India's Path to High-Income Status by 2047

India aims to transform from a lower middle-income nation to a high-income developed country by 2047, the target year for Viksit Bharat. Achieving this goal requires avoiding the middle-income trap by harnessing technological dynamism and enhancing workforce quality. Technological advancement and improved factor productivity, rather than mere factor accumulation, are crucial for sustained economic growth.

Technological Performance and R&D Investment

• Technological advancements drive improvements in capital quality and total factor productivity (TFP). From 1990-91 to 2022-23, TFP and capital quality growth averaged just 0.9% annually for the economy, with manufacturing showing no growth.
• India's R&D expenditure has remained low, with just 0.65% of GDP in 2020. In contrast, China's R&D spending rose from 0.56% (1996) to 2.56% (2022).
• For Viksit Bharat, India must achieve an 8% average GDP growth and increase R&D spending to 3% of GDP, requiring a 16% annual growth in R&D expenditure.

Indicators of Technological Progress

• India ranks 39th globally in the 2024 Global Innovation Index and 10th in the 2025 index for critical future technologies like AI, semiconductors, biotech, space, and quantum technology.
• These advancements are largely attributed to talented individuals and research units.

Role of Corporations and Government in R&D

• In 2020-21, corporations contributed 36.4% of total R&D expenditure, rising to 40.8% with public sector corporations. Governments and higher education institutions fund the remainder.
• Many Indian corporations give low priority to R&D, despite tax incentives. A 2024 study revealed low R&D spending across most sectors, except for defence and pharmaceuticals.
• The government plans to support private sector R&D with ₹20,000 crore in the current budget.

Strategies for Technological Advancement

• The focus should shift from R&D-linked fiscal incentives and subsidies to opening up industries to global markets, enhancing competitiveness, and stimulating corporate R&D.
• Learning from the rise of India's infotech services and digital transactions, the government should support education quality improvement and institutional autonomy.
• Fostering entrepreneurship and innovation, akin to Silicon Valley's model, can drive technological progress.

Key Requirements for Achieving Viksit Bharat

• Enhancing education quality at universities and high schools.
• Encouraging global trade and finance openness.
• Integrating technology import with domestic development.
• Prioritizing support for startups and individual innovators.