NITI Aayog Proposes Three-Dimensional Framework for Haryana to Achieve Developed Status by 2039
SDG 8: Decent Work and Economic Growth | SDG 10: Reduced Inequalities
NITI Aayog | Government of Haryana
The NITI Aayog Working Paper titeld ‘Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework’ presents a comprehensive policy framework for Haryana to achieve the status of a developed and high-income economy well before India’s national target of 2047. The framework establishes three required benchmarks for this transition: (1) Per Capita Income (PCI) exceeding the projected World Bank High-Income Country (HIC) threshold; (2) an SDG score of 90 or higher; and (3) a Human Development Index (HDI) value above 0.85.
Key projections and structural challenges identified include:
Timeline Projections: Under the more ambitious Achievable Scenario 2 (based on fixed factor-share elasticities), Haryana is projected to achieve HIC status by 2038-39 and a USD 1.0 trillion economy by 2040-41. This timeline is significantly ahead of the business-as-usual scenario, which projects HIC status by 2042-43.
Structural and Productivity Gaps: Despite averaging 6.84% annual growth since 1980, Haryana’s growth model is marked by inefficiencies. The economy shows classic features of a dual-sector structure.
Low Productivity: Agriculture, manufacturing, and trade sectors show poor or negative growth in Total Factor Productivity (TFP). Manufacturing specifically shows capital-heavy, almost jobless growth, with capital elasticity at 0.95 and labour elasticity at only 0.05.
Labour Misallocation: The Marginal Product of Labour (MPL) was found to be negative in sectors like agriculture (-7.51 lakh in 2019-20), reflecting persistent disguised unemployment and labour misallocation.
Social Development: While the SDG score improved from 55 (2018) to 72 (2023-24), Haryana ranks 17th nationally. Key weaknesses remain in gender equality (score of 45), decent work (score of 50), and climate action (score of 51). The state is projected to meet the HDI target of 0.85 by 2039.
What is Total Factor Productivity (TFP)? Total Factor Productivity (TFP) is a metric used in growth accounting (such as the Solow Growth Model) that measures the efficiency with which capital and labour are combined to produce output; it is the portion of output growth that is not explained by increases in measurable inputs (labour and capital) but rather by technological progress, innovation, and institutional efficiency.
Policy Relevance
To avoid the “middle-income trap” and realize the early timeline, policy must pivot from a purely investment-driven model to one centered on Total Factor Productivity (TFP), innovation, and inclusivity. This requires shifting the policy focus toward high-value agriculture, strengthening MSMEs to scale up and generate labour-intensive employment, and establishing regional innovation hubs outside of Gurugram. Furthermore, making women’s empowerment a central pillar is essential to address major SDG deficits.
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