‘India can become fivetrillion dollar economy’

Prime Minister Narendra Modi has said the goal of making India a five-trillion-dollar economy is challenging but can be achieved and has asked states to recognise their core competence and work towards raising GDP targets.

In his opening remarks at the fifth meeting of the Governing Council of NITI Aayog, the government’s economic think tank, Modi said empowerment and ease of living must be provided to every Indian.

“The goal to make India a five-trilliondollar economy by 2024 is challenging, but can surely be achieved. The states should recognise their core competence and work towards raising GDP targets right from the district level,” he said.

The export sector was an important element in the progress of developing countries, he said, and both the Centre and the states should work towards growth in exports, to raise per capita incomes.

“There is immense untapped export potential in several states, including the North-eastern states. A thrust on export

promotion at the state level will provide a boost to both income and employment,” he said.

Meanwhile, Fitch Ratings saw India’s growth for FY 2019-20 at 6.6% and 7.1% in 2021-22. Fitch was optimistic on India’s growth, saying that the monetary and regulatory easing from the Reserve Bank of India, along with a recovery in portfolio inflows, should support a recovery in credit to the private sector and reverse the drag from the negative credit impulse.

“Food inflation has already started to pick back up (at 2 per cent year on year in May) and the government has increased cash transfers to farmers in its latest budget, all of which should support rural households’ income and consumption,” a Fitch report said.

India’s GDP growth declined for the fourth consecutive quarter in 1Q19, with the economy expanding by 5.8 per cent yoy, down from a high of 8.1 per cent in 1Q18. This is the lowest growth outturn in five years.

The slowdown over the past year has been driven by steadily cooling activity in the manufacturing sector and, to a lesser extent, in agriculture.

“Weaker momentum has been mainly domestically driven, though export growth has also faltered more recently. Muted food price inflation has weighed on farmers’ income and production,” Fitch added.