Abstract

India’s GDP growth rate is expected to be 6.4%, the world’s highest, yet joblessness is at around 7.5%. Given that India is domestically oriented growth path, the economic growth is expected to be less affected by the jobless even though the slower global growth and external demand will weigh on economic activity and could fuel inflation. India’s economic growth prospects should remain strong over the medium term, in fiscal years 2024-2026. Mission-oriented science and innovation do not end at proposing the implementation of transformative action, but must be actively engaged in the tracking, analysing, understanding and course-correcting of changes set in motion, so that the dynamics of change can be nudged in overall desirable directions. This route of output growth has the potential to be pro-poor and inclusive. The outlook is based on India’s micro, small, or medium enterprises (MSMEs). The MSME sector will drive innovation and new opportunities in a cost-effective manner. In short, the MSME sector will help India to reap the potential benefits of its demographic dividend and the expansion of the middle-income class. It will shift towards integrated and inclusive governance and the emergence of functional, societal accountable public institutions at all levels. To keep in mind the fundamental of macro-economic relationship between output and employment growth, this paper will focus on demand led-growth, especially on wage-led growth which has the potential to create higher output growth through higher aggregate demand.

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