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Achieving The $5 Trillion Dream

A lot has been said about India becoming the beacon of global economic growth and the 21st century being that of India. The claim has also been vindicated by the fast growth rate at which Indian economy was moving, until the Q1 GDP data of 2019-20 arrived. 

GDP growth rate of 5% in the first quarter of the 2019-20 financial year was lowest in recent years. Leading rating agency Crisil has revised its estimates for current fiscal year growth rates at around 6.3% from earlier forecast of 6.9%.  Moody's too have cut their GDP forecast to 6.2% in August. Such outlook could only mean that Indian Economy is drifting towards a slowdown.

The main reason for slow growth rate is attributed by most experts to slow demand and weak job creation and tight liquidity coupled with slow credit growth rate. Weakening Rupee against US Dollar has also added to the pain.

Achieving $5 Trillion GDP figures by 2025, Indian Economy will need to grow with an average growth rate of 9.25%. At this rate per capita income will double from current $2009.00 to approx. $ 4050.00 only by 2027.  

If the current state of affairs continue and the economy grows at a 7.10% what was achieved in 2018, the $5 trillion target will be further pushed ahead to 2027. At this rate per capita income will only be doubled by 2030.

However, as more and more reforms at macro level will be announced and implemented along with improvement in the global business scenario, the target GDP of $5 trillion is achievable by year 2026, with an average growth rate of 8.00%. Per capita income at this rate can be doubled by the end of  2028.


Amidst the current crises, the dream of $5 Trillion economy stands firm for the government. Reaching this magical number will be a mammoth task. The government will need step in to deploy additional reforms to boost the economic growth rate from here. India still remains to be an attractive destination for investments. 

A review on taxation rates will surely help to build confidence in businesses. Indian manufacturing sector is in need of much required attention as the recent growth rate of manufacturing sector has been a very low 0.6%. Certain confidence building measures coupled with higher credit growth rate and further rate cuts will give a much needed push to the economy, saving it from entering a major slowdown. To take the economy to $5 trillion GDP in their current term ending 2024 the government will need to pull a rabbit out of the hat.

#GDP #India #Economy
Location: India

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