While India becoming the fifth largest economy in the world is an 'impressive achievement,' there is a need to grow fast to increase the per capita income of the country from the present levels, former Reserve Bank of India Governor C Rangarajan said on Saturday.

In his address at the 13th Convocation of the ICFAI Foundation for Higher Education, Rangarajan said post Covid-19 and the Russia-Ukraine war, there is a need to lay down a clear roadmap for India’s future development and the first and foremost task is to raise the growth rate.

Noting that India was today the fifth largest economy, he said, "this is an impressive achievement." "However, in relation to per capita income, it is a different story. In 2020, India’s rank with respect to per capita income was 142 out of 197 countries. This only shows the distance we have to travel… All the same, we have no choice but to grow fast, given the present level of per capita income," the former chairman of the Prime Minister’s Economic Advisory Council said.

According to calculations, he said, if the country achieves a seven per cent rate of growth continuously over the next two decades and more, it will make a substantial change to the level of the economy and India may almost touch the status of a developed economy.

India needs to absorb the new technologies that have emerged and that will emerge and skilled manpower which is consistent with this development though the new technologies may lower the employment elasticity with respect to output, he stressed.

"Employment must come out of increased growth. Employment enhancement without growth is not sustainable. That is why we must aim at least at a sustained growth of 7 per cent," Rangarajan pointed out.

The former RBI Governor underscored that the development strategy must be multidimensional and the country needs strong export as well as manufacturing sectors.

Growth without equity is not sustainable, he opined.

M Jagadesh Kumar, Chairman of University Grants Commission was the chief guest of the convocation.

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