'Nearly 6% growth in productivity needed for India, China to catch up with developed nations'

India, China and 28 other emerging market economies will catch up faster with the advanced economies in terms of productivity growth and living standards if they continue to witness around 6% level of productivity gains each year, McKinsey Global Institute said in a report released on Wednesday.
It said India and China were responsible for nearly half the productivity gains witnessed between 1997 and 2022, which helped them lift nearly a billion people out of poverty.

India’s productivity growth rate of 5.6% per annum was outmatched only by China’s, as the latter’s GDP per worker increased to $21,800 per worker in 2022 from $6,200 in 1997, the report said.

“India would need to keep up investments to urbanise effectively, build infrastructure, support service productivity and build higher-value manufacturing. For this, the right enablers need to be in place, from institutions that incentivise investment and innovation to education that allows workers to make the most of those investments,” said Rajat Dhawan, managing partner, India, McKinsey & Company.