Shiv Khera – Can We Achieve a US $5 Trillion Economy by 2024?
Investment Outlook , Published
Feb 19, 2020
5 min read
The math for US $5 trillion rests on two
simple operations – Add more and
Subtract less i.e. by making India an
attractive destination for additional
foreign investment and taking measures
to stop domestic capital from fleeing the
country for want of better opportunities.
The answer is yes we can, provided we have the
Do we have the political will? If yes, then we need to
do the following immediately (within the next three
months) and not in 2023 as an election gimmick. To
achieve our objective of becoming a US $5 Trillion
economy, we need to have a two-pronged approach
where we make India an attractive destination for
investment and prevent capital from fleeing India by
eradicating negative elements in the system.
Risk: What will make India an attractive destination for
investment? The risk-reward ratio of investments
makes them a preferable option. If the risk is low and
the rewards are high, money flows in. Unfortunately, in
India the risks are high and the reward is low.
Redressal System: The one big risk that investors face
is, in the case of any dispute or problem, they have no recourse or redressal system because of our
inefficient judiciary. According to former CJI Dipak
Misra, in June 2018, over 33 million cases were
pending in Indian courts. The judicial system
protects the criminals and punishes the honest.
Until there are judicial reforms, both domestic and
international investors will continue to shy away
from risking their capital.
Corruption: The second risk factor is the ‘Ease of
Doing Business’ in India. Even though we have
moved up a few notches on the international
rating, the ground reality is quite different. It is very
difficult to do business in India because of the
corrupt political and bureaucratic system. An
entrepreneur gives up before he can set up a
business because he is unable to satisfy the greed
of those in positions of power.
I know three NRIs who were looking to bring in
close to a billion dollars of foreign investment to
India but were so disheartened that they stopped
pursuing their potential business ventures in India –
putting up with the greed of Indian politicians and
bureaucrats was challenging for genuine investors.
Hence the risk remains high.
11 points reform
- India’s tax structure needs to be revised. Our
highest rate of personal income tax is 42
percent. Any person who buys consumer
goods after paying 42 percent has to pay an
additional 18 percent GST. On top of this,
they still have to pay other taxes like petrol
tax, house tax, car tax, luxury tax and so on.
By the time the individual pays all the taxes, he or she is probably left with close to 30
cents on a dollar. This is not much of a reward
for any entrepreneur.
- We need to introduce a single rate GST and
make compliance processes simpler.
- The Indian entrepreneur is at a big
disadvantage because he or she borrows
money from banks at high rates of interest – at
least 12-14 percent. Most competitive nations
let entrepreneurs borrow at a 3-4 percent rate
- To make the ‘Make in India’ campaign a
success, the Government should give a 100
percent write off for all capital investments in
business and agriculture.
- We need to change laws to make India more
competitive. The textile industry, for example,
is unable to compete with small countries like
Bangladesh, Vietnam and Turkey. India faces
higher costs of manufacturing than ever
before for the following reasons; 1) Export
benefits have ceased 2) GST has led to a
higher cost of raw materials as well as made
the finished products more expensive and
therefore, less competitive in the global
markets 3) Shortage of skilled and unskilled
workers and 4) Because of anti-dumping laws
for synthetic yarns, many entrepreneurs
continue to move their manufacturing
facilities to Turkey or Vietnam.
- We need to drive our GDP to a double-digit
growth figure of 10 percent. At the same time,
the reward of this growth needs to be
inclusive, i.e. out of the 10 percent, 9 percent
should not go to just 10 families and the
remaining one percent distributed among the
rest of the country. Such lopsided growth
brings in more disparity and makes the rich
even richer and the poor even poorer. We
need to bring mass employment
opportunities and work towards alleviating
- A common dilemma that exists in the minds of
Indians is that on one side there is massive
unemployment and on the other side there is
a dearth of qualified people to fill these jobs.
To the extent that hotels poach waiters and
captains from one another. In big cities, there
is a shortage of drivers. This situation can only
be rectified by setting up vocational schools.
China has 5,00,000 vocational schools,
whereas India has only 50,000 vocational
schools. We need to get the number up to
1,00,000 vocational schools and create 50
million jobs, in the next 36 months.
- We must increase our investment in
infrastructure. Even though there is a reform
in the infrastructure sector in India, there is a
need for acceleration to achieve our target of
becoming a US $5 trillion economy.
- We need to have a population control policy
to improve the quality of life. India’s
population has surpassed China’s population.
A total of 122 crore people have Aadhaar
cards and an additional 25 crore people are
either unaccounted for or illegal in the country. Per minute, 11 children are born in
China as compared to 33 children per minute
in India. Our economic growth and resources
are unable to keep up with the rapidly
increasing population of India.
- We need to look into alternative energy
options and reduce oil imports by 90 percent.
For example, in Israel, solar power is
mandatory in every building. By using
ethanol, Brazil has reduced its oil imports by
90 percent, which will enrich farmers and
prevent loss of foreign exchange. Examples of
such success stories exist in India as well –
College of Jesus and Mary in Delhi and the
Cochin International Airport have adopted
solar in a big way.
- We must manage our waste like other
countries such as Singapore, Japan and
Sweden. Japan has converted 100 percent waste into productive energy. Sweden’s waste
management system recovers more energy
per ton of waste than any other country.
Sweden is on route to achieving 0 percent
waste by utilising and recycling their waste. In
fact, they have started importing waste from
To achieve our objective, we need to set
time-bound goals and a practical plan to
implement it. In conclusion, I would like to say that
it is better to have a good plan that’s well
implemented than a great plan that’s poorly
implemented. Our political leadership needs to
think of the next generation, and not just the next
election. It is important to keep national interest
above personal interest to achieve the target of
India becoming a US $5 Trillion by 2024.
About Shiv Khera
Shiv Khera is an author, educator,
business consultant and a
motivational speaker. He is the
author of `You Can Win’, an
international bestseller that has
sold over 8 million copies
worldwide. He has been honored
by The Lions International and
Rotary International for his work.
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