from 2122 to 2526. In fact, as pointed out by my former colleague in the Reserve Bank of India, Dr. Michael Deabraapatra, who is I'm happy to note present here, if the

4:37 period from July September 2526 to April June 26 27 is taken into account, real GDP growth in India just exceeds 8%. This resonates with my statement to Financial Times London a few months ago that India is within a striking distance of 8% growth. Now what are the factors behind the resilience of the Indian economy? Kotelia had emphasized that a ruler's foremost responsibility was to anticipate risks, safeguard the state against internal and external threats and establish institutions capable of preventing and mitigating calamities. A distinguishing feature of India's

5:22 development journey in the last 12 year 12 years has been the gradual creation of governance foundations before the crisis actually emerged. Many of the reforms undertaken over the past decade were not designed as one-off measures but as specific buffers to enable the economy to absorb disruptions and recover rapidly. I would put the flexible inflation targeting, introduction of the goods and services tax, the big push for digital payments and the banking reforms among others in this category. Thus, thus India's resilience is not accidental. It is the outcome of broad and mutually reinforcing reforms. I would like to

6:08 highlight three major components of this broad-based approach. First, strengthening governance and state capacity. Governments derive credibility from the outcomes of their actions. In the Arthur Sastra, Cotillia argues that a ruler's interests are inseparable from those of the the citizens. Over the past decade, improvements in public infrastructure, sanitation, financial inclusion, housing, household electrification, digital services, and welfare delivery have contributed to stronger citizen state engagement. When citizens experience tangible improvements in their lives, confidence in institutions increase. This

6:55 confidence becomes a critical resource for governments seeking to undertake difficult reforms. One of the clearest examples of proactive institution building has been India's digital public infrastructure or what is otherwise known as the India stack. The jam trinity consisting of Jandhan bank accounts, Aadhaar and mobile connectivity was established well before the coid9 pandemic and when the need arose it enabled rapid transfer of financial benefits to millions of citizens affected by the covid. Digital governance has reduced information asymmetries streamlined administrative processes and enhanced accountability. Illustratively, direct benefit transfers

7:42 have significantly reduced leakages in welfare programs with estimated savings of around rupees 5.1 lakh cr. A significant dimension of India's recent development journey has been its success in extending the reach of governance, economic opportunity and public services to certain regions that had long remained on the margins of growth due to left-wing extremism and terrorism. success in overcoming these problems which had become sticky resonate with Kotilia's emphasis on dand that that is the authority of the state to maintain law order and discipline. The second major initiative for strengthening India's resilience has been building

8:28 macroeconomic stability. If you recall I want I pointed out that I would like to highlight three major themes as factors behind the resilience of the Indian economy. The first one I have highlighted is strengthening governance and sec state capacity. I move on to the second major initiative which is building macroeconomic stability. Now this is built upon five distinct pillars. First inflation targeting and monetary policy credibility. The adoption of flexible inflation targeting framework since 2016 enabled India to navigate through the successive shocks of COVID, the war in Ukraine and the current conflicts in the West Asia. Flexible inflation targeting has provided has in fact created or provided

9:16 the bedrock for India's high and sustained growth. The second component is fiscal prudence and quality of expenditure. In fiscal policy, the government has shown sustained commitment to fiscal fiscal consolidation and reduction of fiscal deficit without compromising on growth inducing expenditure. A road map for reduction in government debt GDP ratio to 50% by March 2031 has also been announced. Third component of the macroeconomic uh you know what I mentioned the macroeconomic stability which is the main theme which I mentioned is tax reforms and market integration. The introduction of the goods and services tax in 2017 created

10:02 an integrated national market removed cascading burden of taxes expanded the tax base and compliance and led to greater formalization of the economy. Reforms in income tax have improved competitiveness of firms and reduced tax burdens on middle classes. The results have been telling. The fourth component is restoration of the health and stability of the financial sector. In fact, restoration of the finan health of the financial sector I would like to say has been the defining feature of India's resilience in the recent years. India's financial sector has emerged as a strong pillar of economic growth

10:48 supported by reforms such as the insolveny and bankruptcy code, bank recapitalization and constructive regulatory oversight. Gross non-performing assets have fallen sharply to 1.68%. 68% in June 2026 while bank profitability have improved significantly and finally prudent management of external sector has also supported India's efforts towards microeconomic stability. India's external sector indicators have remained broadly resilient due to a mix of factors like the ongoing diversification of exports, conclusion of free trade agreements, sustained surplus in services trade and steady inward remittances. Current account deficit for

11:35 2526 remained well within manageable levels at 6% of GDP. Other key external sector vulnerability indicators have also remained well contained. The third major initiative I said I'll mention three major initiatives. The third major initiative is building resilience. Uh in building India's resilience is investment in long-term productive capacity. This is built upon again three major building blocks. First infrastructure and logistics transformation through large-scale investment and coordinated transport planning. The Gautaki in the that is the Gautaki India has expanded physical and digital connectivity, logistics efficiency and access to national

12:22 services. Initiatives such as the national logistics policy, the Sagur Mala, the Jaljivan mission and uran exemplify a governance model that is citizencentric and integrates planning, execution and monitoring across sectors. The result has been lower economic frictions, greater competitiveness, enhanced market integration and a stronger foundation for investment growth. No wonder India's rank in the World Bank logistics performance index improved from 54 in 2014 to 38 in 2023. India aims to enter the top 25 by 2030.

13:10 India has also developed a diverse range of energy sources from fossil fuels. And this is the second component I wanted to mention in the context of uh you know in the context of what I said uh the third major initiative which contributed to enhancement of India's long-term uh productive capacity. India has developed a diverse range of energy sources from fossil fuels, renewables, bofuels and nuclear energy. City gas distribution has expanded to 700 cities. Piped cook gas has reached 1.75 cr households and solar energy capacity has surged to 165 gawatt. India has emerged as India has emerged as the

13:56 third largest country in renewable energy capacity. Reliability of energy supply has also improved significantly under the prime minister Suryagar Muth Bizley Yojana. More than 50 lakh households now have rooftop solar installation. Household power bills have been reduced to either zero or many households have been able to generate additional income through sale of surplus power. India is now better positioned to withstand external energy shocks. Finally uh the third component is manufacturing and industrial development. Flagship schemes such as production linked incentive scheme, the PMitra and skill India are accelerating capacity building and strengthening

14:42 India's manufacturing ecosystem. We are now witnessing we are now witness to a manufacturing resurgence in India. Illustratively, India has become the second largest mobile phone manufacturer globally. Semiconductors have also made a big entry into India's manufacturing space. Investments in automation, robotics and industry 4.0 technologies are also adding to the robots robustness of this system. India now stands at a pivotal moment in its development journey. I repeat, India now stands at a pivotal moment in its development journey. A leap to Bshit Varat 2047 is

15:27 very much in the realm of realization. The journey ahead is focused on capitalizing on emerging opportunities. I propose to highlight five major areas where the pace of activity will get significantly enhanced in the coming years. First, harnessing the AI revolution. Artificial intelligence represents perhaps the single most transformative technological development of this century so far. As a generalpurpose technology, AI has immense potential to enhance productivity, improve public service delivery, accelerate scientific discovery, strengthen healthcare outcomes and transform education. AI's

16:12 India's AI strategy rest on rest on two complimentary pillars. First building sovereign AI capabilities through investments in indigenous foundation models, high performance computing infrastructure semiconductor development and a robust innovation ecosystem. The AI mission, the AI kosh and the India semiconductor mission are laying the foundations for long-term technological competitiveness. Second, India is pursuing the vision of AI for all. Initiatives such as Bhassini seek to bridge linguistic barriers while India AI future skills aim to democratize access to AI capabilities. Attention is also focused on critical

16:59 issues relating to concentration of technological power, data governance, cyber security, algorithmic bias and AI safety. The second major component of the way forward is deepening India's financial sector. As India's economic weight expands, the financial architecture must deepen commensurately. While India's financial ecosystem has evolved significantly, the next phase of growth will require strengthening of long-term finance and patient capital. This underscores the need to further deepen corporate bond markets, pension and insurance funds, municipal finance, innovative infrastructure financing and a market for green and transition

17:45 finance. The third component is promoting strategic atma or self-reliance. Now, Atmana does not imply isolation. Rather, it stands for building stronger domestic capabilities while remaining integrated with global markets and concluding more free trade agreements. Efforts are now focused on enhancing our presence in the global supply chains, strategic manufacturing, defense production and domestic development of critical technologies. The fourth component is sustainable development and climate leadership. India's rise must also be environmentally sustainable. We have made notable progress in renewable

18:31 energy development and climate commitments. The next phase of growth will be driven by initiatives such as the national green hydrogen mission, electric mobility, energy efficient infrastructure, sustainable agriculture and circular economy practices. The four the fifth component is investing in human capital. India has made substantial progress in expanding access to health and education. Over the last 12 years, the number of universities increased from fewer than 350, that is from less than 350 to nearly 1,000 and medical colleges from less than 400 to another 850. The next stage of development will enhance emphasis on

19:17 learning outcomes, healthcare delivery, preventive care, research and workforce skills. Let me now conclude. If we pause for a moment and reflect upon India's story of resilience and its forward-looking strategy, what comes out clearly is a resonance with Koutillia's thoughts and advocacy as we advance towards the vision of Vixit Bharat. Sustaining the reform momentum will be very critical. Kotelia had explained long time ago and I quote which is preferable an immediate small gain or a large gain in the future a large gain in the future is preferable if it is like a seed

20:04 yielding fruit in the future unquote India's strategy is no longer to simply grow rapidly it is to grow sustainably and resiliently over the long term thank you very much namaskar If you like the video, do like, [music] comment, share and subscribe.