- Skipped from agriculture to services; manufacturing sector remains underdeveloped, leading to employment issues.
Global Challenges:
- Pressure from high-tech economies, competition with low-wage countries, rising debt, and environmental considerations.
World Bank’s Recommendations:
- Strategy for High-Income Transition (3I Strategy):
- Investment in infrastructure and human capital.
- Infusion of Global Technologies.
- Innovation to boost productivity.
Key to Success:
- Embrace “Creative Destruction” to drive economic transformation.
- Economic Growth in Lower-Income Nations:
- Investment: Enhance climate for both domestic and foreign investment.
- Lower MIC Transition (2I Strategy):
- Investment Infusion: Import global ideas/technology and spread across economy.
Upper MIC Transition (3I Strategy):
- Innovation: Develop local technology and innovations to sustain growth.
- Key Steps for MIC Growth:
- Human Capital: Focus on skilled workforce and innovation policies (e.g., AIM, IPR).
Market Reforms:
- Brain gain, strategic support, global market access, and competition laws.
Digital Tech:
- Boost financial inclusion and mobility through digital tools.
Global Headwinds:
- Integrate in low-carbon supply chains; push for less trade protectionism.
Conclusion: Tailored policies are essential for MICs like India to escape the middle-income trap.