Forging a Developed India: Growth Imperatives, Fiscal Sustainability, and Multilateral Partnerships for Viksit Bharat 2047

TL;DR

This paper analyzes India's fiscal and macroeconomic strategies needed to achieve high income status by 2047, emphasizing sustainable growth, fiscal discipline, and international partnerships to support infrastructure, human capital, and innovation.

Contribution

It provides a comprehensive framework combining econometric modeling and policy analysis for India's growth, fiscal sustainability, and multilateral cooperation for Viksit Bharat 2047.

Findings

A 7-8% GDP growth rate is essential for India to reach high income status.

Fiscal prudence with a deficit below 3.5% of GDP is crucial for sustainability.

International financial institutions play a key role in expanding India's fiscal capacity.

Abstract

This paper examines the fiscal and macroeconomic strategies essential for transition of India to a high income economy by 2047, aligning with the vision of Viksit Bharat. A sustainable annual GDP growth rate of 7 to 8 percent is projected as necessary to achieve this milestone while maintaining fiscal prudence through a targeted deficit threshold below 3.5 percent of GDP. The study underscores the role of disciplined fiscal management in financing critical public investments in infrastructure, human capital development and technological innovation. Given constraints on domestic resource mobilization, the paper highlights the importance of multilateral financial institutions, including the World Bank, IMF and ADB, in expanding fiscal space in India through concessional financing, technical cooperation, and risk sharing mechanisms. Using econometric modeling and scenario analysis, the research identifies key policy interventions in infrastructure, healthcare, education and sustainable energy that can maximize growth while ensuring fiscal sustainability. Policy recommendations include enhancing tax buoyancy, rationalizing expenditure, optimizing public private partnerships and strengthening fiscal responsibility frameworks. The findings suggest that a calibrated approach to growth, prudent fiscal management and strategic international collaborations are critical to achieving long term economic aspirations of India.