Modi 3.0 and Nilekani’s Vision: Challenges in Unlocking India’s $8 Trillion Economy

As India aspires to become an $8 trillion economy by 2035, Infosys co-founder Nandan Nilekani has outlined four critical “unlocks”—technology, capital, entrepreneurship, and formalization—that could propel the nation toward this ambitious goal. However, experts suggest that the Modi 3.0 government may face significant hurdles in implementing these transformative measures.

The Four Unlocks:

1. Technology: Nilekani emphasizes leveraging artificial intelligence (AI) and digital public infrastructure to drive productivity and innovation. While India has made strides with initiatives like Aadhaar and UPI, integrating AI at scale remains a challenge.
2. Capital: Unlocking capital through tokenization of land assets and enhancing financial inclusion via the Account Aggregator framework is crucial. However, the gap between demand and supply of capital for small businesses—estimated at $530 billion—poses a significant barrier.
3. Entrepreneurship: Nilekani envisions the creation of one million startups and ten million modern MSMEs. Simplifying regulations and fostering a vibrant entrepreneurial ecosystem are essential, but bureaucratic red tape and inconsistent market access remain obstacles.
4. Formalization: Increasing participation in the formal economy through digital public infrastructure for worker credentials and benefits is vital. Currently, only 15% of Indians and 8 million businesses are part of the formal economy, highlighting the need for structural reforms.

Challenges for Modi 3.0:

Despite the government’s focus on economic growth, critics argue that Modi 3.0 has shown a reduced appetite for bold reforms, particularly after setbacks with the land acquisition bill and farm laws in previous terms. Addressing income disparity, low labor productivity, and regional economic imbalances are critical to achieving the $8 trillion target.

While Nilekani’s roadmap offers a clear vision, its implementation requires political will, cross-sector collaboration, and a commitment to inclusive growth. The journey to an $8 trillion economy is fraught with challenges, but with the right strategies, India can unlock its immense potential.