IANS | 29 Jan, 2024
In the next three years, India is expected to become the
third-largest economy in the world, with a GDP of $5 trillion, the
Finance Ministry said in a review of the Indian economy just days before
the Interim Budget (Feb 1).
This is not the Economic Survey of
India prepared by the Department of Economic Affairs. That will come
before the full Budget after the general elections, the ministry said.
Ten
years ago, India was the 10th largest economy in the world, with a GDP
of $1.9 trillion at current market prices. Today, it is the fifth
largest with a GDP of $3.7 trillion (est. FY24), despite the pandemic
and despite inheriting an economy with macro imbalances and a broken
financial sector, the review said.
This 10-year journey is marked
by several reforms, both substantive and incremental, which have
significantly contributed to the country’s economic progress. These
reforms have also delivered an economic resilience that the country will
need to deal with unanticipated global shocks in the future.
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 reforms will be more purposeful and fruitful with
the full participation of the state governments. The participation of
the states will be fuller when reforms encompass changes in governance
at the district, block, and village levels, making them citizen-friendly
and small business-friendly and in areas such as health, education,
land and labour in which states have a big role to play, it added.
The strength of the domestic demand has driven the economy to a 7 per cent plus growth rate in the last three years.
The
robustness seen in domestic demand, namely private consumption and
investment, traces its origin to the reforms and measures implemented by
the government over the last ten years.
The supply side has also
been strengthened with investment in infrastructure – physical and
digital – and measures that aim to boost manufacturing. These have
combined to provide an impetus to economic activity in the country.
Accordingly, in FY25, real GDP growth will likely be closer to 7 per cent, the Finance Ministry said.