India will become advanced USD 5 trillion economy by 2047: MoS Finance to Lok Sabha

Minister of State for Finance Pankaj Chaudhary said Monday that India will become a USD 5 trillion economy early in the ‘Amrit Kaal’ on the path to achieving the goal of becoming an advanced economy by 2047.

Chaudhary in a written reply in the Lok Sabha said that the USD 5 trillion milestone will be crossed with the help of a strong rupee which will result from macroeconomic stability. “The government has set the goal of becoming an advanced economy by 2047. In the process, it will become a USD 5 trillion economy early in the Amrit Kaal,” he said.

Finance Minister Nirmala Sitharaman in November this year said India is expected to overtake Japan and Germany to emerge as the third largest economy in the world by 2027. The International Monetary Fund has also projected India to become a USD 5 trillion economy with the third largest GDP in 2027-28.

India has significantly improved its position as a well-governed and innovative country with a conducive environment for business, as reflected in several global indices.

At the end of 2022-23, the Indian GDP stood at USD 3.7 trillion. In 1980-81, size of the Indian economy was USD 189 billion, which increased to USD 326 billion after a decade. In 2000-01, the size of the GDP rose to USD 476 billion.

In 2010-11, India’s GDP jumped to USD 1.71 trillion, and further increased to USD 2.67 trillion in 2020-21. Chaudhary said the exchange rate is not an overlooked factor as it ranks India’s GDP size in the world. “India is a market economy, and the government monitors economic progress through market-determined GDP and exchange rate,” Chaudhary said.

He further said both domestic and international markets are the mechanisms that determine India’s GDP, exchange rate and contribution of various sectors to GDP.

The contribution of agriculture, industry and services to nominal GDP in 2022-23 stood at 18.4 per cent, 28.3 per cent, and 53.3 per cent, respectively. Chaudhary said the government also contributes to economic progress through policy interventions, including the measures announced in annual budgets.

Major initiatives taken by the government in the last 9 years for directly increasing the GDP include implementation of the Insolvency and Bankruptcy (IBC) Code, recapitalisation of public sector banks, rollout of Goods and Services Tax (GST), reduction in corporate tax, boost in effective capital expenditure, introduction of Production Linked Incentive (PLI) scheme in 14 sectors, continuous liberalisation of the FDI regime, and building of digital infrastructure.

With inputs from PTI.