CEA: India on track to becoming $5-tn economy by FY26
NEW DELHI: Chief Economic Adviser V Anantha Nageswaran on Tuesday expressed hope that India would become a $5 trillion economy by FY26 on the back of 8-9% sustained growth.
Gross domestic product (GDP) in dollar terms has already crossed $3 trillion, he said during the finance minister’s post-Budget interaction with the press.
“If we extrapolate it, we should be a $5 trillion economy in terms of nominal GDP in the FY2025-26 or FY2026-27,” Nageswaran said.
Prime Minister Narendra Modi in 2019 envisioned making India a $5-trillion economy and a global economic powerhouse by 2024-25. With this, India would become the third largest economy in the world. According to Economic Survey 2021-22, India is set to become the world’s fastest-growing major economy with GDP growth of 9.2% in the current financial year and projected to remain in the range of 8-8.5% in 2022-23.
Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. According to the annual survey report tabled in Parliament by finance minister Nirmala Sitharaman, India’s GDP growth is estimated to slow to 7.1% in 2023-24. “Even going by the most conservative estimates, will be the world’s fastest-growing economy,” Sanjeev Sanyal, Principal Economic Advisor in the Finance Ministry and the lead author of the report.
However, the report also noted the challenges arising out of the new Covid-19 variants and uncertainties in the global economy and inflation.
Inflation has reappeared as a global issue in both advanced and emerging economies and India needs to be wary of “imported inflation”.