Technology, capital, entrepreneurship, and formalisation are the four key areas that Nandan Nilekani wants the Government of India to focus on to unlock India’s economic growth and reach the target of an $8 trillion economy by 2035. Speaking at the Arkam Ventures Annual Meet 2025, he outlined eight specific recommendations where the use of technology, especially artificial intelligence, can help accelerate growth and remove barriers like income disparity, low productivity, and inconsistent market access.

Capital and Technology Unlock

Pointing to the success of digital identity in lowering costs and entry barriers — with the cost of e-KYC dropping from $23 to $0.5 per verification and UPI now seeing nearly 16 billion monthly transactions — Nilekani said that AI could play a major role in turbocharging growth. According to him, India should look at digital public infrastructure that is low-cost and AI-driven, built to a population scale. AI technology based on open-source models, accessible across Indian languages, and continuously reducing inference and reasoning costs could help bridge inequalities within the country.

The use of this technology, especially in areas such as agriculture, education, and MSMEs, could drive productivity, innovation, and global competitiveness across industries.

“Tokenisation of land assets can unlock $3.3 trillion in capital,” Nilekani said, pointing to data showing that Indians hold nearly 50% of their assets in real estate, with bank deposits being the next largest holding at 15%. While India’s land capitalisation rate is at 5% compared to 40% in the USA, the creation of a unified ledger and a credible verification process could increase the rate of monetisable land assets.

The other aspect of unlocking capital to enhance credit availability could be achieved by improving the Account Aggregator framework for more efficient and broader financial inclusion.

Formalisation and Entrepreneurship Unlock

With an estimated 47% of Gen Z — about 340 million people — expected to form the workforce of India by 2035, Nilekani said that formalisation of India’s labour force would be critical in reaching the $8 trillion goal. While currently only 15% of Indians and 8 million businesses file GST returns as part of the formal economy, just 1 million businesses contribute to provident fund and employee insurance schemes.

However, India could increase its formal sector participation by creating a digital public infrastructure for worker credentials and benefits with portability. “India needs to dramatically simplify our laws,” Nilekani said, adding that simpler laws could improve the ease of doing business and allow more companies to enter the formal economy.

Nilekani also highlighted the potential of India’s entrepreneurship sector. Pointing to how employees of large startups such as Zomato and PhonePe have gone on to create new ventures — and entrepreneurs like Kunal Shah and Kunal Bahl have turned into angel investors — he said this trend has encouraged new founders.

“By 2035, India will be the most preferred IPO market globally,” Nilekani said. With the right ecosystem and fewer bottlenecks, India could have 1 million startups by 2035, with accelerated funding outside India’s metros. Through public digital infrastructure, marketplace creation, easy capital access, enhanced productivity with AI, and a skilled workforce, India could also pave the way for nearly 10 million MSME businesses to become modern entrepreneurs.

Rahul Chandra, Managing Director of Arkam Ventures, said that while the four areas of unlock and their outcomes present a significant opportunity for Indian entrepreneurs, “At Arkam, we believe the opportunity lies in opening up the market to enable startups and MSMEs to grow and formalise. Founders who can bridge the gap between technology, regulation, and financial access will shape the next decade of innovation.”