Telangana ready to evolve into a catalyst to achieve $3 trillion economy goal

Telangana Deputy Chief Minister Bhatti Vikramarka Mallu on Tuesday said the State is ready to transform into a catalyst to accelerate growth as it sets out to achieve the ambitious goal of becoming a $3 trillion economy when India celebrates 100 years of independence in 2047.

“We are ready to move from being just a regulator to being a catalyst, a partner that shares the risk to reap the rewards for our people,” Mr. Bhatti Vikramarka Mallu, who is also Finance and Energy Minister, told a panel discussion on ‘$3 trillion economy – leveraging capital and productivity’ at the Telangana Rising 2047 Summit.

Noting that one of the the biggest challenges to achieve the goal is to unlock the capital required to spur innovation, drive inclusive and technology driven growth, he said for Telangana to reach $3 trillion by 2047, from approximately $185 billion presently, “we need to grow roughly 16-fold in just 22 years. Mathematically, this requires a compound annual growth rate (CAGR) of around 13.5% in US dollar terms or roughly 17-18% in rupee terms, accounting for currency depreciation.

No major Indian State has sustained such a level of dollar growth for two straight decades. Even during India’s best growth phases, States such as Gujarat or Karnataka averaged 11-12% nominal (rupee) growth over long periods.

Unprecedented in India

Thus, Telangana is attempting to do something unprecedented in Indian economic history, the Deputy CM said, declaring the ‘Telangana Rising 2047’ vision is “not just a document. It is our pledge to the future.”

However, the business as usual approach of growing around 10% will get Telangana to maybe $1-1.2 trillion, not $3 trillion. The gap between $1 trillion and $3 trillion is what economists call the ‘Productivity Gap’, he said, adding the goal cannot be achieved by working harder.

“We cannot get there just by building more roads or constructing more buildings, though we will do that too. To reach this exponential growth, we need to change the fundamental equation of our economy. The equation capital plus innovation equals productivity. And productivity is the only sustainable way to raise the wages and dignity of the common citizen in Telangana,” he said, pointing to how for decades, governments in India have viewed themselves as regulators. They focussed on permissions, licenses and files and patted themselves for improving the ‘ease of doing business.’

The world, however, has changed. In the era of Deep Tech, AI and Quantum Computing, ‘ease of doing business’ is just the baseline. It is the minimum requirement. “If we want to be the innovation capital of Asia, we must move from EODB to ease of Innovating. We must move from just clearing files to creating ecosystems,” Mr.Bhatti Vikramarka Mallu declared, citing the State government’s vision document and the spatial strategy of CURE (Urban), PURE (Peri-Urban) and RARE (Rural) it has mooted.

While the State has the plan in place and talent available, innovation is expensive. “More importantly, innovation is risky. Banks love safety. But innovation requires failure,” underscoring the need for measures to unlock the required capital,” he said.