India's Economic Ambition and Challenges

India is on a promising path to become an $8 trillion economy by 2035, but significant hurdles remain, as outlined in 'The Great Unlock: India in 2035' report by Nandan Nilekani, co-founder and chairman of Infosys and Arkam Ventures.

The Four Major Hurdles

The report identifies four critical challenges: rising income disparity, low levels of formalisation, limited market access, and low productivity. With only 13 out of 788 districts contributing to half of the nation’s GDP, India's growth is highly concentrated.

Income inequality is stark, with the top 10% accounting for nearly 60% of total income. Additionally, about 200 million workers migrate from poorer states annually in search of better opportunities.

Productivity and Digital Transformation

Labour productivity is a concern, at only $7 per hour, roughly one-tenth of the United States. However, India's rapid digital transformation, powered by infrastructure like Aadhaar and UPI, offers a beacon of hope. Digital transactions have surged from zero to 16 billion monthly.

The Future Outlook

By 2035, half of India’s workforce is expected to be "AI-native," and women's participation in the workforce is projected to rise sharply. The combination of AI and Digital Public Infrastructure (DPI) is set to revolutionize access to digital services for millions.

To sustain growth, India must focus on improving capital access, supporting small businesses, promoting AI usage, and making land and property assets easier to monetize.