India must focus on skilled workforce to become developed by 2047: Gopinath

India has grown well in terms of its overall growth rate, and at 7 per cent, it is the fastest growing major economy in the world, she said

India should invest in creating a skilled workforce, putting in place a better infrastructure while undertaking land, labour and taxation reforms to meet its aspiration to become a developed country by 2047, International Monetary Fund’s (IMF) deputy managing director Gita Gopinath said on Saturday.

“It is a tremendous aspiration to become a developed country… India needs a workforce which is much more skilled and has a much higher level of education. There is a skill mismatch in the workforce,” Gopinath said.

India has grown well in terms of its overall growth rate, and at 7 per cent, it is the fastest growing major economy in the world, she pointed out.

 

“The question is, how does one keep up the momentum and raise it further so that you can increase per capita incomes in India to get to being an advanced economy,” she said.

Speaking at a fireside chat with NK Singh, 15th Finance Commission Chairman and Co Convenor of the G20 expert group on strengthening Multilateral Development Banks, at the Diamond Jubilee celebrations of the Delhi School of Economics, Gopinath said it would be helpful for India to broaden its tax base and make sure there are not many leakages.

“India should make sure that it gets enough from the long-term capital gains tax. More can be done on the property tax front as well,” she added.

She called for expanding the base of personal income tax and goods and services tax while simplifying their structures.

Gopinath while talking about what India needs to do in the medium term to reach its goal of becoming a developed country by 2047 said that keeping trade open was important.

The country needs to reduce import tariffs if it wants to be an important player in the global supply chains, she said.

“Tariff rates in India are higher than in its other peer economies. If it wants to be an important player on the world stage and an important part of global supply chains, it is going to require reducing those tariffs," the economist said.

She also listed the need to strengthen institutions to improve ease of doing business, have efficient judicial systems, put in place better regulatory environments and ensure women safety.

On the advancements in technology space, Gopinath said that countries should not be tilting the ground to favour automation but must develop safety nets and social security for its workforce.

She said that an IMF study of countries over 170 countries on AI preparedness placed India at an intermediate level with Singapore in the top position.