LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

Economy at $5 tn? PM Modi sets mission impossible target?

Though the Indian economy clocked an 8.2% GDP growth in the first quarter of this fiscal, many economists have forecast a slowdown in the second of half of this year in the wake of the global slowdown, trade war, strained fiscal and current account deficits, falling rupee and inflationary pressure.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Economy at $5 tn? PM Modi sets mission impossible target?
Prime Minister Narendra Modi, who had said in Davos that India would become a $5 trillion economy by 2025, has now revised it. PTI
Written By: K R Sudhaman
Updated: Fri, Sep 28, 2018
11:55 am
New Delhi, ZeeBiz WebDesk
RELATED NEWS
 PM Modi to address the nation at 6 pm today evening PM Modi to address the nation at 6 pm today evening
This Bihar town to display mementos received by PM Narendra Modi This Bihar town to display mementos received by PM Narendra Modi
G20 Summit Osaka: PM Narendra Modi to attend, this is on agenda G20 Summit Osaka: PM Narendra Modi to attend, this is on agenda
IIT Kharagpur to host grand finale of Smart India Hackathon 2019 on March 2-3 IIT Kharagpur to host grand finale of Smart India Hackathon 2019 on March 2-3
Existing Income Tax Act to be replaced? What we know so far Existing Income Tax Act to be replaced? What we know so far

Prime Minister Narendra Modi, who had said in Davos that India would become a $5 trillion economy by 2025, has now revised it. Last week, he said India would achieve the feat by 2022. Currently, the size of the Indian economy is $2.6 billion. However, economists say the target is over-ambitious, if not impossible, given the global and domestic economic situation.

Though the Indian economy clocked an 8.2% GDP growth in the first quarter of this fiscal, many economists have forecast a slowdown in the second of half of this year in the wake of the global slowdown, trade war, strained fiscal and current account deficits, falling rupee and inflationary pressure.

World Bank has forecast India’s growth at 7.3% in 2018-19 and Reserve Bank of India 7.4%. The rapidly worsening global economic situation has forced a few others to forecast a growth rate of below 7% for India this financial year.

A Confederation of Indian Industry (CII) survey of about 200 companies this week said a majority of 64% of respondents felt that GDP growth will be in the range of 6.5% to 7.5% in 2018-19. In CII’s business confidence index report, about 28% of the respondent companies saw the GDP growth for July-September 2018 at 6.5-7%.

Renowned international economists Nouriel Roubini and Brunello Rosa in a recent article have painted a gloomy picture for the global economy for the next couple of years. They say by 2020 the conditions will be ripe for a global financial crisis because the US is running large fiscal deficits and China is pursuing loose fiscal and credit policies.

They warned that unlike in 2008 crisis, governments lack the policy tools to manage it and the situation would be worse than 2008.

If India were to become $5 trillion economy even by 2025, it will have to grow over 10% and to be precise 10.6%, which, according to NIPFP economist N R Bhanumurthy, is certainly over-ambitious if not impossible.

A simple calculation shows that if India were to grow at 7.4% that is projected by RBI this year and that is sustained over the next 7-8 years, then India will reach $5 trillion by 2027 at current prices. Even this 7.4% growth look difficult this year, and with global recession looming large India might not be able to sustain high GDP growth at least for the next few years.

If India were to become $5 trillion economy by 2022, then India will have to grow by at least 14.2% annually next four-five years, which perhaps no country has achieved so far. Even China has not clocked beyond 12% over a period of a few years.

Given the external and domestic condition even 10% growth is difficult for India in the foreseeable future, Bhanumurthy told DNA Money, adding $5 trillion certainly looks difficult to achieve even by 2025.

India is now that one of the large open economies and hence the contribution of external sector to growth is around 25%. Given any disturbance in the external situation as it is now, will knock out 25% of growth and that is very substantial. I think we need to be a little more careful in projecting such GDP numbers, he said, adding achieving the goal with just domestic spurt is almost impossible.

Also, with the US economy not growing beyond 4% in best of the times, and China now in the process of cooling down its economy by gradually slowing down its growth in the coming years, the chances of India largely depending on foreign trade to boost growth further will be increasingly difficult.

To achieve double-digit growth, which is essential to become $5 trillion economy by 2025, India would have to pursue export led growth like China, where 40-45% of GDP was because of exports. India’s former chief statistician Pronab Sen said India is far from it, at least in the foreseeable future.

Crisil chief economist D K Joshi said Crisil forecast “do not support double-digit growth. On a continuous basis, India can grow at 7.5-8% because of structural reforms carried out by the Modi government”.

Watch this Zee Business video

Another former chief statistician, TCA Anant, however, said double-digit growth is in the realm of a possibility and if China has done it, India too could do it.

 

Source: DNA Money

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
PM Narendra ModiEconomic growthGDP growth in IndiaGDP growthEconomy
RELATED NEWS
 PM Modi to address the nation at 6 pm today evening PM Modi to address the nation at 6 pm today evening
This Bihar town to display mementos received by PM Narendra Modi This Bihar town to display mementos received by PM Narendra Modi
G20 Summit Osaka: PM Narendra Modi to attend, this is on agenda G20 Summit Osaka: PM Narendra Modi to attend, this is on agenda
IIT Kharagpur to host grand finale of Smart India Hackathon 2019 on March 2-3 IIT Kharagpur to host grand finale of Smart India Hackathon 2019 on March 2-3
Existing Income Tax Act to be replaced? What we know so far Existing Income Tax Act to be replaced? What we know so far

LATEST NEWS

India's Marvel! World's highest rail bridge arch on Chenab in Jammu and Kashmir nears completion, says Piyush Goyal

RBI Governor Shaktikanta Das speaks on petrol, diesel prices, economy, MSME scope and much more at BCCI event

IRCTC Share price: Dolat Capital initiates coverage on with target of Rs 2650

Stocks to buy with Anil Singhvi: Market Guru recommends this chemical stock for good returns, gives 3 targets

Nureca listing today: Share price shoots up, lists at Rs 615, gives stellar returns to retail investors

Bengali film actress Payel Sarkar joins BJP

Modi government PM-KISAN scheme: Ensuring life of dignity, prosperity for farmers with intent to double their income

NTA releases CSIR NET 2020 result, check it on on csirnet.nta.nic.in| Download it in 3 easy steps

Your PAN card may soon become inoperative; you may be fined too if you miss this deadline — Check last date

Redmi 9 Power new variant launched in India; Check all details here!

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved