NEW DELHI : India is poised to become the world’s third-largest economy with a GDP of $5 trillion within the next three years, and it aspires to reach $7 trillion by 2030, according to a report released by the finance ministry just ahead of the interim budget announcement.
Chief Economic Adviser V Anantha Nageswaran emphasised the significant economic progress during the 10 years of the Narendra Modi government, describing it as a journey “from fragility to stability and strength.” The estimates presented in the report are based on reasonable assumptions regarding inflation differentials and exchange rates.
The document, titled “Indian Economy — A Review,” offers insights into the current state of the economy and its future potential. While it doesn’t replace the traditional Economic Survey released before the Budget, it serves as a commentary on economic conditions. The Economic Survey for 2023-24 will be released after the general elections, preceding the full budget presentation in July.
“The government has, however, set a higher goal of becoming a ‘developed country’ by 2047. With the journey of reforms continuing, this goal is achievable,” the report stated, while celebrating India crossing the $5 trillion and $7 trillion GDP thresholds.
The report underscores the government’s commitment to reforms, economic management, and expanding the welfare net, asserting that these efforts will surpass international expectations for India’s economic performance. It predicts sustained 7 per cent GDP growth, aligning with the goal of transforming into a developed economy by the time India celebrates its hundred years of independence in 2047.
CEO and co-founder of Primus Partners, Nilaya Varma, identified four key drivers for India’s growth to a $7 trillion economy. These include increased greenfield investments, the multiplier effect of capital expenditure on physical infrastructure, ongoing de-risking of supply chains, and a robust digital services ecosystem.
Acknowledging the reforms implemented over the past 10 years, the report emphasises India’s resilience and progress despite global challenges. India has climbed from the 10th largest global economy in 2013-14 to the 5th largest with a GDP of $3.7 trillion (estimated for FY24). The report anticipates a real GDP growth of approximately 7 per cent in FY25, attributing this strength to robust domestic demand and government policies.
However, challenges remain, with experts suggesting the need for sustained double-digit annual growth, favourable external factors, enhanced employment generation, and upskilling of the workforce.
